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Why Your Company Should Get Involved with the Shared Value Initiative

| Thursday August 15th, 2013 | 4 Comments

Shared-Value-Initiative-logo“Creating shared value” sounds deceptively simple. Show me a company or organization that doesn’t want to add value!

Sustainability enthusiasts may already be familiar with the concept of “shared value” –  the idea that a company’s financial health and the health of the communities around it are mutually dependent. By growing a successful business, the community should become more successful as well.  While shared value has a lot in common with other approaches to corporate social responsibility, it has a few key differences as well. Corporate philanthropy does not take center stage in the shared value philosophy, nor does stakeholder engagement (which is at the core of popular sustainability reporting guidelines from the Global Reporting Initiative.) Rather, the focus in the Shared Value framework is on the creation of meaningful economic and social value at the same time.

Of course, the devil is in the details – in this case, implementation. And that’s the impetus behind the creation of the Shared Value Initiative.

The Shared Value Initiative was launched in 2012 by FSG, a non-profit strategy and research consulting firm (and the brain child of Michael E. Porter and Mark Kramer). The purpose of the initiative is to foster “a global community of practice committed to driving adoption and implementation of share value strategies among leading companies, civil society, and government organizations.” To put it more simply, it’s a community to help shared value advocates with implementation of shared value strategies.

The impetus for the Shared Value Initiative came from a desire to speed adoption of the principals of shared value. FSG had been focused on research, but the needle was not moving quickly enough – and community engagement was a great way to ramp up adoption. According to Justin Bakule the Shared Value Initiative’s Executive Director:

“To accelerate progress on this emerging idea, we knew that it required openly engaging the various ecosystems of stakeholders around the world working on shared value strategies and implementation. And, when we asked leading companies, nonprofits, governments and even other consulting firms working on shared value, we found that they agreed with us. “

The Shared Value Initiative is designed to catalyze these individual conversations and give them a place to thrive.

“The commitment we’ve made through the Shared Value Initiative is to help steward the concept, provide a platform to deepen the understanding and documentation of the ideas and contribute what we’re learning through our consulting work about shared value to advance the concept for all. The organizations engaging with us in the Initiative have made the same commitment – to advance shared value as a public good for all to benefit.”

Even though the initiative is quite new, FSG founders Porter and Kramer have been wrestling with the concept of shared value for quite some time. The thought leaders first began publicly discussing what became of the concept of shared value in a 1999 Harvard Business Review article which questioned the very assumption that a tradeoff exists between economic efficiency and social progress.

Along the way, one of the keys to challenging this assumption became the concept of creating shared value, which Kramer and Porter outlined in a landmark article published in the Harvard Business Review, Creating Shared Value: How to reinvent capitalism—and unleash a wave of innovation and growth. The article clarified the concept and issued a call to action for companies to find new avenues for value creation.

The article has become required reading for progressive MBAs and anyone interested in the practice of sustainability in business. The concept, and the article, struck a nerve, partly because Kramer and Porter laid out a case for the problems with the status quo that had not yet been described so succinctly:

“A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation… They continue to view value creation narrowly, optimizing short term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term successes. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell?”

Porter and Kramer quickly followed that challenge with an opportunity, offering readers three key ways companies can create shared value opportunities:

  • Reconceive products and markets
  • Redefine productivity in the value chain
  • Enable local cluster development

The Shared Value Initiative was launched publicly just a year later to help companies and other organizations to operationalize these ideas. Bakule emphasized that the Shared Value Initiative represents a new direction for FSG. “It’s a new way of engaging. We hope to showcase how social change happens beyond our traditional consulting business model.”

What does success look like?

The Shared Value Initiative has some clear ways to benchmark success, like increasing the number of organizations that adopt shared value thinking, and increasing the effectiveness of shared value strategies.
Bakule elaborates, “Metrics like the size of the community, the quality of information being exchanged by the community, and the number of initiatives being implemented are certainly indicators of our progress. From a shared value project standpoint, we look towards concrete measures of what business and social value is being created through the activities.”

Who’s involved 

A whole host of companies have joined up already including: The Coca Cola Company, Deloitte, Hewlett Packard, pharmaceutical company Lilly, Medtronic, Novartis,  RioTinto and Western Union. The Initiative also created a global affiliate network of certified shared value consultants who will be contributing to this series. But there are plenty of individuals as well, and you could be one of them. The Shared Value Initiative includes a growing community of practitioners looking to further the cause and push new strategies at organizations all around the world.

Want to learn more? 

If you like this concept of shared value and want to learn more, think about joining up. Community members share best practices, get access to case studies, reports and other resources, and a whole bunch of other benefits. If this sounds interesting to you, sign up here.  It’s free!

Ed note: This piece was written as a part of a sponsored series on the Shared Value Initiative. The author’s opinions are her own.


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  • Thierry De Gorter

    You should have a look to “i Horse Bank” at : http://www.ihorsebank.com (or the APP for iPhone, iPad, Android smartphones/tablets, or Facebook/Twitter).

    It’s about a cooperative system and bank for the horse spheres with a clear commitment for the environment and climate issues.

    If you want to support a sharing initiative, there is one with a big concern !
    Currently in the pilot stage.

  • Diana van Eyk

    Coca Cola and Lily — really? The concept sounds great but these companies make me wonder about it.

  • Tracy Puett

    RioTinto? Coca Cola? These are egregiously greedy, narrow corporate players. Their participation does not add credibility to the shared value domain. I’d like to be proven wrong though. I’d love it if the SVI had levels of membership, where a company could apply but would have to prove their commitment through defined criteria before being allowed in past provisional status. Simply paying for membership is not enough for these actors IMHO.

    • jenboynton

      Great points. We’ll ask SVI to explain why they have opened their doors to all these players in one of the blog posts in the series. They have an interesting perspective!