Interest and business engagement in the concept and practice of shared value has been gaining ground since it was boosted in 2011 by Michael E. Porter and Mark Kramer of the Harvard Business School.
For various reasons, the corporate drive for value and values which followed the credit crunch, and agreement of the UN’s Sustainable Development Goals have been significant drivers in the concept taking hold in company boardrooms. These drivers, boosted by the SDG’s emphasis on opportunities for enhancing shareholder value via private sector engagement in directly addressing social challenges, has added further fuel and impetus to the shared value narrative. Trillions of dollars’ worth of financial opportunity are estimated to be in play as a result of this agenda.
The May 2017 event was attended by senior sustainability and marketing executives from a range of companies including Hitachi Europe, Prudential, Warner Bros. Allianz UK, Anglo American, Shell, Tate & Lyle, Virgin, and others. Participants in the discussion were on different places in their shared value journey: from the curious considering where and how to begin, others who were already on their way and wanted to check-in, and a few who could be considered pathfinders and were willing to share their experiences and learnings.
The key questions considered by participants were:
• What have leading businesses learnt from the shared value journey so far? – Is shared value delivering value for the various actors involved in the ‘value networks’ necessitated by the concept?
• Can shared value be truly realized at scale?
• Looking to the future, what levers and mechanisms are required to truly embed and sustain shared value at scale across whole businesses and sectors? What models are most likely to help achieve transformative change?
The session was ignited with a reflective introduction by Jackie Duff* from the Coca Cola company. What followed was an informative and insightful discussion moderated by Manny Amadi CEO C&E Advisory. Below are the key takeaways arising from the Breakfast.
Learnings from Shared Value Journey so far
1. Capitalizing on corporate assets to support socio economic development
• Examples exist of how corporates have used their assets, including their distribution channels, to support the socio-economic development of the communities they operate in.
• Coca Cola Company has used its logistics and marketing assets to support NGOs and Government agencies to improve their distribution and therefore access to life saving drugs.
• The Coca Cola Company has also worked with local communities, using the end-of-life stage of beverage cans as an opportunity to create social economic opportunities.
• Shared Value initiatives can also be effective when applied to supply chains - with corporates working to help build the capacity of the small farmers supporting their business.
2. Pilot and scale approach
• Shared Value programs are ideally piloted and then scaled to new communities or countries. However, in some cases, a business may require external consultants to point to successful programs before replicating an existing model.
3. Digital has become an integral part of Shared Value deployment
• Mobile and other digital tools have enabled Shared Value initiatives to reach out to stakeholder groups efficiently. This has opened new possibilities and corporates, NGOs and other actors are now building their approach with digital as a key component.
4. Shared Valued drivers do vary
• Some businesses want to reduce risks (e.g. by ensuring the security of supply of a commodity or fending off competition) whilst others will want to harness new opportunities (e.g. developing a better connection with local communities for a global business or innovating new products or services).
• Some companies are simply driven by their values. Demonstrating the commercial value of a Shared Value approach can be harder in some sectors (E.g. Financial) than others (e.g. FMCG).
5. Rippling effect of Shared Value programs
• Existing strategies such as 5 by 20 at the Coca Cola Company seem to have paved the way for further Shared Value initiatives undertaken by other organisations and collaborations.
6. A legacy of community investment can be a hurdle to Shared Value
• When a company has a great track record of community investment, adopting a Shared Value mindset may require patience as the Leadership may be used to programs which benefit the community without any links to the business. Paradoxically some NGOs seem to have totally shifted developing their offering around the shared Value concept and no longer adopting a community investment approach.
The session concluded with reflections on likely future developments and questions:
• ‘Will the agenda move to a model where companies offer a share of the value chain to smallholders?’
• ‘Could companies change how they identify and grow talent though a Shared Value lens?’
• ‘Can the leading shared value practitioners shift from sustainability which delivers commercial benefits to a commercial approach which delivers sustainability benefits?’
About the series:
C&E’s Breakfast Dialogue series are free, by invitation, informal discussions held over a light breakfast and involving a dozen or so senior participants from corporate, NGO and public sector backgrounds. They are highly interactive, informed, co-learning discussions in which participants share their perspectives, experiences and insights - under Chatham House rules. Guests for this session will comprise of senior representatives from leading UK and international companies covering a range of business sectors.
* As global Strategic Project Director, Women’s Economic Empowerment at the Coca-Cola Company Jackie Duff is responsible for driving the success of the ‘5by20’ initiative to enable the economic empowerment of 5 million women entrepreneurs by 2020, across the company’s global value chain. Since joining the Coca-Cola Company in 2007 in Global Marketing in the Sustainability function, Jackie developed international licensing and successfully grew the European business from scratch and led the Coca-Cola brand extension programme and Environmental initiatives for Europe, Eurasia and Asia Pacific. Prior to joining Coca-Cola, Jackie held international marketing roles at Unilever, Associated British Foods (ABF) and Dr Oetker Group, bringing significant worldwide experience to her role and leadership in driving sustainable innovative business solutions.