“Businesses are focusing on social innovation – for good”
By Pietro Leone, Geometry Global EMEA CEO, London
Fortune Magazine has published its inaugural Change the World list of for-profit companies tackling major social problems. It’s an inspiring read that challenges the hard-wired thought that winning in business is based purely on profit.
Behind the many success stories is a new approach to the company role: shared value. Introduced by Michael Porter and Mark Kramer, shared value is not about one-off projects that “do good” or looking at corporate social responsibility as an adjunct to the main business of making money.
Shared value is about working with society, where “we” becomes more important than “them and us” – and traditional tensions between capital investment and local communities begin to dissipate. It’s about working at any scale, from local to international, to make the world a better place to live in.
As capitalism comes to terms with its weaknesses, the perpetual quest for growth as the key company valuation model is being brought into question. A new model to evaluate shared value must emerge.
Business is responding to the wake-up call. Unilever is just one of the many global companies reporting the accelerated growth of socially responsible brands. Paul Polman, CEO of Unilever, announced that these brands “accounted for half of our growth in 2014 and grew at twice the rate all of the rest of the business.”
Inspired by lessons learnt from the brands we work with at Geometry Global, here are five steps I see on the journey to building a shared value business:
1. Show not tell
People are less brand-loyal and companies need to focus on their purpose. In the wake of economic recession and lost trust in big business, it’s the “why” that matters. Back in 2012 P&G’s former global marketing officer Jim Stengel published Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies. His 10-year study conducted with WPP’s Millward Brown Optimor across 50,000 brands proved a direct correlation between brand purpose and financial performance.
2. Coherence and consistency across decision-making
Take Nestlé: its 2014 Creating Shared Value report underlines a belief that for a company to prosper long-term and create value for shareholders, it must create value for society at the same time.
In 2014, Nestlé retained equal lead ranking in Oxfam’s Behind the Brands scorecard with Unilever and was placed second in its industry globally by The Dow Jones sustainability indices. It also remains in FTSE4Good, which measures the performance of companies that meet globally-recognised corporate responsibility standards.
3. Power to the people
Help people to get by and they will survive, make them part of a joint future and they produce and thrive.
Coca-Cola’s Rain for Sale campaign shed light on the lack of clean drinking water in Lloró, Colombia. People were encouraged to collect rainwater in Coca-Cola glass bottles and sell to affluent company CEOs. As a result a water treatment plant was built in town.
Another great example, from the Fortune list: Cisco has pioneered an outsourcing collaboration between its Israel office and Palestinians with tech skills. It’s helped the West Bank’s IT outsourcing sector to grow 64% between 2010 to 2014 and has helped build the local economy.
4. Shared value is not a band-aid
It’s not a quick fix. Dove’s Campaign for Real Beauty, now 11-years-old, recently extended its aim to create a world where beauty is about confidence, not anxiety with Ad Makeover, using an app that outbids ads with negative keywords, ensuring that space would be won by messages that make women feel beautiful instead.
What’s more, companies are powering through even where there may be financial impact. In May, Emirates SkyCargo – in a move to protect wildlife – banned loading hunting trophies of lions, rhinos, elephants and tigers.
5. New technologies can accelerate the force for good
It’s well known that traditional diabetes treatments need patients to stick to a regime of medication and monitoring, demanding strict discipline and regular visits to the doctors.
Vodafone has created the technology to help launch the world’s first remote wireless glucometer, allowing people to proactively monitor their blood sugar levels.
Most of us are intuitively value-driven. Everything in life starts with you and your values, and it’s the same in business. Reach out and connect with people with a common, shared plan, including what you hope to accomplish. Big business is beginning to understand social innovation at scale, which is good for society and our future.
Pietro Leone is chief executive officer at Geometry Global EMEA