Exploring Shared Value in Global Health and Safety Workshop Summary (2016) / Chapter Skim
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5 The Journey to Shared Value
5 The Journey to Shared Value
Pages 59-72
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From page 59... ...
Key messages from the presentations and panel discussion are summarized in Box 5-1. OVERVIEW Kyle Peterson, FSG Before hearing from individual companies and organizations about their own journeys, Kyle Peterson, Managing Director of FSG, provided an overview of FSG's methodology for helping companies approach and deploy a shared value strategy.
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From page 60... ...
Peterson mentioned that, through its efforts to help companies strategize, implement, and sustain their shared value initiatives at their organizations, FSG has identified three phases that companies go through in their shared value journey. He noted that the first and the key proof point is developing shared value initiatives.
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From page 61... ...
One example is a chief marketing officer who is looking for a way to differentiate the company around its purpose or business unit. Peterson continued that the people who create shared value see social purpose as an opportunity to create competitive advantage through a company's or product's brand; see chances to address specific business challenges and think about shared value with a more specialized lens; see opportunity to complement traditional corporate social responsibility with shared value; and look across a company's many interactions with society.
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From page 62... ...
EXPERIENCES ON THE JOURNEY TO SHARED VALUE Eli Lilly and Company Bart Peterson, Eli Lilly and Company Bart Peterson, senior vice president for corporate affairs and communications for Eli Lilly and Company (Lilly) , oversees the company's government affairs, public policy, communications, market access in every country except the United States, and global health and corporate responsibility work, including the work of the corporate foundation.
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From page 63... ...
However, as Peterson noted previously, Lilly's major global health initiative, while successful at contributing to this responsibility, was unrelated to its current business. Over the past 15 years, Lilly's core business had shifted completely away from medicines for communicable diseases, but its global health flagship program remained focused on TB.
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From page 64... ...
Peterson cautioned those who are considering taking the journey to shared value to not underestimate the challenge of explaining the concept of shared value within your company. Companies are constantly facing challenges around cost efficiencies and it is easy for those in business to view shared value as a new gimmick that will take focus away from the company's core business.
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From page 65... ...
Stetz noted that, through the corporate foundation, Aetna funds technology to advance innovation and initiatives to increase access to healthy food and opportunities for physical activity in underserved communities with a focus on addressing health equity. These investments are targeted to improve the health of individuals and populations, including those that Aetna insures; improved health outcomes can reduce health care costs and serve Aetna's business.
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From page 66... ...
The challenge is that the expectations of different stakeholders are on different time horizons. Khan suggested senior executives are responsible for getting stakeholders to start to understand how to align time horizon and why it is critical.
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From page 67... ...
Individuals do what they are incentivized to do, and thus Khan asked, how do you get the disruptors in an organization to be incentivized, but allow the operators to then come along on this journey with the right incentive? Khan suggested that it requires balance and agreement among the chief financial officer, the head of human resources, and the head of innovation to incentivize the execution of an articulated strategy.
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From page 68... ...
While based on charitable giving, the MAC AIDS Fund has provided real business value for the company through customer loyalty and employee retention. Mahon raised a few concerns about the notion of shared value creation, which differs from the value creation through the MAC AIDS Fund that she described.
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From page 69... ...
Mahon commented that, through the MAC AIDS Fund and her experiences with the PPPs they have set up to achieve their goals, she has learned that partnerships, and alignment of objectives and culture across partners are hard. However, despite the challenges, consumers and consumer activism are pushing companies to engage in social issues, and through social media and their purchasing power, they will continue to push business out of their comfort zone to be involved.
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From page 70... ...
A focus on the private sector and the efficiencies that can be gained from their business is not a new concept for PSI, and the organization maintains partnerships with companies based on philanthropy and CSR. However, PSI sees its shared value partnerships as providing momentum and opportunity to focus on long-term business investments for the poor rather than just operating through 1-year grants.
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From page 71... ...
O'Kane emphasized that this mindset shift can start with a CEO, but needs to resonate with field staff in PSI's 65 countries that are managing partnerships and on-the-ground programs if shared value is to be truly embraced throughout the organization. Communicating with their partners and external stakeholders is an important part of PSI's shared value journey, both to demonstrate impact and to encourage more partners and stakeholders to join the journey.
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