Creating shared value: What exactly is it?
As a buzzword, creating shared value (CSV) is relatively new to the business world. As an alternative to the harsh realities of exclusionary capitalism, it comes as a breath of
fresh air.
CSV goes beyond the premise of balancing the triple bottom line of financial, social and environmental wins as formulated by sustainable development principles. It also extends past the strategic social recompense afforded by corporate social responsibility and investment.
In its purest form and as a business strategy, shared value is more closely aligned with the United Nations’ Sustainable Development Goals (SDGS) as well as the so-called circular economic model. Business as usual, whereby profit goes into a handful of pockets to the exclusion of so many other contributors to the creation of it, is no longer good enough. In the 2020s, the stakes are simply too high.
The Harvard Business School’s Institute for Strategy and Competitiveness (ISC) describes creating shared value as: “A framework for creating economic value while simultaneously addressing societal needs and challenges. When businesses act as businesses — not as charitable donors — they can improve profitability while also improving environmental performance, public health and nutrition, affordable housing and financial security,
and other key measures of societal wellbeing. Only business can create economic prosperity by meeting needs and making a profit, creating infinitely scalable and self-sustaining solutions.”
The ISC predicts that the concept will drive the next wave of innovation and productivity in the global economy.
The Shared Value Africa Initiative says CSV represents a “shift in business mindsets to find new ways to do business that are more efficient,
more innovative, reach more markets, and make companies more sustainable over the long term — while also being less harmful to the environment, less onerous for employees, less neglectful of the value chain and less exclusionary”.
It’s a more balanced, ethical incarnation of capitalism, if you will.
CSV is more than philanthropy. In addition to turning a profit, business has to get involved with other players such as government, non-profit agencies and NGOS to benefit communities, employees, the environment and all that goes with it. It also needs to align with the aspirations presented in the SDGS.
A good example, with positive results, is companies that invest in wellness programmes for their employees. This all started in Silicon Valley in the US, when Google and other tech companies created spaces and facilities where employees could feel at home, relax and even exercise. The result? A workforce that is happier and healthier: in other words, a workforce that is likely more productive. This way of working is being adopted by more and more companies around the world.
Another example of the shared value way of doing business is clothing companies that offer recycling drop-off facilities so that old, unused items of clothes can be upcycled for reuse.
The various levels of Covid-19 lockdowns have brought their own new challenges and solutions. One way in which the pandemic has radically changed the way we do business is that we have learned to work remotely and meet in cyberspace. When lockdown forced people to stay at home, Zoom made its remote communication technology available free of charge, thereby passing on value to ordinary folk working from home. This disrupted the need for meeting physically and solved potential communication challenges and bottlenecks at the same time. Life as we knew it before 2020 will never be the same again.