By Nicola Robins (4 June, 2014)
The Shared Value Leadership Summit took place last month in the heart of New York’s financial district – down the road from the 9/11 site and a stone’s throw from Goldman Sachs. The venue was intentional: Michael Porter and Mark Kramer shared some insights from their investor research (no, mainstream investors don’t yet care much for shared value; yes, there is movement afoot and Porter and Kramer are upbeat on the prospects).
You can download Porter’s slides here.
Here are my top five insights.
1. Shared value is attracting significant attention from multinationals and global development organisations. The large venue was packed. They anticipated 300 delegates and closed the doors at 400. Delegates stayed for the full summit, kept asking smart questions and the network buzz during the breaks was contagious. Take-home: It’s worth keeping an eye on this growing ‘movement’.
2. Emerging and frontier markets are where it’s at. It’s a far cry from 1994, when I did a talk at Yale School of Management about why Africa should be on their radar. Then they were polite. Twenty years later, Africa virtually dominated the agenda. Africa as a potential market; not African companies (see insight #5). Take-home: “We don’t call them emerging or frontier markets, we call them global growth markets” (Arif Naqvi, Group Chief Executive, The Abraaj Group)
3. Shared value leaders, such as Unilever, Nestle and Novartis, are charging up the learning curve. The gap between those who get it and those who don’t is really growing. Shared value seems to have helped companies to distinguish innovative social and environmental initiatives that genuinely build competitiveness from those that protect existing value. Take-home: To those in the network, the term shared value means something specific: innovation that addresses social challenges – at scale – as a business proposition. It is not another name for CSR. And it is not seeking to replace CSR.
4. The summit was resoundingly positive – recent critiques of shared value were not on the agenda. Fellow shared value affiliate Phil Preston’s recent post raises a few of these, as did the Financial Mail and Tobias Webb. They are all sources I read and respect. Despite the quasi-revivalist atmosphere, QED attitude and frequent reference to the ‘tectonic shift’ underway, shared value is not to everyone’s taste. While seeking measurable social results at scale, it promotes an unapologetic growth and competitive agenda. That fact, together with the brand’s growing appeal, has put some socially responsible noses out of joint. Take-home: Debates are good; metrics will be even better.
5. Despite the corporate love affair with Africa (or more cynically its growth prospects), African companies were noticeably lacking from the delegate list. Based on our experience, successful African companies are too busy riding the growth wave to spend time contemplating the nature of that growth. But as Oxfam’s CEO Winnie Byanyima notes, Africa is not rising for everyone. On the contrary, despite a rapidly emerging middle class, inequality is on the increase.
A number of multinational companies – particularly in consumer-facing sectors – are pinning their African growth trajectories on creating shared value in some way or another. If they get it right, it’s likely to go down well with institutional investors, governments and suppliers who are slowly waking up to the concept. These are the stakeholders that are likely to turn up the competitive pressure in African markets in the coming few years.
Take-home: If they continue to ignore social issues, African companies risk finding themselves being outcompeted in their own territory by the global beast that underdeveloped Africa over the past few hundred years. It’s just that the beast has grown up to be older, wiser and a lot more nuanced in the way it does business.
And here are my top five quotes.
“The investor community has a soul. You just have to look hard for it sometimes.” Arif Naqvi, Founder and Group Chief Executive, The Abraaj Group
“People sometimes question whether we feel comfortable working with the private sector on social initiatives. Have they forgotten where our money came from?” Zia Khan, Vice President, Strategy and Evaluation, The Rockefeller Foundation
“Internally, we are metric-obsessed. When we communicate our initiatives externally, we are emotional. Doing good does not give you a licence to be boring.” Jostein Solheim, CEO Ben & Jerry’s
“Private equity is one of the greatest forces for social change in the world. They’ve just not discovered that fact for themselves yet.” Arif Naqvi (again)
“I have never felt more optimistic about business; and about how we in business can matter. And I’ve never been more optimistic about our ability to do something big.” Michael E. Porter, Harvard Business School