Companies Can Make ‘Doing Good’ Their Core Business: White Paper
29 November 2011 at 8:20 am
Companies can give more to the communities in which they operate, while boosting their own productivity and profits, if they adopt the principles of operational shared value (OSV), argues a new white paper.
The process identifies opportunities within a company’s value chain to create value for the community as well as the business, and can be applied to companies of any size and in any sector” said A.T. Kearney Vice-President, Phil Harkness.
“Shared value is a completely different way to look at ‘doing good’ as a company: it becomes part of the value chain, not something outside of it. A.T. Kearney’s methodology provides a roadmap for building that into a company’s operations.”
Harkness said OSV currently represents just 10-12 per cent of corporate social investment.
“In the vast majority of cases, social investment initiatives are centred on traditional models of philanthropy. But because it’s not viewed as core to the business, in today’s uncertain economic environment many see CSR as easy to cut, hard to measure and difficult to control,” said Harkness.
“However by structuring programs according to the principles of OSV, companies can deliver direct benefits to both the community and the business, creating a win-win for both,” he said.
Andrew MacLeod, Chairman of the UNGC PSI, said that well-constructed social investment was now recognised by leading companies around the world as giving positive returns to shareholders and the community.
“In the past, the link between social investment and profit has either been not understood, or avoided. The real revolution in thinking, and the way leading companies now look at things, is that the construction of a well-designed social investment programcelebrates the link with profit. As a result, it improves long-term sustainability of both a company and a community. If a company does not do this, then they are neither a leader nor are they maximising company strength,” said MacLeod.
A.T. Kearney and the UNGC PSI Secretariat are now planning to conduct OSV workshops with a range of leading local businesses. At the same time, the methodology is being reviewed by the UNGC PSI to assess how it can be rolled out internationally.
It’s an exciting indicator of change to see “shared value” start to displace “corporate social responsibility”, as social and environmental impact swing further onto corporate scope: next stop, regulating for organisational structures that have more than profit for purpose.
A piece in the HBR from Michael Porter who coined the phrase: http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1
In a follow-up to Jason’s comment and the article in general, Harman just released the sustainability report focusing on “shared value.” A good example of the transition for csr to csv.
I provide shared value strategy to brands in the US that already have a social mission or aspect at http://www.sharedvaluestrategy.org