Ahead of the next Melbourne Development Circle event, Shared Value: Partnerships in Development on Tuesday June 14, we thought it would be good to start with the question: 'what is shared value?'
The term was coined in an article by Michael E. Porter and Mark R. Kramerhere in 2011 called Creating Shared Value. Here's an explanation of the term to distinguish it from 'corporate social responsibility' or the idea of redistribution of wealth.
1. What is 'Creating Shared Value'?
What does the term “creating shared value” mean? It already has an acronym, CSV, and it’s in fact a powerful concept for companies to use. Ultimately, it’s a strategy for developing the future market while also strengthening economies, the marketplace, communities, and corporate coffers. But the term runs the risk of being confused with the phrase “corporate social responsibility (CSR)” or, worse, with the idea of redistributing wealth. To combat the confusion, we are launching a video to illustrate and explain the concept of CSV.
Many businesses leaders were interested in this new way of creating more value in their business and the idea started spreading.
2. Want to embed purpose in your company? Start by identifying your most bountiful resource - KSS Architects
Companies have discovered the secret to hiring talented young professionals and cultivating a culture where innovation and engagement are a thriving driver of business. And it’s not free lunch, nap pods, or weekly happy hours (though all of those are certainly perks). It’s embedding real, tangible purpose in the business—solving social problems through the principles of capitalism. It’s building a new economy with emerging leaders, and it’s called: Shared Value
3. From CSR to Shared Value: How Respecting Human Rights is Actually Sound Business Investment - LinkedIn
Integrating Human Rights into corporate thought is not about changing how companies spend their profits but it is about how they earn them. Philanthropy is a good thing, but it's not what we’re talking about here. Respecting Human Rights means redefining a company’s business model to incorporate basic principles. Human Rights should be approached as any other investment would be approached in a company.
The implementation was not always perfect, and some wonder if the idea is right for every business:
4. Is 'shared value' corporate spin or a genuine game changer? - Australian Financial Review
Shared value is about solving social problems in a commercial way, but not everything that a company might do to reduce negative impacts of their business and create positive impacts will be profitable. Issues like supporting human rights and stamping out internal corruption appear to be better tackled by the CSR approach than shared value.
5. Shared value: who will bring the leadership required? - The Mandarin
While the sceptic might worry that its core ethic of improving social or environment conditions while making money seems to mean many things to many people, the Department of Foreign Affairs and Trade offered an insight into how it’s helped provide clarity in dealings with the private sector.
What do you think? Join us for Shared Value and Public-Private Partnerships in Development with Melbourne Development Circle.