We sat down with Craig Hoy, executive director of PublicAffairsAsia to discuss the principle of shared value and how it will impact communications strategies in days to come.
What is ‘shared value’?
Nothing focuses minds like mutual benefit. The financial crisis made many global management teams examine their business, scrutinising every budget line and every opportunity. For many years corporate responsibility was viewed as a cost-centre, part of the broader marketing budget in some organisations. Then came the realisation that it does not need to be a one way street – that companies could expect a return on their investment. This process, which is often now referred to as “profit with a purpose” or creating shared value underlines that by focusing your business on areas where there is a social, economic or environmental need you can actually drive change and deliver bottom line results.
How can shared value be positioned to not be seen as just another promotional strategy, similar to how some CSR initiatives are being perceived?
To remain true to their founder Professor Michael Porter’s original concept, shared value initiatives should be measurable – in dollars and cent terms. They should show a social or environmental impact external to the business, and a result on the bottom line. So, for example, a hotel group which focuses on energy reduction should be able to explain what the impact is in terms of C02 reductions and also what savings it made in energy or water costs. It’s when these two align that you’ve created a programme where the value is truly shared between company and society. Once that’s achieved it should be a simple proposition to communicate to stakeholders and shareholders. Your business has benefited and society has benefited: it’s a win-win proposition which will find favour with investors, governments, not-for-profits and civil society as a whole.
How do you identify a good partner for a public-private partnership?
First off you ought to be looking for partners who have a synergy with your business. So if you’re a food company you should be looking to develop programmes in areas such as food safety, security or nutrition. If you’re in the auto industry, it should be in cleaner fuels or road safety. The programmes, and therefore, the partners you approach should have a natural alignment with what your business does. In the past, many companies took the easy option – a beach clean up, or funding a school for poor kids, even when it had no direct linkage to their operational capabilities. It makes practical and business sense to develop programmes which are aligned to your core business activities.
Once you’ve identified the type of programme you should be engaged in, then it’s time to approach partners, working with them to finesse the objectives you hope to achieve. Partner selection involves normal due diligence approaches, making sure that you can work strategically for the long-term, and ensuring there are no significant conflicts of interest. Be cautious of partners that are only looking for funding: if they don’t want your company’s knowhow or business insight then it’s unlikely to be an equal partnership.
How do you see shared value impacting communications strategy in the future?
I think that this shift from giving to doing, and the focus on ROI, means that communications professionals need to be more strategic and results-focused if they are to have any impact when they communicate what their company is doing in the CSR or partnership arena. Projects which are cute, cool or cuddly might make people warm inside for a few moments, but if there’s no lasting impact then attention will quickly dissipate. When you can tell a story, which has a beginning, middle and an end which shows results, people will sit up, listen and learn from your experience.