1. Creating Shared Value:Bridging the gap betweenbusiness and societyBy Tony Usidamen

2. Contents Background CSR vs CSV CSV Model Explained From Thought to Action Conclusion? 3. BackgroundA few decades ago talk about the impact ofbusiness on the society was largely unpopular.There is one and only one social responsibilityof businessto use its resources and engage in activitiesdesigned to increase its profit.- Milton Friedman, Nobel Laureate economist and intellectual luminaryof the modern free-market, capitalist movement 4. Background IIIn recent years, however, business increasingly hasbeen viewed as a major cause of social,environmental and economic problems.The demand for organisations to do good isstronger than ever, and this movement has beencalled several names over time, the most commonbeing CSR, Sustainability and, more recently, CSV. 5. CSR vs CSV what its aboutCSR CSV Impact of business onPeople + Environment Diversity Practices: WasteManagement + Energy Use+ Carbon Emissions Rights Issues: Child Labour+ EmployeeWelfare Marketing Practices etc. 6. CSR vs CSV What it isntCSRCSVNOTPHILANTHROPY 7. So, whats the difference?what animal do you see? 8. So, whats the difference?And now? 9. The difference between CSR & CSVis a matter of perspective 10. The difference between CSR & CSVCSR is a complex, evolving and exciting area that is findingnew ways to create and distribute value. Simultaneously, thelanguage and frameworks around CSR are evolving rapidlyand helping executives, practitioners and academics withpractice and understanding.I believe that we do a disservice to business and corporatesocial responsibility if we place shared value actions outside ofthe scope of CSR.- Wayne Dunn, Professor of Practice in CSR at McGill University and President,CSR Training InstituteIf anything, the proponents of CSV have helped to define theunderlying sustainability concept in CSR in much clearer termsthan CSR practitioners have tried to do over the years.- Tony Usidamen, Communications Consultant and CSR Advocate 11. CSV Defined:Shared Value: Corporate policies and practicesthat enhance the competitiveness of a companywhile simultaneously advancing social andeconomic conditions in the communities in whichit operates.- Professor Michael E. Porter and Mark R. Kramer(Harvard Business Review 2006) 12. How to Create Shared Value 13. CSV:Reconceiving Products & Markets I Design products and services to addresssocietal needs e.g. environmental impact, safety,health, education, nutrition, living with disability,housing, financial security 14. CSV:Reconceiving Products and Markets IIThe Cart-Away Concrete Systems ExampleIn response to thegrowing cases ofbuilding collapse dueweak concrete, Cart-Away designed asimple, portablemachine that insuresreliable, strong concretefor building purposes 15. CSV:Reconceiving Products and Markets III Open new markets by serving unmet needs in underservedcommunities Redefine the business around unsolved customer problemsor concerns, not traditional product definitions Think in terms of improving lives, not just meetingconsumer needs Identify customer groups that have been poorly served oroverlooked by the industrys products in both advanced andemerging markets 16. The Problem Lack of access to fresh,natural foodsSocial Impact Meet the communitysdemand for healthy foodsCSV:Reconceiving Products and Markets IVNnamdi & Sons Drugstore ExampleInnovation Create food section inresponse to untappeddemand for groceryBusiness Impact New market providingalternative source ofrevenue Increase in bottom-line 17. CSV:Redefining Productivity in the Value Chain IIncreasing the productivity of the company or its suppliers byaddressing the social and environmental constraints in its valuechain.To maximize productivity, companies need to reassess how theygo about the following aspects of their business: Procurement Resource use Energy use Logistical efficiency Employee productivity Location of facilities and the supply chain 18. Redefining Productivity in the Value Chain IIAlhaji Musa Coffee Importer ExampleThe Problem (farmers)CSV: Inconsistent & insufficientsupply from farmers Farmers low productivity duelack of access to technology &capitalSocial Impact Stable income and increasedtechnical know-how for localfarmers Reduced production cost andmarked increase in supply ofcommodityInnovation Offer long term contract tofarmers assuring patronage Assist with access to latestfarming technologyBusiness Impact Steady supply of commodity Reduced operational cost Increase in profit 19. CSV:Redefining Productivity in the Value Chain IIIAlhaji Musa Coffee Importer Example (contd.)The Problem (for customers) High cost for restaurantoperators due high energyconsumption of availablecoffee machines and high fuelconsumption of generatorsSocial Impact Lower energy consumptioncoffee machines or alternativeenergy sources Reduced operational cost forrestaurant owner andincreased profitsInnovation Design coffer maker withlower energy consumption Invest in development ofalternative power sourcesBusiness Impact Increased demand for thecommodity Increase in bottom-line 20. CSV:Building Supportive Industry Clusters I A strong local cluster with capable local suppliers andinstitutions improves company productivity e.g. greatersupply chain efficiency, lower environmental impact,and better access to skills Companies, working collaboratively, can catalyze majorimprovements in the local cluster and the local businessenvironment Local cluster development strengthens the link betweena companys success and community success 21. CSV:Building Supportive Industry Clusters IIAyinla Beer Brewing Company ExampleFarmBarley, Hops,Sorghum etc.Ayinla BreweryAccess to cleanwaterBottling CompanyPackaging companyLCCIPolicy Makers(Government)Other BreweriesCompanies can play a role in improving weak infrastructure andsupporting strong components of the clusterto boost efficiency of production. 22. CSV:Building Supportive Industry Clusters IIINGOs The need for engagement in opportunities that fortifyvalue cannot be overemphasized More than money, it is the mobilization of manpower,of knowledge, of personal interactions that builds value This is why an increasing number of companies areentering into strategic alliances with NGOs, and vice-versa 23. CSV: The ChargeThe whole Idea of Shared Value is to get companies thinkingdifferently; innovating new ways of creating value. Can your organization use this framework as a way to beinnovative? Can you access new markets or expand existing markets? Should your company look at different ways to structure itselfto take advantage of cost savings through increasedproductivity? What is the newest product you should develop to tap anunder-served market? 24. Are Investors ready to embrace CSVs longterm thinking? To be successful, Shared Value must be more than asimple campaign with a catchy slogan It requires a meaningful, long-term commitment fromcompanies, and it will derive strength to the degree thatinternal and external stakeholders will be willing toembrace the model To this end, it will be important for companies to sharebest practices, challenges and case studies to advancelearning 25. An Open, Unending Conversation... The need to bridge the gap between business andsociety has never been more imperative, andpractitioners and academics are researching andevolving new ways to create and distribute value Yesterday, it was all about CSR but today we are talkingCSV; who knows what it will be tomorrow? One thing is clear though: we must keep thesustainability conversation going, and continue strivingto ensure that the success of businesses is the successof society too!- Thank You - 26. 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