Shared Value: More than Just a Catch Phrase?

Customers shopping at a grocery store. Photo courtesy of Amy via Flickr Commons. 

Professor Michael Porter, head of the Institute for Strategy and Competitiveness at the Harvard University School of Business, and Mark Kramer, Managing Director of FSG, a social impact advisory firm, pulled no punches when discussing the deleterious effect that capitalism has on the state of the earth and the relationships between those who inhabit it in a 2011 article in the Harvard Business Review. The blind spot of capitalist business practice, they argue, is the belief that business is all about profit, no matter the effect on the environment, health, or welfare of those affected along the supply chain. They believe that blindly prioritizing profit has underpinned a global loss of trust in business and led some governments to adopt policies that hurt business. They also argue that corporate social responsibility investments have not helped. They often do not yield the expected positive results — not for business or for the communities or projects that should benefit from the investment.

The big idea punted by Porter and Kramer, to address this, is the concept of 'shared value' — that the way business is done can benefit the bottom-line and society simultaneously. They propose that this can at least partly be achieved by fair trade practices. This idea has caught on. Shared value summits are being held around the world, with a second South African summit planned for late May this year, which amongst other things will look at how businesses can help countries to meet the United Nation's Sustainable Development Goals. But, as Porter and Kramer have pointed out, we are a long way from understanding exactly how the alignment between social and business needs can be operationalized.

Based on the description of the three main components of shared value offered in the materials for the South African shared value summit, shared value is still being viewed way too narrowly, and is too directly linked to supply chain management and market development. A broader, and deeper, interpretation of the concept of shared value would require the inclusion of people with a greater diversity of knowledge, experience, and expertise from various sectors taking part in the discussions. Business cannot do this alone.

There are partnerships that are pushing the envelope and opening the way for new thinking about how to imagine and create shared value. One example is the collaboration between South Africa Partners (a U.S.-based non-profit organization that promotes productive United States/South African exchanges in the fields of health and education), Innovation Edge (that describes itself as 'an innovation catalyst and investment platform with a social impact agenda'), and a leading national South African supermarket chain.

South Africa Partners was inspired by the findings of research conducted by Temple University in Philadelphia. The researchers there set out to turn grocery shopping into learning experiences for small children. In particular, they drew on the research that shows that children from low-income homes learn fewer words from their caregivers than children from more well-off homes. Vocabulary acquisition is important for stimulating brain development, and it helps children prepare for school. What the Temple researchers found was remarkable: just by adding signs, such as one in the milk aisle that said: "I come from a cow. Can you find something else that comes from a cow?" lower-income parents started having three times more conversations and positive interactions with their children who had come shopping with them. (There were fewer, if any gains for middle and upper-income children whose parents were already engaging them). When South Africa Partners adapted and tested the idea in a supermarket for low-income shoppers in the Eastern Cape in South Africa, something even more exciting happened. As Carol Cashion, South Africa Partners Education Program Director explained to me, not only did parents have more conversations with their children, they also had fewer arguments with their kids.

Lower-income South African parents do take their children with them to the store — in fact a focus group held by South Africa Partners revealed that they do this as a way to spend all-too-rare time together — but often these trips just add to parental stress, erupting into arguments over candy and sweets. Stimulating and prompting positive, brain-building, learning interactions between children and their caregivers through well-designed and carefully thought out signage can turn these interactions around. The research also showed that parents from low-income groups do not think of themselves as their children's first teachers — they don't know that talking to young children about what you see, experience, and read around you in everyday settings is essential brain food.

So, there is clear value to be gained, for children and society, from using this relatively simple and cheap method to turn supermarkets into classrooms — but where is the value for business? According to Cashion, "the signage makes for a better shopping experience; happy customers are loyal customers; loyal customers buy more and shop for longer. And children play a big role in how and where their adults shop, so if a child enjoys going to the shop that displays these signs, adult customers will follow."

To realize real shared value, partnerships between sectors are key. In this case, South Africa Partners was aware of the research and how to use it to inform a practical solution. With seed funding from Innovation Edge, they were able to adapt and test the idea. Having shown that it can work in South Africa, South Africa Partners is offering this new shared value opportunity to a major retailer in the hope that it will invest big and reap the rewards. But the partnership cannot end there. You need to know what kinds of questions to ask on the signs, where to place the signs, and how to evaluate impact. This is not something that shop managers or staff working in retail stores, or even advertising agencies, can be expected to know if they do not have research experience or knowledge about child development and early childhood education. This is specialist knowledge. To work effectively, this also cannot be seen as a short-term marketing campaign, but needs to be embraced as part of a long-term re-visioning of how a retailer can deliver value to its customers in a way not previously imagined. Working collaboratively can make this happen. It will take partnerships across sectors to give real substance to the vision of shared value, and bring about positive social change.

Chandre Gould is a former Southern Voices Network for Peacebuilding Scholar during the Spring 2018 term. She is also a Senior Research Fellow for the Justice and Violence Prevention Program at the Institute for Security Studies in South Africa