Many companies have donated to social causes for years. For the most part, however, these philanthropic activities were viewed as nice things to do or as ways of improving the company’s image as a member of a local community, rather than as an investment in the business. Recently, however, a growing number of companies have come to recognize that advancing social causes is not only good PR, it can also be good business. Well designed and executed social programs can provide “shared value”—delivering at least as much value to the donor corporation and its shareholders, as to the recipients.
This practice, which has been aptly dubbed “Creating Shared Value”, is already being adopted by a growing number of companies. Maximizing this value, however, is not easy. It is difficult to build commitment through all levels of the organization, develop a true Shared Value culture and, especially, maintain focus and commitment in good times—and even tougher in today’s challenging economy. Most companies, therefore, need help in making a convincing business case to their executives and their boards, getting buy-in, building commitment through all levels of their companies and in understanding the ways in which partnering with other organizations can multiply the value delivered to all parties.
The last week of September saw three separate forums in which leading Shared Value proponents have attempted to provide exactly this type of help by sharing their visions, their experiences and their best practices with other companies and institutions.
One example is a webinar sponsored by FSG, a non-profit social impact consulting firm whose Managing Director (Mark Kramer) joined with Harvard Business School professor Michael Porter to explain the concept of Creating Shared Value (CSV) in a January 2011 Harvard Business Review article. After FSG set the stage by briefly explaining the evolution of corporate philanthropy toward Shared Value Creation and by laying out its Ten Building Blocks, it introduced Corporate Social Responsibility executives from three companies, each of whom provided an overview of how they made the business case and built commitments for CSV within their own companies. For example:
- Hewlett-Packard explained the need to align and continually reinforce vision, strategy, delivery and performance across all levels of the organization, from the board to branch executives and individual employees;
- Intercontinental Hotels demonstrate how its four-pronged model for a Shared Value sustainability program gained commitment, not just from its own executives and employees, but also from its franchisees and its customers;
- Houghton-Mifflin Harcourt showed how aligning its social commitment with its business objective (of “selling educational achievement”) and assisting its business leaders with the tactical requirements for managing such programs allowed it to maintain its program across the regimes of three CEOs in less than two years.
Although these and a number of other companies have certainly demonstrated commitments to Shared Value, as explained in previous blogs, I see two companies—IBM with its Smarter Planet initiative and General Electric with Ecomagination—as most embodying the ways in which companies can effectively integrate social value with their own business objectives.
IBM has been particularly active in both:
- Explaining the metrics it uses to assess the benefits of its social and philanthropic activities and the need to continually demonstrate the strategic value these efforts deliver to IBM as a means of “ensuring sustained support for these programs within its own company”; and in
- Evangelizing the importance of aligning business and social strategies and helping all types of for and not-for-profit organizations, academic institutions and governments work together to create mutual value.
In the last week of September, for example, IBM sponsored two forums to evangelize the value of and help other companies build their own programs—both individually and in concert with other organizations:
- THINK: A Forum on the Future of Leadership brought panels of industry leaders together with up-and-coming leaders from government, business, academia and science to examine the structural changes that will affect all organizations in the coming decades and the ways in which these organizations can, jointly and independently, reinvent themselves to improve the world in which we will all live.
- Regional Upward Spirals: The Co-Evolution of Future Technologies, Skills, Jobs and Quality of Life in which it convened leaders from leading institutions including think tanks (McKinsey Global Institute, Institute for the Future), universities (MIT, Berkeley and Michigan State), corporations (Boeing, IBM) non-profits (IEEE and CAEL) and regional technology clusters (Washington Economic Development Commission) to examine how technology will reshape the nature of learning and jobs, the skills that will be required in the new economy, the types of jobs that will be created (and those likely to face a shortage of qualified employees) and the opportunities for leaders in all segments to work together to create the jobs, the employees and the academic/industry clusters that will be capable of addressing the needs of tomorrow.
FSG and a couple of its clients, meanwhile, is already on the agenda for another webinar that will explain the ways in which numerous companies and organizations can work cooperatively to address societal needs—an approach they call Collective Impact (see FSG’s recent book, Do More than Give) and the Winter 2011 Stanford Social Innovation Review article). This approach, as it will discussed in a November 9 webinar, depends on each party applying a common set of measures to evaluate performance and track progress.
Forums, such as those recently sponsored by FSG and IBM, play critical roles in explaining the payoff—both corporate and social—and of providing guidelines for managing such initiatives. Hopefully, we will see many, many more by FSG, IBM and many other organizations, over the next couple years.