Shared value – Sharing Values – a must for sustainable business
A more sustainable future will require that we devise ways of developing and sharing value. Many of the problems we face are not ones that can be addressed by an organisation on its own. We hear a lot of talk now about stakeholders and how they need to be invovled in the decision making process. This is partly linked to the movement towards openness and transparency and also by the access to information allowed by new technologies. Another reason is that to gain access to more sustainable opportunities often requires stakeholders’ involvement. Many opportunities are of shared value and can’t be accessed by one organisation alone.
The move towards more efficient production and cost reductions over the past several decades have been impressive, however such efficiencies are principally based within individual organisations – a unit’s efficiency . In order to tackle many of the problems we face, future efficiency gains will require a system based efficiency and this poses a whole new set of problems.
An individual company may not have the resources, the information or the market reach needed in order to access the new potential efficiencies. In such cases they may need to team up with stakeholders based on partnership, mutual respect and sharing of values instead of trying to rely on size of budget and a winner takes all mentality. This often means giving primacy to the relationship building process and teaming up with others who share the belief that the whole is more than the sum of the parts.
Currently, this type of business arrangement is more readily seen amongst the social entrepreneurs, whose ethics and values more strictly guide their actions. An example is the work being done by SMILE Resource Exchange in Cork. This is a social enterprise which encourages the exchange of resources between its members in order to save money, reduce waste to landfill and to develop new business opportunities. Their networking events are growing all the time and involve an increasing number of buisnesses in the exchanges. See www.smileexchange.ie
A problem with accessing these ‘shared value’ opportunities is how do we share the value gained. The current control and measurement systems that guide our activities are the law and accountancy. They are several hundred years old and very rooted in the old model of unit based measurements (and controls) and as yet we have not designed robust or widely accepted system based measurements (and controls). We reward ‘selfish’ behaviour and have done for many years. Now, we desparately need to find ways of rewarding the sharing behaviours.
We can often see how ‘joined up’ thinking would work better, how by working together we could all benefit but we can’t see how to make the necessary changes. There is nearly always someone who will bring up the problem with insurance, the matter of ownership, the legal constraints. We need to be brave, to push the boundaries, to test new ways of doing things and change our behaviours and attitudes or we will forever miss the real opportunities. We also have to focus on building relationships of trust with our partners so that the shared values can be accessed.
A very necessary step is to identify and build relationships with stakeholders who share the same values in order that we can successfully access the shared value! If we can not measure and divide the value generated through current accountancy and legal measures, one way to do so is through trust and consent. Social enterprises have been doing this for years through negotiated stakeholder consent and such models are beginning to make sense to business as we move towards sustainability. When an industry attempts to address a widespread environmental or social problem it often can only do so through joint efforts. If the focus of negotiations is always on the economic bottom line and the ‘winner takes all’ mentality, then the rules of competition will apply. When consideration is given to a shared ‘win-win’ approach then engaging with trusted stakeholders can allow many to share the benefits. This requires a quite different mindset to current business practice.
