The Shared Value Project in collaboration with Social Ventures Australia recently released The State of Shared Value in Australia 2015 Report. An Australian first, it provides an insight into the state of shared value nationally. We took a closer look at some of its key findings.
A starting point
“As companies around the world increasingly embrace shared value, it is essential to document the social and business benefits that accrue through studies like this in order to demonstrate the value and difference of this approach from conventional CSR and philanthropy,” said Mark Kramer, co-founder and managing director of FSG and co-author of the Creating Shared Value (who we also interviewed here), on the inaugural State of Shared Value in Australia report.
“We are deeply impressed by the level of enthusiasm for shared value in Australia and, although this report attests to its still-nascent status, we look forward to the continued expansion of this concept through the pioneering efforts of the Shared Value Project staff and members.“
In April of this year the survey was sent to 163 companies, a mixture of ASX 100 companies and those with strong experience or an interest in creating shared value. Of those contacted, 41 responded, among them were NAB, Nestlé, Westpac, Lion, WorleyParsons and GPT. Of all the companies surveyed, 46 per cent indicated that they were either currently pursuing a shared value strategy or had done so in the past.
The survey asked a series of questions that centred around three key areas:
What issues do you care about?
The survey found that there was no clear relationship between the sector that the company belonged to and the social focus of their interventions. Instead, companies said their strategies worked to impact a wide range of issues. These included employment, education, homelessness, disability, health and indigenous disadvantage, among others.
What are you doing to address these issues?
Most of the examples provided by respondents of their shared value strategies fell within or across the three categories outlined below:
- Reconceiving products or services to either meet a societal need (at a profit) or address an undeserved or unserved market.
- Working to address social (including environmental) issues in order to reduce costs and increase productivity in their value chain.
- Improving the local business environment through building the capabilities of suppliers and civil institutions, or working to redesign the regulatory framework to enable trade, while improving conditions.
What are the main benefits and challenges associated with addressing these issues?
While all respondents were clear in their desire to pursue and grow their strategies, they did note it was not always easy, with the results finding consistent trends between the main challenges they faced. These challenges could be broadly filed into three key categories:
- Internal perceptions and communication
- Outcomes measurement
- Alignment and delivery
Every single respondent in the survey said that their shared value strategy helped build brand value for their company. They also indicated that it contributed to: stronger employee engagement and increased attractiveness as an employer from a recruitment perspective; increased customer satisfaction and improved customer engagement; and improved stakeholder and partnership engagement.
Social returns were identified as another benefit, as was core-business returns. Some companies noted that while they are yet to realise the economic benefits of their shared value interventions, they are confident this would change in the longer-term.
The survey identified two key needs moving forward. One, for more sharing, respondents indicated a need to learn more about how to measure and realise benefits from other companies also attempting to pursue a shared value strategy. Two, the need for more conversations, with respondents saying they need more communication and conversations around shared value.
What do you think? Does your business have a shared value strategy?
Read more in the report here.
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