What is shared value and why should your business care about it?
Shared value is “the principle of sharing value which involves creating economic value in a way that also creates value for society by addressing the needs and challenges” Porter and Kramer
Today I attended the Shared Value workshop in Coffs Harbour facilitated by Phil Preston.
Phil prefaced the conversation by highlighting the difference between value and values. Shared value is NOT about like people who share values doing business – Shared value is also not about charity, philanthropy or corporate responsibility.
So what is this shared value thing and why should your business care?
It’s a simple economic equation. Shared value, when applied in a timely and appropriate manner makes money for your business. It’s about two sectors (community and/or a not for profit and business) working together, it’s about building business strategies that embrace the carrot not the stick (compliance) and it’s about building a business as usual approach to working towards the betterment of the community.
Let’s think real estate for a moment. Phil gave an excellent example of a not for profit entity (the Western Sydney Community Forum) who partnered with a real estate agency with a view to reduce homelessness. What was the shared value initiative about? It’s simple. The initiative would enable cost savings across evictions and problem tenants, simultaneously generating more sustainable generation of revenue for property owners.
What was this initiative? The agency would become akin to a triage service identifying potentially problematic tenants and providing referrals to relevant services. Services such as family support, budgeting, financial advice etc. Services that the tenant may never have heard of before.
The result – from 102 referrals, 57 tenancies were saved.
It was the articulation of the initiative that became a stumbling block for other agencies. What was initially presented as an initiative that aimed to “develop mutually beneficial relationships between real estate agents and services that work with the homeless and disadvantaged” became;
“We work with local real estate agents to reduce rent loss, introduce and sustain tenancies”
Note the stark difference – the language is important…