The Oracle at Delphi in ancient Greece- famous for the adage "Know thyself".
By Scott Mackay, MSc, RPP, Managing Partner
(This is the second of a blog series by Scott as he attends the Shared Value Initiative’s Affiliated Professional Services Training in London, UK this week, and we acknowledge the Shared Value Initiative for the core concepts which appear below)
Creating shared value (CSV) is about identifying unrealized opportunities at the intersection of social and environmental problems and business performance. But to do so, businesses need to be clear about both their business purpose and their social purpose. And building a social purpose into corporate strategy can be important for several reasons that relate directly to its competitiveness such as:
- Lowering costs
- Growing revenues
- Differentiating a company’s value proposition
In defining their purpose to others, businesses normally focus more on what they produce, or their outputs - for example, producing widgets, cars, clothes, or hotel stays. But when a business defines its social purpose, it is explaining how the outcomes of that production contribute to solving social and environmental problems. In defining social purpose the challenge for a business is to understand the potential for its outputs to contribute to the outcome(s) of good in the world. Once that is understood, it is relatively simple to succinctly frame a social purpose so that it points to those outcomes.
To make this less abstract, here are a few recent examples of companies’ business purposes reframed as a social purpose:
Nike (shoes)- “Health”
Nestle (food)- “Nutrition”
Mini/Rolls Royce (automotive)- “Green Mobility”
IBM (computing/IT)- “Smarter Cities”
While these examples may look very simple, they instantly connect in powerful ways when you fit them into a sentence which begins with “Our purpose is to produce…”
The Importance to Creating Shared Value (CSV)
Social purpose and social vision may have many “soft” benefits such as public relations value, staff motivation and loyalty, etc.- all of which are important. However, developing a social purpose is central to CSV because it becomes a litmus test for selecting shared value opportunities.
For example, in this case study from Nestlé about creating a nutrient-fortified food product to address anemia in malnourished women in developing countries, the company uses its social purpose- Nutrition- to specifically identify both a solution to a social problem and an unrealized business opportunity.
When a business knows its social purpose, it has the advantage of being able to screen and develop:
- Shared value initiatives that align with its business performance
- Key leverage points that the company can act effectively on
- Targeted social or environmental problems that define the scope of an initiative
- Measureable indicators of success
All of these of these of course help with making the business case, and for an initiative’s ultimate feasibility.
By definition, any CSV effort needs to have social impact, create business value, and be feasible to do. By getting clear on your social purpose, you are setting the stage for success.
At Shared Value Solutions, we have woven social purpose into our core values, our vision, and the work we do every day and into all of our branding. On this basis, we are building a profitable niche consulting business, are attracting and retaining amazing and innovative employees, and are beginning to develop joint ventures with community organizations and industry which bring wealth creation, community development, and competitiveness together in one place.
About Shared Value Solutions Ltd.
Shared Value Solutions Ltd. is a human environment consulting firm located in Guelph, Ontario, Canada, and an affiliate of the Shared Value Initiative. We focus on creating shared value through extractive industries projects, large infrastructure development initiatives or environmental remediation projects. Our entry point for creating shared value generally starts with the environmental permitting and approvals phase of project development. We currently focus our efforts on aligning profit-making and social/environmental good for progressive companies and Aboriginal communities, but also work for governments and NGOs. If you would like to know more about what we do, or to get more information about our services, please do not hesitate to contact us. We look forward to helping you find and capitalize on your company’s social purpose!
(c) Shared Value Solutions Ltd., 2013