The Growth of Shared Value
23 March 2016 at 10:10 am
When Rhod Ellis-Jones read the first article about shared value in the Harvard Business Review he was inspired to spearhead the movement in Australia. In this month’s Executive Insight, he explains how shared value has evolved over the last four years.
Rhod Ellis-Jones, founder and Deputy Chair of the Shared Value Project and principal at consulting firm Ellis Jones, has been fostering partnerships between the corporate and Not for Profit sectors since the early 2000s.
“I was managing what was referred to at the time as blueprint partnerships between corporations and Not for Profit organisations,” Ellis-Jones said.
“But what I saw time and time again in those relationships was that… a lack of alignment in purpose meant that they were unsuccessful a lot of the time, if not all of the time.
“Within that, having worked in communications for a number of years, I saw CSR become a public relations tool of the business rather than a focus for business improvement and growth. Let’s not be too absolute about that, it’s just predominantly that was the case.”
When Kramer and Porter wrote about the concept of shared value in the Harvard Business Review in 2011, Ellis-Jones felt that it was the answer to his corporate engagement concerns.
“I read the article and went: ‘Bang, this is actually the way we should be framing corporate engagement of social sector issues, this is how we can get the capital flow from the corporate sector to social problems,’” he said.
“And the reason it’s continued to be so important is because government has been steadily, for 30 years, retreating from responsibility for social welfare, and essentially outsourcing that to Not for Profits, arms-length public institutions and sometimes companies.
“But certainly the toughest basket generally gets addressed by Not for Profit organisations that are required to, as I used to term it, walk up to Spring Street in Victoria every year and sing for their supper; clearly not sustainable, completely inefficient and ultimately not very effective when we look at the intractable social issues that we have had for so many decades.”
After reading the article he called a meeting at Ellis Jones and said: “‘This bridges our client base, it’s one of the frustrations we’ve all voiced, and it frames what we do in our work, let’s invest in it.’ And off we went.”
He also wanted to establish a network for the movement in Australia, and created the Shared Value Project with the initial purpose of hosting forums to flesh out whether the notion had merit.
“At the same time I flew over for a meeting with Marc Pfitzer, managing director of FSG Group in Europe [and colleague of Porter and Kramer], based in Geneva, and had this quite robust discussion about their intentions and our intentions,” he said.
He said they recognised they were serious about the issue. “We had their confidence in Australia to be able to start building a network and to connect with those other Australian entities that had been in contact with them as well.”
But Ellis-Jones said there were significant challenges to spearheading a new concept, especially in the face of the negative perceptions of CSR.
“We were one of the first voices in what would be called a movement now, so there were a lot of people who saw it as a rehashing of what had been, saw it as another corporate attempt to make money under the guise of doing good, as a negative thing,” he said.
“There were significant investments in money and time at the agency level before we actually got any work in that space, so it took a tremendous amount of resilience and persistence amongst the team here, but it paid off in the end.
“It’s a growing practice, but the important thing is it’s reoriented the business itself.”
He said that, despite the hurdles, he was determined to implement shared value in his business.
“We couldn’t not do it. Essentially it reflects exactly how we view the business – we view ourselves as a shared value business, so regardless of whether the word was going to stick, we are a shared value business, it’s how we’d been for many years,” he said.
“That in itself meant we just stick to our guns and just be that business, and I think it’s just blind persistence.”
As for the Shared Value Project, he said it “stumbled, ran, stumbled, ran” before growing into what it is today.
“It became an incorporated Not for Profit organisation a year and a half ago, which was a reflection of a significant interest of corporate Australia, and also some key players in the Not for Profit sector, and therefore, in itself, that validator of shared value as a philosophy and a growing practice that is sustainable,” he said.
“That’s one thing that happened that I think’s important. You can’t do it unless you get the big corporate players involved and you get practitioners learning how to use models that are related to it.”
The advancement of the Shared Value Project allowed him to focus his efforts on growing shared value initiatives at Ellis-Jones.
His team were on board and collectively said: ‘You beauty, now we can focus more on the doing, rather than the explaining.”
“In four years, from 2011 to 2015, shared value has very clearly defined our business and what we stand for and who we are, and it’s also meant that even our traditional work is geared towards work that has a measurable social impact.
“It’s opened up new areas that didn’t exist before, where we have a dialogue at a senior leadership level in business about these sorts of concepts and opportunities, which you just couldn’t have before.
Ellis-Jones works with corporations and Not for Profits to develop social impact strategy, identifying opportunities that will drive business growth while establishing social purpose.
Over the last 12 months the agency has been concentrating on change campaigns, using brands to drive behavioural change for a better society.
“We’re a consulting business, so we work with other business and that’s the beauty of it. Without us they couldn’t have the results they have, and without them we couldn’t get the results we need,” Ellis-Jones said.
“The more recent one, #BeTheLast, [was] a social change campaign for a company called Probiotec and a collaboration that they have with the CSIRO called Impromy.”
The campaign, aimed at weight loss, resulted in a spike in the number of people visiting pharmacies for health checks.
“The aggregate weight loss from that program is a number of kilos higher than any other weight loss program in Australia. The program focuses people on their health as a weight related issue, not body image or food,” Ellis-Jones said.
“It relies on the fact that you’re ill if you get over a certain weight, and in doing so, it’s playing a very important role in changing Australian’s perceptions in what they think overweight is.
“If we think about the bloke leaning against his ute with a bit of a beer belly and going, ‘there’s nothing wrong with me mate’, he’s borderline type 2 diabetes.
“That’s what we need to address in Australia. This program does that because you have to have health checks in pharmacies before you can get on the program, right there and then they’ll tell you how at risk you are.”
Ellis Jones said the positive benefits of shared value were greater than profit and social change, and the movement has created a positive company culture and attracted loyal staff.
“The work is very rewarding, it feeds in on itself, so we have very smart, very motivated people with diverse backgrounds who were attracted to the agency because of its purpose but also the ability to do the work they’ve trained to do and have a social impact,” he said.
“We’re able to attract people who are very culturally aligned, so the team’s very tight.”
He said another benefit was that it’s made it clear to potential customers “who we are and what we do”.
“We get a lot of interest in our work, but generally from people who want to work with us, want to work with this agency, rather than others.
“So it’s been beneficial in differentiation and doing the right kinds of work that reward our staff.”
Ellis-Jones said it was still early days for the practice of shared value, and the Shared Value Project needs to continue to ensure that the concept is clear and well-known to Australian business and society.
“I think we’re still on an education path where we’ve got some really strong endorsement and application among some leading corporations in certain sectors, but there’s a lot more opportunity there,” he said.
“I think the future will see new sectors come on the shared value journey, we will find more projects that are more specific to those industries occur, and I do hope that it becomes the overarching paradigm for how businesses view their role in society.”
He said that one of the challenges that needs to be overcome is the continued resistance from some CSR practitioners.
“People have invested years and years in being a CSR expert and then overnight this new language came and threatened the platform they were on,” he said.
“So even now we’ve still got lots of people who don’t know what this is even though they’re in senior roles in corporate responsibility.
“I think what we’re going to see over the next few years is continued understanding, broader awareness, more people choosing to train in this space and more projects.”