As the interest among corporates to use their core business to help solve social and environmental issues grows, Not for Profits and the government should also get on board with shared value.
Several years ago much of the conversation was about the definition of shared value. Thankfully, it’s moved on from that now – we were starting to get confused, too. Put simply though, it’s applying business thinking to solve social problems.
From our experience supporting organisations along their shared value journey, we have created our top tips for setting up your own shared value initiative.
Intention is the most important thing in this whole idea that is shared value. At its core, shared value is an approach that applies core business operations and strategy to solving social and environmental issues. It usually includes taking a partnership approach internally and/or externally.
The social impact must be created by design. Thought is put in up front as to how to tackle a specific issue through generation of business value. It’s not just a happy byproduct of something an organisation was going to do anyway. Often this is talked about in terms of returning to the original purpose of business, to serve the needs of a community.
- It’s much easier to deliver shared value when you have alignment between your organisation’s mission and vision, and the social issue you’re focusing in on.
- Being as specific as possible about what issue you are trying to solve makes things go even more smoothly. It’s important to contextualise the problem – who are you going to help and where?
- Partnering is generally essential. Partner with those who can do something better than you know how to and offer your organisation’s skills where it make the most sense.
Labels don’t matter
It doesn’t matter what you call it – whether it’s shared value, social innovation or social impact – the most important thing is that you’re doing it. Wasting time on figuring out whether it fits into one category or another and then worrying about which approaches or tools to use or not use isn’t helpful. And can hurt your brain.
Sustainability, corporate social responsibility and strategic philanthropy are all complements to shared value, not something to be differentiated from. In fact they can be termed “shared value enablers”, pieces of the puzzle that help create the environment to deliver a shared value outcome down the track.
- It’s not about whether something is or isn’t shared value – it’s about the path your organisation is on and what makes the most sense in the context of your organisation.
- Shared value as a concept has currency in corporate and business environments and can be a useful framing to introduce your social impact ideas within an organisation, or pitch your idea to a business from your Not for Profit.
- It’s important to recognise that shared value isn’t always the best approach to realise social impact on a particular issue. Shared value is not superior to the other categories, it’s simply another approach you can take.
Impact needs to be demonstrated holistically
Measurement and demonstrating social impact is important, but don’t forget to also measure your own organisation’s performance and even more importantly, start to plan for the the linkage between your financial metrics and your social impact metrics.
- There are lot of ways to measure and demonstrate impact, and it’s easy to be overwhelmed by all of the different methodologies. At the end of the day it comes down to asking some simple questions about what you are trying to communicate and to who?
- Materiality: how important is it that this program or initiative be measured? Not everything needs to be measured and some level of demonstration is always good, but what exactly do you need to communicate?
- Resourcing: how much effort is to be expended? Demonstrating impact can be resource intensive and it’s important to apply resource in proportion to the overall investment in the program or initiative.
- Audience: who will this be communicated to? Is this for your annual report or is this performance information that will inform the next iteration of the program?
- How: choose a method that suits based on answering the questions above. It may be a hybrid approach – some quantitative data and some qualitative data. Remember too that anecdotes and storytelling can be as important as the data.
Shared value needs to escape the corporate context
Although originally framed for the corporate sector (here’s the article that started it all), shared value can be applied outside of the province of business. All sectors can play a role and not just as “shared value partners”.
Shared value is about using core business and strategy to help solve social and environmental issues. Not for Profits and government also have “core business and strategy” and can meaningfully contribute their ideas to the mix.
- Not for Profits and government are closer to the ground when it comes to solving social and environmental issues, and have the expertise needed by the corporate sector to create change on these issues (which can be impacting on a business’s bottom line).
- Not for Profits and government can use the shared value framing to approach corporates who they can see would be a good fit for their resourcing needs and propose shared value partnerships, rather than the more traditional approach of corporates picking and choosing their partners.
What all of this means is that there is an enormous opportunity for businesses, Not for Profits and government alike to explore the shared value approach as a way to support profit for purpose outcomes for financial and operational sustainability for Not for Profits, and efficient delivery of social services for government. Don’t get bogged down in what you call it (labels are overrated, anyway) – as long as you have an intended social purpose there are a wealth of ways to apply business thinking to solve social issues and achieve financial sustainability for your organisation.