Shared value

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More companies are recognising that their future success depends on supporting vibrant, healthy and economically resilient communities which provide both their workforce and their customer base.

Businesses contribute to their own success by creating jobs and educating people in the communities in which they operate, and by improving standards of health and quality of life.

This ‘shared value’ concept provides a cornerstone for social innovation, and is helping companies recognise that there is a large degree of convergence between their commercial goals and the wider needs of civil society.

Business value levers

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Source: Accenture, 2013

Size of the prize

  • Employees who feel they are contributing to positive environmental or social outcomes are more satisfied by a 2:1 ratio. [i]

  • Around £3 - £29 billion in cost savings for UK businesses are possible from reducing hiring costs and developing a more active and engaged workforce. [ii]

  • This corresponds to a potential increase in productivity by 16% and a reduction in employee turnover by 2%. [iii]

Diagram source: Accenture analysis [iv]

Sustainability benefits

The health of the workforce and the community can be improved, through better alignment of the commercial goals of the company and the needs of wider society. Jobs can be created in the UK or abroad, contributing to local economic development (for example through smarter use of local suppliers which could help mitigate against potential future supply chain failure). Standards of education and skills can be enhanced through programmes such as apprenticeships, academies and training programmes, developing transferable skills and bringing people out of unemployment.

Examples

  • In East London, outsourcing company MITIE have advocated this approach by developing a mentoring scheme in partnership with JobCentrePlus that gives unemployed citizens of all ages the experience and skills they need to get into long-term employment. The scheme has a 75% success rate of getting the graduate apprentices into further employment. [v]

  • intu Chapelfield shopping centre in Norwich has developed a work experience programme that employs serving prisoners. Prisoners spend eight weeks at the shopping centre, gaining skills ranging from building maintenance, customer service, recycling and painting and decorating. Only 5% of the work experience prisoners reoffend after release, compared to just under 50% nationally. [vi]

  • Novo Nordisk’s Changing Diabetes programme has trained over 220,000 physicians in China, who each treat about 230 patients annually. Through better diagnosis, more patients are screened for diabetes and those diagnosed put on life-saving medication. Novo Nordisk’s insulin market share has jumped from 40% to 63% in China, largely through greater awareness of patient needs. [vii]

You can’t create jobs that don’t exist, but you can level the playing field for those who don’t have the best chance in life. There’s a business benefit in broadening access as you may discover people with better talent.

- Paul Sheffield,
Chief Executive, Kier

Example questions to ask to help your business consider this innovation area

Opportunity What are key stakeholder concerns in relation to our business?
How could we improve the health and skills of our workforce to enhance productivity and worker wellbeing?
What common objectives does the business have with local communities and employees – and how can these be jointly addressed?
Competitors How are leading companies innovating and building shared value with communities, stakeholders and employees?  
Business case What is the positive impact on recruitment, retention and customer loyalty from developing shared value approaches? What costs and risks are avoided due to improved community and stakeholder relations?
Source: Accenture 2013

References

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