In 2012, The Rockefeller Foundation’s Impact Investing initiative provided a grant to support the launch of the Shared Value Initiative (SVI). Founded by FSG, SVI is a global community of practice working towards the development and adoption of shared value strategies among some of the world’s largest corporations and business entities and governmental organizations. Shared value is often defined as a management principle that seeks opportunities for business in solving social problems.
As a member of SVI’s Leadership Council, I’ve had the pleasure to be involved with the Shared Value Summit for two years. In those two years, SVI has managed to bring together stakeholders that represent the biggest movers and shakers in private industry and the public sector, fostering real dialogue about opportunities to change the way we think about—and do—business.
I found this year’s Summit to be particularly inspiring and enlightening. Here are five valuable lessons learned at this year’s Summit:
1. For shared value to work, maintaining your organization’s competitive strategy is essential.
For shared value to work, we have to remember that social impact, and the consequences of impact focused behavior, is actually good for business. It increases individual and company level productivity, employee wellbeing, future savings, and much more. There’s no need for a tradeoff between impact and an organization’s competitive strategy. Absent this strong financial and operational mandate, shared value starts to blend into CSR, which has separate and unrelated goals.
2. Without tangible models for measurement, shared value won’t get to widespread adoption.
The lamentations around measurement are not so different from the difficulties faced by early impact investors. To make the case for widespread adoption, we need to show (and prove) the results. Measurement is critical in demonstrating proof of concept, encouraging adoption at scale, and most importantly, providing real insight into what has worked—and what hasn’t.
3. Shared value is about building a more inclusive economy.
This was one of the most interesting themes of the Summit. During a panel that featured representatives from Edelman Holdings, Visa, IBM and IBM International Foundation, and Unilever, it was suggested that “eradicating poverty is about shared prosperity“. This really hit home with me. By providing services to the unserved and bringing them into the market, companies see movement towards poverty alleviation and, simultaneously, a growth in their client bases. The financial services industry provides a rich example: Major credit card companies are working to retain new clients by providing critical banking services to those without. To do this, they are investing in desperately needed infrastructure, building the capacity of local service providers, and exploring new technologies focused on convenience, such as mobile money.
4. There are different ways to build shared value.
Before the Summit, SVI brought together corporate organizations already building shared value, as well as others just starting to explore the concept, to discuss their experiences at building shared value. At my own roundtable, I heard three distinct but fascinating examples, each providing stark contrasts with the others. The key takeaway was that there is no one model for integrating shared value:
- At Pearson, shared value came from the top. The leadership team made a public commitment to evaluate the social impact of its products and services. Pearson charged its team with developing methods for implementing this goal company-wide, ensuring that Pearson’s products and services demonstrate tangible social impact in the communities within which they work.
- At Novartis, shared value started at an initiative level and was then scaled up and across the organization. Novartis’s commitment to developing products that address neglected disease was a natural area to introduce the value of co-creation. Teams work daily to build strong partnerships between a variety of stakeholders and innovators to integrate community benefits into its core strategic priorities.
- At Itau Brazil, the team piloted a financial literacy program internally, using bank employees as the pilot study, and yielding positive results in decreasing indebtedness and increasing investment capacity at the household level. The result was overall improvement in staff productivity and well-being, offering promise for the potential for introducing this product to existing and potential clients.
5. Choosing the right partnership is essential.
Much can be said about building shared value internally, but equally important is the establishment of shared value externally. Uptake will require scale, and achieving scale is challenging without the combined efforts of many different actors working together. In the final panel of the day, Steve Davies, David Browning, Beth Keck, and Rockefeller Foundation Vice President Zia Khan talked about the importance of cross-sector collaboration. Shared value is not a singular movement—it requires an ecosystem of actors and partners that simultaneously change the norms of value creation in larger corporations, looking at the integrated role of social impact and conventional business practices. When selecting partners, the panelists suggested looking at alignment, flexibility, and diversity among potential partners. Doing so will enable those engaged in shared value to make greater strides in achieving impact, while at the same time revolutionizing the ways in which we work together.