Shared Value for the Industry
Create Shared Value through partnership
For many corporates, partnering with organisations in the community services industry can provide opportunities for both parties. This is what is explored through the Shared Value methodology, which focuses on how corporates and the industry can work together to make lasting impact and change.
What is Shared Value?
There has been plenty written about the methodology of Shared Value since Michael Porter and his business partner Mark Kramer first raised the profile of the concept in a number of Harvard Business Review articles. Together they highlighted existing and new case studies around the world.
Mark Kramer captured the essence of the Shared Value approach with the statement:
“Government gives you reach, business gives you profit, and NGOs give you social impact.”
The original definition for Shared Value, according to Porter and Kramer, is “building competitive advantage by solving social problems”. We at Social Scaffolding don’t think ‘solving’ is perhaps the best word, but maybe “shifting the dial”, or “impacting societal problems” is better language.
One step further through Creating Shared Value
The reason behind this is Creating Shared Value (CSV) something work exploring. CSV is when a corporate works towards solving a societal issue that is impacting their business. The community services industry may have the insight on how to solve that issue and can work with the corporate to “shift the dial” – this is real shared value.
When it comes to Shared Value, the opportunity for the community sector is not “what funding is available if we partner with a corporate”.
The approach is “what’s the social issue that is impacting the corporate, and how can we as a community service provider help “solve” (shift the dial on) this issue, that will benefit the service recipient, the corporate, and us as a service provider”.
It is also important to understand what CSV is not…
- Sharing the value already created, namely corporate foundations and philanthropy distributing their profits through charitable giving,
- Balancing stakeholder interests or trying to come to an agreement or compromise for compliance with local regulations (eg social licence to operate in a community)
- Short-term focus on business value or immediate social impact. CSV is about a focus on long-term economic development.
Developing the partnerships you need
To maximise these opportunities, and shift the dial on social issues, partnering becomes essential to CSV. So, what do these partnerships look like?
The community services industry has the ‘lens’ of the issue as they are in a position of trust including access to beneficiaries. The industry contributes to the design and innovation through knowledge of the social issue – they have the customer insight and data; they know what’s worked in the past and what hasn’t, and they have experience in delivery.
The corporate experience is in supporting innovation, as they have the space and capacity to be innovative. Corporates also have the expertise, resources and structure for product and service development, and launch of new products. Importantly corporates have the incentives to take risks.
Partnering can find the solutions faster and increase the impact, but every partner at the table must make a contribution (time, money, effort, buy-in, commitment, space etc). CSV is about partnerships, and partnerships take time, effort and cost money, this is no different to any normal partnership – except these investments may not be recouped.
Other considerations when it comes to partnering for CSV include:
- Partners need to agree on what “long-term” means. CSV requires a long-term focus, because economic development of community and competitiveness of business is long-term
- From the perspective of the community services organisation:
- who owns the IP?
- what’s the value of their expertise?
- is there a mutual sharing of the “upside”? Too often we hear of partnerships benefiting the corporate, but very little value coming back to the community services organisation.
Challenges of partnerships are that corporates can have different and opposing ‘values’ to the community services industry. This is Values – with an ‘S’ on the end. When considering partnering, note there is a significant and fundamental difference between VALUE and VALUES. Community and corporates don’t the need same “values” to work together.
Quite simply, the industry values community, business values profits. However together they can create value (no “S” on the end). It will help if the organisations do share the same values, but it is not essential. If the values are completely skewed (as we are seeing in the banking royal commission ie banks with a culture of profits at all costs) then that’s going to be a major challenge and likely demise for any partnership.
The combining of all these key points means that the community services industry provides a different perspective to what the corporate would get if they embarked on this journey alone. It is the co-design and Creating Shared Value that is making an impact and “shifting the dial” on a range of issues nationally and internationally.
The Shared Value Project is the peak practice body for Shared Value in Australasia. As the Queensland member of the Shared Value Project, Social Scaffolding work with the community services industry across a range of initiatives and developments and help corporates identify the social issue that’s preventing growth. We then develop partnerships with the corporate sector and community services industry to ‘shift the dial’ with their stakeholders.
If you have unique insights into a societal issue and considering partnering with corporates, contact the Social Scaffolding team: