The US-based co-founder of the Shared Value Business Concept, Mark Kramer, says he’s extremely impressed with the progress Australian companies have made since he first explored the model here five years ago.
Kramer returned to Melbourne to speak at the Shared Value Forum as part of the Shared value project and was full of praise for the companies that had advanced the concept at that time.
The 2017 Shared Value Forum explored the Business Reimagined theme: Innovating Through Shared Value, and focused on the innovation required for leading companies to create successful shared value initiatives that benefit the community. company.
“Australia has come a long way,” Kramer told Pro Bono News.
“I have been truly impressed each of the years that I have come back here, how the momentum has built for shared value and understanding and awareness.
«At the very first Shared Value Forum [in Australia] all of the participants were really talking about philanthropy projects and they didn’t really understand that shared value was about competitive strategy and business plans.
“This year, all people talked about was a business initiative that was truly a shared value initiative. “
He said there had been a change in attitude towards the benefits of the concept.
“We had a session with analysts and pension fund investors and we did it for a few consecutive years and the skepticism that reigned in the analyst community two or three years ago, I found a lot of it. less and I actually saw that they really embraced the idea, ”he said.
“I think there has been a huge positive development here in understanding the idea and companies are really starting to think about how to put it into practice.”
– Shared value project (@sharedvalueaust) April 26, 2017
Kramer said the basic concept of shared value hasn’t changed over the years.
“The basic idea that companies can create a competitive advantage by having a positive social journey, that this can be a source of innovation and an aspect of strategy, I think that still remains of the original idea” , did he declare.
“I think our knowledge and understanding of this area has changed a lot over the years. We are developing teaching cases for Harvard Business School and we taught the first Shared Value course last year.
“Michael Porter [co-founder of shared value concept] and I did executive training sessions. This is the third year that we’ve been doing this and as we’ve really looked at companies in depth with examples of shared value, I think we’ve gained a much deeper appreciation for how it works, what it does. must, benefits.
Asked about outstanding examples of shared value in Australia, he highlighted the NAB Assist program describing it as “a phenomenal example of shared value”.
“Instead of just imposing fees and penalties on people who are behind in their payments, they are working with them to restructure their debt and they are deleveraging 97% of their population within 90 days,” he said. .
“And that actually brings in $ 70 million a year in NAB’s bottom line that would have been bad debt and it’s a wonderful innovation and it’s the only bank that does and it’s a fantastic example of shared value. . “
Comparing Australia with other countries committing to the concept of shared value, he said Australia was “absolutely up there”.
“I think some Scandinavian and European countries have really embraced this concept, but I would definitely put Australia in the top 10 and I suspect it would be in the top five,” he said.
In 2012, Kramer told the Melbourne’s first forum that the challenge for companies was to think about what social value meant to them and what they could do to amplify the social value they were creating.
He said there were three ways for businesses to engage in society – through traditional corporate philanthropy, ongoing corporate responsibility, and by creating shared value where businesses find opportunities to solve problems. social.
“Businesses have a unique opportunity to develop programs that governments and NGOs cannot do,” he said.
Kramer told the forum that the thought of shared values represented “the next evolution of capitalism itself”.
“Shared value is the most important shift in thinking and will generate benefits for the next decade,” he said.
“Shared value adds ‘a third goal’ by thinking of social needs and business opportunities. “
In 2011, the Harvard Business Review published The Big Idea: Creation of Shared Value by Kramer and Porter.
“Businesses need to reconnect business success with social progress. Shared value is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success, ”Kramer and Porter said in the Harvard publication.
The Executive Director of the Shared Value Project, Helen Steel, has previously described Shared value like “putting social problems at the heart of the company’s objectives”.
“The simplicity of the concept and the ability to refer to Michael Porter and Mark Kramer Create shared value, make it applicable and a powerful way for Australian companies to work with society and be part of the new social agenda, ”Steel wrote in a Blog for Pro Bono News in 2015.
“The adoption and successful adoption of Shared Value in Australia can be reflected in the progress the Shared Value Project has seen since its inception as a forum in 2011, bringing together leaders to discuss’ what- what shared value? ‘Rapid adoption by businesses and our formal establishment in 2014 as a leading shared value organization in Australia, and regional partner of Shared value initiative.