Shared Value fundamentals (Inspired by Business Harvard Review, Jan/Feb 2011)

As companies grow, they try to find share value with society. Some will try to find this link as an employment creator, others will try environmental factors, other just believe that the simple fact of being there is a favor for the community (BIG NO NO). Well, it will not surprise for you to hear that it takes more than that.

The key is to find the needs and challenges the society is going through. If you are located in a small town, you might be looking at creating or providing different business the opportunity to support your business. If you are in a big city you might be looking at participating in school programs, adopting a highway or cleanup. The important thing is for you to understand the need and give a hand.

The company will and I repeat, will, create some externalities. The company will bring and disrupt the environment in new ways, it could be traffic, environmental, air pollution and others. Smart companies will stay ahead by developing programs which will be ahead of the curve and any regulation impose by the community or government. Many time is this externalities the reason why the community imposes taxes or penalty as a way of control, so stay ahead and the society will appreciate that you recognized the waste or a bi-product you are creating. Most likely the community doesn’t want you to go, but is important not to abuse the relationship.

This are some good ways to find that shared value:

Reconceiving the products and markets

Is this a product or service that the society benefit from? Not only that is it good for society but is it better than yesterday. (nutrition, gas mileage) By doing this you are not only making yourself more marketable but you are creating pride on your company and its product.

Productivity in the Value Chain

The time to look at productivity as making something faster/more with less people is starting to fade away. There will always be opportunity in labor, material and overhead, but in order to create a strong relationship with the community other buckets should be consider:

1. Environmental impact
2. Supplier access and viability
3. Employee skills
4. Worker safety
5. Employee health
6. Water use
7. Energy use

Building supportive industry cluster

This area is one where you not only get to share the knowledge and up-skill the community but also try to create a talent pool in the community. This talent pool can be use by you and other business (small or big) in the area. Many will join forces with the local education system, high school, trade school, community college or even universities to provide this type of programs.

I can not say this without warning you, that this area will create competition for talent. Companies may move to the neighborhood, established companies might start doing some innovation that require the new skills, etc... 

With education the society will grow, will be more attractive for new talent and synergies between the company and the community will grow stronger.

Whatever you do, remember that the shared value is always changing, being part of a community is a very dynamic role so take advantage of that and become a keystone for the community around you.