The CSR Value Continuum: From Value Distribution to Shared Value Creation

Wayne the teacher copy By Wayne Dunn

“That is shared value not corporate social responsibility.”

That is the reaction I received two weeks ago after sending a note about my value-centric approach to CSR and highlighting the economic sustainability inherent in CSR projects that have robust value propositions that can align the social, economic and developmental interests of companies, communities, shareholders and other stakeholders.

CSR is a complex, evolving and exciting area that is finding new ways to create and distribute value. Simultaneously, the language and frameworks around CSR are evolving rapidly and helping executives, practitioners and academics with practice and understanding. We are all learning and none of us is an “expert.” I want to share some of my thoughts on CSR, shared value and a framework that has helped me to be more effective in this space.

The concept of shared value has been eloquently described with powerful voices that have done well to help business and society understand what it is, to think about how to develop it and realize the compelling value propositions that it can create. Professor Michael Porter and his team, through their work, their writing and the gravitas they carry, have helped many to see and think about business differently. As they wrote, shared value “generates opportunity, innovation, and competitive advantage for corporations—while solving pressing social problems.” To my thinking, this makes shared value an important aspect of CSR and good business strategy.

I believe that we do a disservice to business and corporate social responsibility if we place shared value actions outside of the scope of CSR, and I don’t think this is what Professor Porter and others intended at all.

I’ve spent a couple of decades developing, analyzing, evaluating and supporting CSR-related projects and programs around the world and across industries and sectors. Working on more than 60 projects in that time, I’ve developed some frameworks and tools that I find very helpful to allow me to analyze and understand specific situations and strategies. One I nearly always use is the CSR Value Continuum. It helps to look at the various CSR programs, projects and initiatives that a company is doing and place them on a continuum ranging from value distribution through to value creation.

Clearly, shared value is at the value creation end of this continuum, focused on finding those opportunities where 1+1=3; identifying value propositions that can align corporate, stakeholder, community, environment and other interests — creating new value by making the pie larger. At the other end of the continuum are value distribution actions. These too are important. They are where companies share or distribute value in a voluntary and strategic manner so that communities, stakeholders, environment and other interests receive new value, and some level of value is created for the company through goodwill, reputational capital, social license enhancement, etc. Notice that at both ends of the continuum the actions produce value for the company, that there is some alignment of shareholder and stakeholder interest. If there wasn’t, why on earth would the company do them?

The mistake that people sometimes make is to assume that those CSR projects and initiatives that are at or closer to the value creation end are necessarily more important, that companies should do more of these and less of other projects. The full range of CSR actions — grants, donations, scholarships, education, training, community development, environmental restoration, local institutional development, local infrastructure, employment and skills development, local procurement and business development — are all important tools.They can be important for the company and for local stakeholders.

Depending on the specifics of each one, they will situate differently on the continuum. But in general something like grants, donations and scholarships would fit more towards the value distribution end of the continuum, while local procurement and business development would tend to be closer to the value creation end. The value continuum is useful in revealing to companies how their actions fall on a distributive-to-creative scale, and this understanding can help both strategically and tactically to optimize value return from CSR investments.

Companies and projects stand to maximize benefit by consciously thinking of their CSR projects and activities in terms of the value continuum and have a spectrum of activities that span the continuum. This benefit includes discovering new strategies and opportunities for creating and capturing more value from existing activities — opportunities which risk being overlooked if focussing only on one end of the spectrum.

CSR is a complex and evolving field. There are some great projects and great innovations happening, and value is being created in exciting and innovative ways. I’ve found that practical tools and frameworks like the value continuum can help companies and practitioners to enhance their understanding of the value aspects of their CSR activities and to be more efficient at creating and distributing value.

Wayne Dunn is a Professor of Practice in CSR at McGill University in Canada (he calls himself an accidental academic). He has over two decades of practical experience in CSR at all levels and all over the world. His work has been used for a Stanford Case Study and has won many awards including the first ever private sector project to win a World Bank Development Innovation Award. He is currently the Executive Director of the CSR Training Institute and is developing and delivering Executive Programs around the world. He is a Stanford Business School Sloan Fellow and lives on Vancouver Island in Canada. He can be reached at wayne@csrtraininginstitute.com.

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