Shared value is a management strategy designed to help companies create measurable business value, through working with communities to address large scale social issues.

It generates new opportunities for businesses, civil society organisations and governments by encouraging the power of market-based competition in identifying social issues. There are three key ways you can create market value for your company:

1.    Establishing products and markets

Seeking new opportunities from communities, organisations and markets in need of new, profitable products or distribution methods can increase your market on a large scale. An example of this is when the company Becton, Dickinson released a new safety syringe in an attempt to reduce needle-stick injuries to healthcare workers. This development increased to $2 billion, which is approximately one quarter of BD’s revenue. Read the full case study here.

2.    Establishing productivity in the value chain

Locating the social and environmental constraints of your company’s value chain will help you find ways to optimise the productivity of your business and your suppliers. For example, a café working with cocoa farmers and relying on their supply of coffee beans would improve the lives and incomes of these farmers, while providing the café with a more sustainable supply of coffee beans. Walmart saved $200 million on distribution costs by decreasing their use of packaging and improving their delivery logistics. Read the full case study here.

3.    Enabling local cluster development

Find the areas of your business that your company relies on for productivity and growth, and build on these areas. This may be collaborating with university departments that focus on the knowledge your business requires to operate. Or working with logistics companies that you rely on to deliver your company’s goods. Cisco developed the Network Company, training more than four million network administrators worldwide to overcome their issue of expanding their server market. Read the full case study here.

Not for profit organisations can also benefit from shared value. By building on their strategic priorities, not for profits can improve the relationships with their partnerships in how they approach shared value and work towards positive social change. Funding relationships are considered far more than “partnerships”. They’re transactional exchanges where financial support is provided to support work within the community, an example of shared value.

If you want to learn more about shared value, there is plenty of useful information online or you might like to consider completing a short course. There is a 2 day course called Unlocking Shared Value being held in Sydney next month by the Australian Centre for Corporate Social Responsibility (ACCSR) and Incite (based in South Africa). The course is supported by the Shared Value Project and IAG, and taught by Jonathan Hanks, an expert in international sustainability and shared value. The aim of the course is to provide you with new tools and perspectives so you can successfully develop your own shared value strategies.

As some people assume, shared value isn’t about reallocating value obtained through business donations or using stakeholders’ values when making company decisions. It’s about building meaningful economic and social value and thinking outside the parameters of our own business, to establish new benefits that outweigh the costs for your business and society.