I was fortunate to sit down the other day with Dr Sarah Cobourn, Senior Officer of Corporate Affairs at Hitachi Australia, to chat about the evolution of Corporate Social Responsibility (CSR). Sarah recently completed her PhD thesis on the topic of Creating Shared Value in Professional Sport: An International Investigation of Corporate Social Responsibility (Synopsis here), and is a sought-after conference speaker and corporate educator in Australia and overseas.
The Creating Shared Value (CSV) concept is the brain child of Harvard professors, Michael E. Porter and Mark R. Kramer. Their Shared Value Initiative, founded in 2012 under the guidance of not-for-profit consultancy firm FSG, has given the idea serious punch.
Shared Value is “a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business. The shared value framework creates new opportunities for companies, civil society organizations, and governments to leverage the power of market-based competition in addressing social problems.”
Q: Sarah, in your opinion, what is the main difference between CSR and Shared Value? Is CSV an extension of the CSR concept or indeed a more radical departure from previous responsibility and risk management centred strategies?
Creating Shared Value is an evolution of the CSR model. The main difference is that CSR is typically driven by the CSR department, and as a consequence often separate from core business operations, whereas Shared Value is driven by management from a high level, strategic point of view. Shared Value is a new way of thinking for organisations that seek the best possible outcomes for themselves as well as the stakeholders they engage with – a win-win situation that makes economic sense but also provides value back to the community, environment and society. A good example is companies installing solar panels on their roof tops. CSR would focus here on the need to do better on environmental indicators. With Shared Value, it’s important to also highlight the cost savings and other tangible benefits to the business. Its credibility stems from the acceptance that companies operate on a for-profit basis, but they must also still be agents of transformation and change.
Q: In your thesis, you found that measurement and evaluation are vital to “selling” CSV internally and externally. What are some of the Key Performance Indicators (KPIs) that companies should focus on when they embrace Shared Value?
Measurement and evaluation are indeed important, not only for management to gauge progress but also to benchmark performance. When organisations do not understand or track the interdependency between social and business results, they can miss important opportunities for innovation, growth and sustainable scalable social impact! However, KPIs and reporting are only one part of the story. While Shared Value originates from management, the reality is that most businesses start with smaller projects and initiatives. I would argue that anecdotal evidence that “it works” is often just as important as looking at the stats. Especially in the context of employee buy-in and engagement. Shared Value has to become something tangible, real; even for workers that barely have exposure to strategic decision making frameworks.
Q: One of the most intriguing aspects of your work focuses on executive teaching and coaching. What are the main business benefits of the Shared Value approach from management’s point of view, and what are current hurdles to adoption?
Shared Value allows a new language with which to connect business and society through a business case and value proposition. It is a powerful concept that can prompt companies, especially senior management, to think differently about their approach to social and environmental issues. However, it must be remembered that CSV does not solve all problems. There is still an important need for philanthropy and CSR activities.
Q: There’s a fair bit of industry discussion about the innovation concept usurping CSR (see for example Mark Stoiber’s article: Will CSR adopt or die?). Does innovation potentially provide a stronger messaging platform to drive organisational transformation or are Shared Value and Innovation largely complementary, if not mutually inclusive?
They are certainly complementary if not mutually inclusive. Social innovation can be the driving force to spark change and drive large scale social and business benefits, thereby a common ground for shared value creation. Businesses must think about how they can adjust their products and/or services to address specific societal challenges. That may involve, for example, reconceiving existing products, expanding to new markets or redefining productivity in the organisation’s value chain.
Follow Sarah on Twitter: https://twitter.com/sarahcobourn