absa sharedvalue

Moving from Passion Projects to Sustainable Investments – The Evolution of Corporate Philanthropy

Corporate social responsibility (CSR) has become one of the standard practices of business. It has seen many incarnations over the years, and continues to keep evolving even today.

But for every corporate leader that believes it is an important part of any company’s business strategy, there is an equal number of dissenting voices that say it is nothing more than a corporate obligation forced on them by, either, legislation or public pressure.

Shared value benefits firms and society

A company cannot succeed in a society that is failing. These words, spoken by Sanda Ojiambo, head of corporate responsibility at Safaricom, crystallise the core message of the inaugural Africa Shared Value Summit.

Taking place in Johannesburg this week, the summit brings together business, the government and academia to explore best practice in the field of shared value — a concept dubbed by Harvard Business School professor Michael Porter in the Harvard Business Review.

Optimism about Africa's future

Africa is rising and fast becoming a lucrative commercial market with enormous investment potential. Despite recent slumps in commodity price exports, the growing relative political stability, improved economic governance and a more predictable business environment for investors means there is a growing optimism about the continent’s future, as the performance of economies of countries such as Ivory Coast, Tanzania, Rwanda and Mozambique keeps hopes of a growth explosion alive.

Ask a millennial if you need to know more about shared value

That business can have shared values — making a profit while effecting social change — is a notion millennials understand, and insist on.

Business strategy does like its catchphrases: terms such as sustainability, good governance and, of course, shared value. Each has merit, but a recent dusting off of shared value is particularly relevant in today’s constrained and challenging economic and business environment.

 

There is shared value in the South African film and cinema market

Issues of shared value are increasingly topical across much of South Africa, and are especially relevant within the local film sector, where there is a progressively more urgent need for greater alignment behind what “giving back” actually looks like. The nuances in this space are important, especially as we transition from local content in terms of its value as an art, towards where there is a more mature balance in terms of its sustainable commercial value.

SA company leads way as Porter’s Shared-Value business model gets traction

America’s biggest bank, Wells Fargo, has been fined $185m after disclosures that 5 300 employees had secretly opened 2m accounts for customers who didn’t ask for them. Wells reacted by firing those who did the deeds (average 377 each). Critics believe it is the CEO and his top team who should have been bulleted because staff were incentivised to act dishonestly by an excessively aggressive sales policy.

You have to wonder when companies like Wells Fargo will realise old style capitalism is dead. Since the Global Financial Crisis in 2008, progressive companies have been adopting business guru Michael Porter’s “Shared Value” business model – where customers, society at large and the business all benefit.

Shared Value: The new meaning for sustainability?

According to Incite, a consultancy based in Cape Town, South Africa, it is more useful for organisations to determine the role of their sustainability strategy. I recently had a chat with their Managing Partner, Jonathon Hanks, who presented the concept of shared value (SV). This is a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business. In their experience, an effective sustainability strategy allocates resources to optimise the delivery of value to society, whether social or environmental. This is the primary role of the sustainability strategy. 

The Triple Bottom Line, Inclusive Business and Shared Value

Today’s highly competitive, globalized, world requires organizations and businesses to think differently about how they are going to stay in business. They can no longer afford to focus on profits alone as other factors, such as social and environmental sustainability, are becoming more present – both in real terms as well as from a regulatory perspective. The hyper-connectedness of our modern world also means that customers now have more information about businesses than ever, as well as a greater number of choices, meaning that businesses that fail to understand all of what their customers are looking for will be substituted quickly.

Organizations must therefore think about ways to build sustainable business that incorporates more than just short term thinking on profits. 

Shared value, partnerships the ‘formula’ for African growth

Africa’s developmental challenges can only truly be met through the mainstreaming of public–private partnerships (PPPs) that drive the creation of a shared value in the pursuit of profits and the development of infrastructure, it was held at the EY Strategic Growth Forum Africa2014, on Wednesday.

The central premise behind creating shared value, EY CEO Ajen Sita explained, was that the competitiveness of a company and the health of the communities and economies around it were mutually dependent.

Are SA companies ready for shared value?

When Michael Porter and Mark Kramer published ‘Creating shared value‘ in Harvard Business Review in February 2011, the impact was huge. Although much of it was positive (a stellar citation rate; articles in The New York Times, The Economist, The Guardian; Davos roundtables; McKinsey’s award for the best HBR article in 2011), many within the sustainability community were less impressed.

John Elkington, executive chair of Volans and the nearest sustainability has to a founding father, took Porter deftly to task for his lack of subtlety. Paul Polman, Unilever CEO and sustainability’s leading light ever since he told short-term speculators to sell their shares in his company, was also unconvinced.

Others decided that the difference between sustainability and shared value was simply semantics. We don’t agree.

Creating Shared Value: How South Africa Led The World In Corporate Governance & Economic Empowerment

Part of the Searching for Sustainable Business series.

The concept of shared value became increasingly important for business in South Africa during the 1990s, long before it was coined by the Harvard academic duo of Michael Porter and Mark Kramer. Fortunately for me, I had a front-row seat. 

Is the concept of shared value possible in SA?

We are at a defining moment in our country’s history. The tragic violence brought on by Marikana, the multitude of service boycotts, countless reports of corruption, ineffective policy execution and the high inequality levels in South Africa are indicators that the country has broadly-based value creation issues.

A complete change in stakeholder thought and action is required at a national, industry and company level to create shared value for all.

This is the view of Tjaart Minnaar, Managing Director of OIM, one of South Africa’s leading business consultancy firms. He echoes Dr. Mamphela Ramphele’s recent call to build sustainable, local, economic development programmes. “Shared value, although a possible reality, will require a complete ideology shift whereby shareholders, customers, suppliers, employees and society at large will benefit.”

Shared Value: how corporations profit from solving social problems

We were delighted that John Elkington attended our second annual Shared Value Summit, held last week in Cambridge Massachusetts, and I was pleased to read his blogpost highlighting some of the synergies between shared value and sustainability. It is high praise indeed for John to say that sustainability might be the ultimate form of Shared Value.

John agrees with the central message of Shared Value about the power of business to solve social problems and increase profitability by aligning its commercial and social interests, but he raises several concerns. 

Sustainability should not be consigned to history by Shared Value

I was delighted to participate in the recent Shared Value Leadership Summithosted by FSG, a non-profit consultancy founded by Mark Kramer. Together Professor Michael Porter and Kramer wrote Creating Shared Value, published in the Harvard Business Review in 2011.

However, I left Cambridge, Massachusetts somewhat unsettled about some aspects of the way Porter seems to see the sustainability agenda.

Creating shared value: The new sustainability?

It’s the hot new buzzword in progressive business thinking – creating shared value, or CSV. Esteemed business thinkers Michael Porter and Mark Kramer introduced it in the January/February 2011 edition of Harvard Business Review, and it has stimulated lively debate since.

“We need to understand that what’s good for the community is actually good for business,” said Porter, explaining CSV at the World Economic Forum at Davos earlier this year. “If we can organise ourselves to do this stuff inside our operating units, rather than on the side, we can have a profound effect on many of the most important social issues of our time.” In Harvard Business Review, Kramer and Porter define creating shared value as “creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress.”