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Creating Shared Value Impact:
What Makes a Shared Value Gamechanger?
Research Work in Progress
at CamEd Business School, Phnom Penh, Cambodia
Ken Charman
CamEd Business School
TCI / MOC Asian Chapter Conference: 02 July 2021
1
The Motivation
Why Study Shared Value Impact?
Why look for Gamechangers?
2
Creating Shared Value Impact: What Makes a Shared Value Gamechanger?
What’s the Motivation?
A personal view based on the Porter & Kramer (2011) Concept:
• Business needs and societies’ needs must converge
• Business (and microeconomics) is all about incentives
• Shared value is distinct from other forms of social enterprise
• it is the only one with absolute limitless incentives to make profits and address
social needs
• (so all incentives are in the same direction)
3
Creating Shared Value Impact: What Makes a Gamechanger?
What is Creating Shared Value?
Creating Shared Value is:
• Making a profit whilst simultaneously delivering a social need (Porter and Kramer 2011)
Examples:
• Access to basic products & services (e.g. a bank account, healthcare) in remote areas
• More affordable healthcare (and health insurance)
• Improved opportunities in the agricultural industry to retain the workforce
• Improved opportunities for lower paid work (e.g. hotels and tourism)
• Energy saving and improved environment (especially water)
• New skills for the workforce (e.g. basic banking,, construction, logistics, plumbing)
• Better access to energy, solar power, internet (e.g. ENEL) 4
Creating Shared Value Impact: What Makes a Gamechanger?
Why Should we Look for Shared Value Gamechangers?
• Once in a while a business idea comes along for which there is:
• A vision and an intention to improve the wellbeing of society
• An innovation to address a social need
• Effective demand (so there is no redistribution – the social need is met by the
business)
• Returns (profits) above the industry standard (due to the effective demand)
• It changes the way that the industry sector works
• It becomes the ‘new normal’
• This is a ‘shared value gamechanger’
5
Creating Shared Value Impact: What Makes a Gamechanger?
Why Should we Look for Shared Value Gamechangers?
Vision
Intention
Innovation
To Address a Social
Need
Target Market
(the underserved)
CVP
Effective Demand
Potential Profit
New Products and
Services
New resources
New competences
New Collaboration
Marginal
Initiatives
Sustainable
Practices
Gamechanger
Innovations
Platform for Growth
Further Innovation
Serving the
Underserved
A New Normal
6
Strategy to Address
a Social Need
Target Market &
Business Model
Build Resources
& Capabilities
Impact for the Firm
and for Society
Result for the Firm
and for Society
Strategy to Deliver Shared Value
Impact for the firm and for society depends on:
The size of the market
Serving Basic Needs
Ability to Deliver Those Needs
Creating Shared Value Impact: What Makes a Gamechanger?
Developing a Framework to Assess the Impact of Shared Value
My target is to develop a framework which can be used to measure the impact of
shared value for the company, the sector, (the cluster) and the social needs
It should be something companies can understand and use
This is progress to date!
7
The Literature
A Review of the Literature on Creating Shared Value
8
Creating Shared Value Impact: What Makes a Shared-Value Gamechanger?
Guiding Light: Literature Review
Dembek, K., Singh, P., & Bhakoo, V. (2016). Literature Review of Shared Value: A
Theoretical Concept or a Management Buzzword? Journal of Business Ethics, 137(2),
231-267.
Dembek et al (2016)
• There is no consistent definition of shared value and no consistent measurement
• (so it is difficult to distinguish shared value from any other form of socially oriented business)
9
Creating Shared Value: What Makes a Shared-Value Gamechanger?
Guiding Light: Literature Review
• Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between
competitive advantage and corporate social responsibility. Harvard Business Review,
84(12), 78-92.
• Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review,
89(1/2), 62-77.
Porter & Kramer (2011)
• Level 1: CSV Products and services need a Customer Value Proposition (CVP):
• Level 2: CSV in the value chain (building competences and resources, less waste)
• Level 3: CSV Enabling cluster collaboration and development
My view: it is the cluster (Level 3) which links the firm level and the societal level
shared value
10
Creating Shared Value: What Makes a Shared-Value Gamechanger?
Guiding Light: Literature Review
Kramer, M. R., & Pfitzer M.W., (2016). The Ecosystem of Shared Value. Harvard Business
Review…….
Kramer and Pfitzer (2016)
• The ‘ecosystem’ is the way that private companies, NGOs, community members
and governments all have a role to play and should work together to address the
social problems which are so immense, under the concept of ‘Collective Impact’
• There are too many competitive free-riders
11
The Research Problem
There is No Framework to Measure the Impact of Shared Value
There never was one!
12
Creating Shared Value: What Makes a Shared-Value Gamechanger?
Guiding Light: Literature Review Conclusion
Main conclusions of the literature review by Dembek 2015)
• No agreement on definition
• No agreement on measures
• No clear distinction between social enterprise and shared value and other forms of society friendly business
I would add
• No framework that makes a business friendly assessment
• No framework that actually measures intention (a priori) and impact (ex post)
Porter and Kramer (et al) have already identified the parameters to define and measure shared
value
We need to go back to Porter and Kramer’s original intentions to see if the original parameters
of shared value can be used to create a useable framework to measure shared value 13
The Research Question
Towards a Framework
14
Creating Shared Value: What Makes a Shared-Value Gamechanger?
How do we build a Framework to assess shared value impact?
Assess the components of shared value (Porter and Kramer 2011)
1) What is the intention to create shared value?
2) What might we expect to see (for the company and for society) if it
is successful?
3) How might we measure progress (impact)
15
Creating Shared Value: What Makes a Shared-Value Gamechanger?
Firm Level Shared Value
How can we measure shared value from the Company’s and Sector’s perspective?
• Level 1: Products and Services
• Market size and profitability (local economy, national, global) (marginal, sustainable, supernormal)?
• Innovation impact (delivering a social need in a new way)
• Reputation Platform (what further opportunities can result?)
• Level 2: Value Chain
• Cost and waste reduction
• Resources building
• Competences and skills building
• Level 3: Cluster
• Local economy building
• Cluster and institutional collaboration (does it get more companies and institutions involved)?
• Spillover potential (to other related sectors)
16
How might we measure ‘firm level’ shared value impact?
Private Sector Benefit Indicator Source Value
Creating Shared Value (Level 1): New Needs, Products and Customers
Market Size and Profitability No. Customers / people benefitting Sales data
Innovation Impact A new way to deliver a social need? No similar products of services available
Reputation Platform Does innovation create new opportunity New businesses spun-off as a result of the
innovation
Contribution to Value Chain Improvement (Level 2)
Reducing Cost & Waste in the
Value Chain
Areas and quantities of savings (how much and
where they occur)
Company reports and accounts
Building Value Chain Resources Resources created manufacturing / logistics New Infrastructure in value chain
Building Skills and Competences New skills/competences, abilities New skills directly related to innovation
Contribution to Cluster Development and Collaboration (Level 3)
Cluster Building New cluster activity/suppliers/local economy New business activity / local skills
Cluster & Institutional
Collaboration
New collaboration/institutional support? Interviews with cluster members
Spill-over Potential Opportunities for related spill-overs? Interviews with cluster members 17
How might we measure ‘societal’ shared value impact?
Social Needs
From CSV Concepts Presentation: From the Social Progress Index
Energy Efficiency Basic Human Needs: Nutrition & Basic Medical Care
Environmental Improvement Water and Sanitation
Water Use Shelter
Jobs for Low Paid Workers Personal Safety
Economic Development Foundations of Wellbeing: Access to Basic Knowledge
Affordable Housing Access to Information & Communications
Workforce Skills Health and Wellness
Health Environmental Quality
Worker Safety Opportunity: Personal Rights
Education Personal Freedom and Choice
Inclusiveness
Access to Advanced Education
You may add other sources / areas (be creative) 18
Creating Shared Value: What Makes a Gamechanger?
Social Needs Impact
How can we measure shared value from the Social Needs perspective?
1. Quality economic activity (including public policy impact)
2. Education and Workforce skills
3. Health and Safety
4. Social Progress (basic needs, wellbeing and opportunity)
5. Improving the Environment
19
How might we measure ‘societal-level’ shared value impact? (1 of 2)
Societal Benefit Indicator Source Value
Quality Economic Activity
Economic development Is there an increase in economic activity? Employment (especially for lower income) and
output data
Jobs for low-income
citizens
Have new sustainable jobs been created? Employment data, skills developed
Flourishing Local Economy Local economic activity / Infrastructure Employment data / affordable infrastructure
Education and Skills
Education (school) Improved availability of affordable
education
Number and quality of schools (e.g. PISA)
Education (adult, college,
university)
Improved take-up of college or university Enrolment at university / college
Workforce skills Increased professional and vocational
skills
Numbers trained in vocational skills
Health and Safety
Health improvement of
population
Is there a general improvement in health (e.g.) Rates of obesity and chronic diseases
Specific medical needs
addressed
Improvement in targeted medial need (e.g. no. of women fatalities in childbirth)
Worker safety improved Increased safety standards at
work/transport
e.g. no. road accidents, or accidents at work 20
How might we measure societal level shared value impact? (2 of 2)
Social Benefit Indicator Source Value
Environmental Improvement
Energy Efficiency Has energy efficiency improved? Energy usage data
Environmental
improvement
Have environmental conditions improved e.g. pollution levels
Water use Has there been a decrease in water use Water consumption data by industry
Contribution to Social Progress
Fulfilling Basic Needs Does it assist in fulling basic needs? Numbers of homeless?
Improving Wellbeing Does it contribute to improving wellbeing? e.g. Access to education (school
enrolment)
Creating Opportunities Does it contribute to creating opportunities for
the population? Are people happier?
Interviews
Contribution to Public Sector: Resources Saved & Policy Objectives Achieved
Public Resources Saved Does it directly save public funds? Public policy data
Public Resources Freed-up Does it free public resources? Public policy data
Public Policy Achieved Contribute to public policy objectives? Government initiatives based on this
approach
21
Are you Really Creating Shared
Value……..and where?
Marginal, Sustainable and Gamechanger
22
Are You Really Creating Shared Value?
Category Box
No Impact -
Marginal
Positive value to the company (cannot make a loss)
Positive value to addressing a social need
A platform for future opportunities (i.e. it is worth it but not for profit alone)
Sustainable
Identifiable and sustainable effective demand and is profitable
Sustainably addresses a social need in addition to previous best practice
Builds new resources, skills, competences or involve significant cluster collaboration
Gamechanger
(potential
disruptor)
Differentiates the company’s product / service differentiation for products and services
Has greater profitable returns that previous business?
Other companies buy / take on your product or service?
Can fundamentally change the way that a social need is addressed?
Can measurably improve people’s lives?
Have public authorities use your services to address social needs (e.g. UK government
now paying people to stay fit)
Does it have the potential to become the ‘new normal’?
23
Example: Discovery Limited (Health Insurance)
Short Term Incentives to Encourage People to Make Better Long Term Decisions
Firm Level Shared Value Impact
Intended shared Value Intended Impact on Social Need Marginal Sustainable Gamechanger
The Shared Value Intention To make people healthier
The Innovation / Business Model Short term incentives to change long term behaviour
The Target Market Niche population / Underserved population / key driver
Contribution to Competitive Advantage Indicator of Achievement ☺
New Needs, Products & Customers (L1) Innovation, new customers, delivery of social need ☺
Effective Demand (Customer value proposition) Proven demand and CVP ☺
Competitive advantage / niche Sustainability of niche ☺
Market Size potential Revenue & Profit Potential Local, national, international potential ☺
Innovation Impact Potential new way to deliver a social need? ☺
Virtuous Circle Effect Potential to be used in more than one market ☺
Value Chain Improvement (L2) Value added in value chain / supply chain ☺
Resource Building Resources, (manufacturing, distribution etc.) ☺
Competence & Skills Building New skills and competences ☺
Reputation Platform Reputation effect leads to more opportunities ☺
Cluster Development & Collaboration (L3) Thriving interactive clusters ☺
Local Economy Building? Increase in local suppliers, building skills locally ☺
Cluster & Institutional Collaboration Increased collaboration with institutions and cluster ☺
Spill-over Potential opportunities Spill-overs to other sectors ☺
24
Example: Discovery Limited (Health Insurance)
Short Term Incentives to Encourage People to Make Better Long Term Decisions
Societal Level Shared Value Impact
Intended shared Value Intended Impact on Social Need Marginal Sustainable Gamechanger
The Shared Value Intention To make people healthier
The Innovation / Business Model Short term incentives to change long term behaviour
The Target Market Niche population / Underserved population / key driver
Quality Economic Activity Local Economic Development to Benefit All ☺
ncreased Affordable Housing Increased stock of affordable homes ☺
mproved Worker safety standards Improved worker safety standards ☺
ncreased Sector Activity ☺ ☺
ncreased Economic Activity ☺ ☺
ncrease in Jobs for low-income citizens Increase in hobs for low-income citizens ☺
Demonstrable Flourishing Local Economy Numbers of people benefitting ☺
Human Capital Healthier, More Educated & Happier Population ☺
mproved Health Improved healthy population ☺
mproved Workforce Skills Increased skills in workforce ☺
mproved Education Increase in educated population ☺
mproved Wellbeing Safer, happier population + opportunities ☺
Environment More Sustainable Use of Natural Resources ☺
Environmental Improvement Measurable Improvement in the environment ☺
mproved Energy Efficiency More efficient use of energy or use of green energy ☺
More Efficient Water Use Measured Increase in Water Available ☺ 25
Source
(Case Study)
Intended Shared Value
(Social Need Addressed)
New Needs,
Products &
Customers
(Level 1)
Contribution to
Value Chain
Improvement
(Level 2)
Contribution to
Cluster
Development &
Collaboration
(Level 3)
Contribution to Social
Need
Rows = intended shared
value
Columns = Impact
Market
Size
Innovation
Impact
Revenue
&
Profit
Resource
Building
Competence
&
Skills
Building
Reputation
Platform
Local
Economy
Building
Cluster
&
Institutional
Collaboration
Spill-over
Potential
Quality
Economic
Activity
Education
Health
Wellbeing
Environment
Intercorp Services and products
Peru’s underserved
Local skills and local
economy development
Access platform to remote
areas
Discovery Making people healthier
Provide short term
incentives……
Reduce long term costs of
health insurance
Short term incentives for
long term benefit
Shared Value:
Contribution
to Private
Sector and
Public Sector
and Wellbeing
26
Gamechanger
(Blue)
Sustainable
(Dark green)
Marginal
(Light green)
Shared Value: Contribution to Private Sector and Social Needs
Source
(Case
Study)
Intended Shared Value
(Social Need Addressed)
New Needs, Products
& Customers
(Level 1)
Contribution to Value
Chain Improvement
(Level 2)
Contribution to Cluster
Development & Collaboration
(Level 3)
Contribution to Social Need
Rows = Intended Shared Value
Columns = Shared Value Impact
Market
Size
Profitability
Innovation
Impact
Reputation
Platform
Resource
Building
Competence
&
Skills
Building
Reputation
Platform
Local
Economy
Building
Cluster
&
Institutional
Collaboration
Spill-over
Potential
Quality
Economic
Activity
Education
&
Skills
Health
Social
Progress
Environment
Improvement
Intercorp
Services and products Peru’s underserved
Local skills and local economy development
Access platform to remote areas
Discovery
Making people healthier
Reduce long term costs of health insurance
Short term incentives for long term benefit
Walmart
Employment for the underserved
Environmental improvement in emission
Sustainable food supplies at low prices
Nestle
Health and wellbeing consumer products
Local economy for coffee suppliers
Move for consumers away from sugar
Dow
Canola Oil
Desalination
Adhesives for cars
Novartis
Education in healthy families in India
Access platform to remote access
Collaboration with health authority
CVS Health
Complements the health services (free-up)
Health service available close to consumers
Innovative health products for consumers
Beckton
Dickinson
Public health objectives facilitated
New products available for consumers
Access platform for remote areas of world
Yara Inter-
national.
Improved agricultural output in Tanzania
Infrastructure in Tanzania
Cluster collaboration in agriculture
ENEL
Switch to renewable resource electricity
Consumers meter readings digital (platform)
Incentives for consumers for solar power
27
Creating Shared Value Impact: What Makes a Shared Value Gamechanger?
Conclusion
• Measuring Shared Value is in its infancy
• No framework exists to assess the shared value for the company and society
• Measuring shared Value is an Iterative Process
• This is my attempt to provide a workable framework which can used by
business and business schools
• It has the added advantage that companies can assess easily where they are
adding shared value and can potentially re-direct resources for bigger shared
value impact
28
Thankyou everyone!!
Let me know what you think!
29
A Survey of Shared Value
Initiatives in Cambodia
Completed by CamEd Business School Students for their Assignment
(November 2020 and May 2021)
Based on the Framework
30
Creating Shared Value: What Makes a Shared-Value Gamechanger?
Research Work in Progress (Cambodia) The Questionnaire
What Questions did we ask:
• Company background
• Shared value intentions
• Did you plan to exploit unserved market (if so which)?
• Did you intend to address a social need
• Did you intend to replace a public service
• What is the impact of your shared value strategy?
31
Creating Shared Value in Cambodia
The draft Framework Methodology (First Draft)
Company Social Need
Intention
Company
Impact
Social Need
Impact
Public Policy
Impact
Wellbeing
Impact
Company 1 Social Need A 1 1 3 3
Social Need B 2 0 2 2
Social Need C 2 1 2 1
Company 2 Social Need A 3 1 1 3
Social Need B 3 2 0 2
Social Need C 4 2 0 0
Company 3 Social Need A 5 1 1 1
Social Need B 2 2 4 0
Social Need C 3 2 3 2
Company ‘n’ “
32
Creating Shared Value in Cambodia
Section 1
Survey respondents: background
33
Creating Shared Value in Cambodia
Survey Respondents: Industry Sector
(39 Responses)
34
Creating Shared
Value in Cambodia
Survey
Respondents:
Industry Sector
(39 Responses)
(1 of 2)
Sector No Examples include: (brief description)
Construction / Repair 4 Supplies for repairing roads (asphalt, road safety signs)
Producer of hollow and solid bricks
Construction materials
Auto repairs
Manufacturers
(including recycling)
4 Producer of Cotton and Paper Bags
Sells clean water to residents of region in Cambodia
Paper and packaging company with waste-paper
Environmentally friendly char-briquettes: recycled biomass
waste
Drinks and Food
Manufacture
Instant noodles
Sugar juice (food and drinks manufacturer)
Beer producer and retailer
Banking and Finance 5 E-banking, Banking and finance, Life assurance
Trade / Wholesale Import and export company
E-commerce platform connecting buyers and sellers
Sells refrigerator, air conditioners
Other Retail 2 Diamond jewellery retailer
Natural and ethical beauty brands 35
Creating Shared
Value in
Cambodia
Survey
Respondents:
Industry Sector
(39 Responses)
(2 of 2)
Sector No. Examples include: (brief description)
Coffee Shops and
Food Retail
7 Coffee franchise
Tea and coffee shops
Mobile food delivery
Restaurant
Serves drinks and food, snacks, and meeting rooms
Other Retail 2 Diamond jewellery retailer
Natural and ethical beauty brands
Travel (Regions) 2 Homestay living with local people in rice fields village
Travel information and reservations
Healthcare 2 Clinic and pharmacy for people in the neighbourhoods
Clinic providing healthcare
Education 2 Education institute
University
36
Creating Shared Value in Cambodia
Survey Respondents: Company Location
37
Creating Shared Value in Cambodia
Survey Respondents: Location of Customers
‘Other’: Total 22 Responses, of which:
5 Only one or two provinces in Cambodia
15 target customers in multiple regions of
Cambodia
1 exporter to China, 1 to Japan
1 exporter to Thailand, 1 to SE Asia
38
Creating Shared Value in Cambodia
Survey Respondents: Number of Employees
39
Creating Shared Value in Cambodia
Survey Respondents: Year Business Commenced
40
Creating Shared Value in Cambodia
Section 2
Survey Respondents: Shared Value Business
intentions & Targets
41
Creating Shared Value in Cambodia
survey Respondents: target customers
Responses include several who
target a range of incomes, and
some business-to-business
42
Creating Shared Value in Cambodia
Question: Are you Serving a new (underserved) market?
Several state that they are using new
approaches and creating new markets (e.g.):
• Supplying clean water in a rural area
• New kinds of drinks (e.g. bubble tea)
• New E-commerce platforms
43
Creating Shared Value in Cambodia
Question: Are you Creating and innovation,
or new way of serving customers?
The many examples include:
New packaging material
New noodles / food production / recipes
New digital products
New recreational styles / lifestyle
New financial services
New ways of ordering products
44
Creating Shared Value in Cambodia
Question: Is there a social need that you are
specifically looking to address?
45
Creating Shared Value in Cambodia
Question: Is there a social need that you are
specifically looking to address?
• “……health and wellbeing …….. life plan…….trying their best to make
it more and more accessible to people with lower level of wealth”
• “…… nutrition. It aims to provide healthy and fresh…… drink for people
who concerns about their health.”
• “……education, improvement in quality of life through development and
encouragement of house ownership and entrepreneurship.”
• “…….. The (cosmetics) shop satisfies safety needs for consumers,
while its production has positive impacts on environment, and job
availability for poor people”
46
Creating Shared Value in Cambodia
Question: Do you think your company will
benefit your local community?
47
Creating Shared Value in Cambodia
Question: Do you think you company will
benefit your local community?
Some open-ended comments from respondents
• “The company creates 182 job opportunities to the community.”
• “People will get more deeply understanding about illness and know
how to protect themselves and could also decrease spending on
unnecessarily medicines that could affect to them.”
• “The company recycles used road facilities so they reduce the waste
of product consumption.”
• “Since the shop is supporting the farmer and help with their training in growing vegetable. The
shop will also support the community by buying organic vegetable to use in their shop as
ingredient for the food.”
48
Creating Shared Value in Cambodia
Question: How do you see Market Profitability?
49
Creating Shared Value in Cambodia
Section 3
What is the Impact of Your Shared Value Approach?
50
Creating Shared Value in Cambodia
Question: Are you building competences and skills
for your business and workforce?
51
Creating Shared Value in Cambodia
Question: Are you building competences and skills
for your business and workforce?
Some open-ended comments from respondents
• “Soft skills / Communication skills / a service mindset”
• “Digital skills”
• “The type of new competences and skills that is not familiar for workers in
Cambodia. Because not many factories that used waste to produce the
cotton paper in Cambodia.”
• “sharing knowledge and consult to local people about the health care”
• “serving in the shop will help them improve their communication and barista
skills.”
• “Accounting and finance skills”
• “Service mindset, Technical skills”
• “Retail banking skills”
52
Creating Shared Value in Cambodia
Question: Do you consider that you are contributing
to a growing local economy?
53
Creating Shared Value in Cambodia
Question: Do you consider that you are contributing
to a growing local economy?
• “It is a long term business where the owner wants the village people
to grow together with the business.”
• “The company provides employment to local people.”
• “provide job opportunities”
• “result in pension, health care expenditures, education
expenditures.”
• “Culture awareness => Economy by foreign visitors, Increase
people’s working lives”
• “The local economy benefits from the factory is collecting tax and
contributing the total export in the country.”
54
Creating Shared Value in Cambodia
Question: Do you consider that your business is
freeing-up public sector resources in any way?
55
Creating Shared Value in Cambodia
Question: Do you consider that your business is
contributing to any of the following public policy objectives?
56
Creating Shared Value in Cambodia
What can we conclude and next steps?
• From the literature:
• Creating shared value has emerged from a multitude of sources
• Creating shared value sits along a spectrum with CSR and Philanthropy
• From measurement of shared value to date:
• Some very good work, but still no accepted framework for measuring shared value
• From our survey (we focus on impact, however this can be measured):
• Cambodia companies are creating shared value
• Shared value is a little indefinable, but you know when it is there
• Patterns emerge
• Next steps:
• Combine framework and survey data
• Measure non-monetary indicators too
• Build local case studies (using this as a template)
• Share surveys with creating shared value community
57
Creating Shared Value in Cambodia
Thank you MOC ASIAN CHAPTER!!
THANK YOU to CamEd STUDENTS!!
THANK YOU TO RESPONDENTS!
This survey has provided a wealth of information on the intentions of businesses to
create shared value and on the impact of the shared value being created.
A massive thankyou to everyone who has taken part in the survey.
We will provide a summary of the results as soon as we possibly can (during
November / December 2020)
58

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Creating Shared Value Impact Framework

  • 1. Creating Shared Value Impact: What Makes a Shared Value Gamechanger? Research Work in Progress at CamEd Business School, Phnom Penh, Cambodia Ken Charman CamEd Business School TCI / MOC Asian Chapter Conference: 02 July 2021 1
  • 2. The Motivation Why Study Shared Value Impact? Why look for Gamechangers? 2
  • 3. Creating Shared Value Impact: What Makes a Shared Value Gamechanger? What’s the Motivation? A personal view based on the Porter & Kramer (2011) Concept: • Business needs and societies’ needs must converge • Business (and microeconomics) is all about incentives • Shared value is distinct from other forms of social enterprise • it is the only one with absolute limitless incentives to make profits and address social needs • (so all incentives are in the same direction) 3
  • 4. Creating Shared Value Impact: What Makes a Gamechanger? What is Creating Shared Value? Creating Shared Value is: • Making a profit whilst simultaneously delivering a social need (Porter and Kramer 2011) Examples: • Access to basic products & services (e.g. a bank account, healthcare) in remote areas • More affordable healthcare (and health insurance) • Improved opportunities in the agricultural industry to retain the workforce • Improved opportunities for lower paid work (e.g. hotels and tourism) • Energy saving and improved environment (especially water) • New skills for the workforce (e.g. basic banking,, construction, logistics, plumbing) • Better access to energy, solar power, internet (e.g. ENEL) 4
  • 5. Creating Shared Value Impact: What Makes a Gamechanger? Why Should we Look for Shared Value Gamechangers? • Once in a while a business idea comes along for which there is: • A vision and an intention to improve the wellbeing of society • An innovation to address a social need • Effective demand (so there is no redistribution – the social need is met by the business) • Returns (profits) above the industry standard (due to the effective demand) • It changes the way that the industry sector works • It becomes the ‘new normal’ • This is a ‘shared value gamechanger’ 5
  • 6. Creating Shared Value Impact: What Makes a Gamechanger? Why Should we Look for Shared Value Gamechangers? Vision Intention Innovation To Address a Social Need Target Market (the underserved) CVP Effective Demand Potential Profit New Products and Services New resources New competences New Collaboration Marginal Initiatives Sustainable Practices Gamechanger Innovations Platform for Growth Further Innovation Serving the Underserved A New Normal 6 Strategy to Address a Social Need Target Market & Business Model Build Resources & Capabilities Impact for the Firm and for Society Result for the Firm and for Society Strategy to Deliver Shared Value Impact for the firm and for society depends on: The size of the market Serving Basic Needs Ability to Deliver Those Needs
  • 7. Creating Shared Value Impact: What Makes a Gamechanger? Developing a Framework to Assess the Impact of Shared Value My target is to develop a framework which can be used to measure the impact of shared value for the company, the sector, (the cluster) and the social needs It should be something companies can understand and use This is progress to date! 7
  • 8. The Literature A Review of the Literature on Creating Shared Value 8
  • 9. Creating Shared Value Impact: What Makes a Shared-Value Gamechanger? Guiding Light: Literature Review Dembek, K., Singh, P., & Bhakoo, V. (2016). Literature Review of Shared Value: A Theoretical Concept or a Management Buzzword? Journal of Business Ethics, 137(2), 231-267. Dembek et al (2016) • There is no consistent definition of shared value and no consistent measurement • (so it is difficult to distinguish shared value from any other form of socially oriented business) 9
  • 10. Creating Shared Value: What Makes a Shared-Value Gamechanger? Guiding Light: Literature Review • Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78-92. • Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62-77. Porter & Kramer (2011) • Level 1: CSV Products and services need a Customer Value Proposition (CVP): • Level 2: CSV in the value chain (building competences and resources, less waste) • Level 3: CSV Enabling cluster collaboration and development My view: it is the cluster (Level 3) which links the firm level and the societal level shared value 10
  • 11. Creating Shared Value: What Makes a Shared-Value Gamechanger? Guiding Light: Literature Review Kramer, M. R., & Pfitzer M.W., (2016). The Ecosystem of Shared Value. Harvard Business Review……. Kramer and Pfitzer (2016) • The ‘ecosystem’ is the way that private companies, NGOs, community members and governments all have a role to play and should work together to address the social problems which are so immense, under the concept of ‘Collective Impact’ • There are too many competitive free-riders 11
  • 12. The Research Problem There is No Framework to Measure the Impact of Shared Value There never was one! 12
  • 13. Creating Shared Value: What Makes a Shared-Value Gamechanger? Guiding Light: Literature Review Conclusion Main conclusions of the literature review by Dembek 2015) • No agreement on definition • No agreement on measures • No clear distinction between social enterprise and shared value and other forms of society friendly business I would add • No framework that makes a business friendly assessment • No framework that actually measures intention (a priori) and impact (ex post) Porter and Kramer (et al) have already identified the parameters to define and measure shared value We need to go back to Porter and Kramer’s original intentions to see if the original parameters of shared value can be used to create a useable framework to measure shared value 13
  • 15. Creating Shared Value: What Makes a Shared-Value Gamechanger? How do we build a Framework to assess shared value impact? Assess the components of shared value (Porter and Kramer 2011) 1) What is the intention to create shared value? 2) What might we expect to see (for the company and for society) if it is successful? 3) How might we measure progress (impact) 15
  • 16. Creating Shared Value: What Makes a Shared-Value Gamechanger? Firm Level Shared Value How can we measure shared value from the Company’s and Sector’s perspective? • Level 1: Products and Services • Market size and profitability (local economy, national, global) (marginal, sustainable, supernormal)? • Innovation impact (delivering a social need in a new way) • Reputation Platform (what further opportunities can result?) • Level 2: Value Chain • Cost and waste reduction • Resources building • Competences and skills building • Level 3: Cluster • Local economy building • Cluster and institutional collaboration (does it get more companies and institutions involved)? • Spillover potential (to other related sectors) 16
  • 17. How might we measure ‘firm level’ shared value impact? Private Sector Benefit Indicator Source Value Creating Shared Value (Level 1): New Needs, Products and Customers Market Size and Profitability No. Customers / people benefitting Sales data Innovation Impact A new way to deliver a social need? No similar products of services available Reputation Platform Does innovation create new opportunity New businesses spun-off as a result of the innovation Contribution to Value Chain Improvement (Level 2) Reducing Cost & Waste in the Value Chain Areas and quantities of savings (how much and where they occur) Company reports and accounts Building Value Chain Resources Resources created manufacturing / logistics New Infrastructure in value chain Building Skills and Competences New skills/competences, abilities New skills directly related to innovation Contribution to Cluster Development and Collaboration (Level 3) Cluster Building New cluster activity/suppliers/local economy New business activity / local skills Cluster & Institutional Collaboration New collaboration/institutional support? Interviews with cluster members Spill-over Potential Opportunities for related spill-overs? Interviews with cluster members 17
  • 18. How might we measure ‘societal’ shared value impact? Social Needs From CSV Concepts Presentation: From the Social Progress Index Energy Efficiency Basic Human Needs: Nutrition & Basic Medical Care Environmental Improvement Water and Sanitation Water Use Shelter Jobs for Low Paid Workers Personal Safety Economic Development Foundations of Wellbeing: Access to Basic Knowledge Affordable Housing Access to Information & Communications Workforce Skills Health and Wellness Health Environmental Quality Worker Safety Opportunity: Personal Rights Education Personal Freedom and Choice Inclusiveness Access to Advanced Education You may add other sources / areas (be creative) 18
  • 19. Creating Shared Value: What Makes a Gamechanger? Social Needs Impact How can we measure shared value from the Social Needs perspective? 1. Quality economic activity (including public policy impact) 2. Education and Workforce skills 3. Health and Safety 4. Social Progress (basic needs, wellbeing and opportunity) 5. Improving the Environment 19
  • 20. How might we measure ‘societal-level’ shared value impact? (1 of 2) Societal Benefit Indicator Source Value Quality Economic Activity Economic development Is there an increase in economic activity? Employment (especially for lower income) and output data Jobs for low-income citizens Have new sustainable jobs been created? Employment data, skills developed Flourishing Local Economy Local economic activity / Infrastructure Employment data / affordable infrastructure Education and Skills Education (school) Improved availability of affordable education Number and quality of schools (e.g. PISA) Education (adult, college, university) Improved take-up of college or university Enrolment at university / college Workforce skills Increased professional and vocational skills Numbers trained in vocational skills Health and Safety Health improvement of population Is there a general improvement in health (e.g.) Rates of obesity and chronic diseases Specific medical needs addressed Improvement in targeted medial need (e.g. no. of women fatalities in childbirth) Worker safety improved Increased safety standards at work/transport e.g. no. road accidents, or accidents at work 20
  • 21. How might we measure societal level shared value impact? (2 of 2) Social Benefit Indicator Source Value Environmental Improvement Energy Efficiency Has energy efficiency improved? Energy usage data Environmental improvement Have environmental conditions improved e.g. pollution levels Water use Has there been a decrease in water use Water consumption data by industry Contribution to Social Progress Fulfilling Basic Needs Does it assist in fulling basic needs? Numbers of homeless? Improving Wellbeing Does it contribute to improving wellbeing? e.g. Access to education (school enrolment) Creating Opportunities Does it contribute to creating opportunities for the population? Are people happier? Interviews Contribution to Public Sector: Resources Saved & Policy Objectives Achieved Public Resources Saved Does it directly save public funds? Public policy data Public Resources Freed-up Does it free public resources? Public policy data Public Policy Achieved Contribute to public policy objectives? Government initiatives based on this approach 21
  • 22. Are you Really Creating Shared Value……..and where? Marginal, Sustainable and Gamechanger 22
  • 23. Are You Really Creating Shared Value? Category Box No Impact - Marginal Positive value to the company (cannot make a loss) Positive value to addressing a social need A platform for future opportunities (i.e. it is worth it but not for profit alone) Sustainable Identifiable and sustainable effective demand and is profitable Sustainably addresses a social need in addition to previous best practice Builds new resources, skills, competences or involve significant cluster collaboration Gamechanger (potential disruptor) Differentiates the company’s product / service differentiation for products and services Has greater profitable returns that previous business? Other companies buy / take on your product or service? Can fundamentally change the way that a social need is addressed? Can measurably improve people’s lives? Have public authorities use your services to address social needs (e.g. UK government now paying people to stay fit) Does it have the potential to become the ‘new normal’? 23
  • 24. Example: Discovery Limited (Health Insurance) Short Term Incentives to Encourage People to Make Better Long Term Decisions Firm Level Shared Value Impact Intended shared Value Intended Impact on Social Need Marginal Sustainable Gamechanger The Shared Value Intention To make people healthier The Innovation / Business Model Short term incentives to change long term behaviour The Target Market Niche population / Underserved population / key driver Contribution to Competitive Advantage Indicator of Achievement ☺ New Needs, Products & Customers (L1) Innovation, new customers, delivery of social need ☺ Effective Demand (Customer value proposition) Proven demand and CVP ☺ Competitive advantage / niche Sustainability of niche ☺ Market Size potential Revenue & Profit Potential Local, national, international potential ☺ Innovation Impact Potential new way to deliver a social need? ☺ Virtuous Circle Effect Potential to be used in more than one market ☺ Value Chain Improvement (L2) Value added in value chain / supply chain ☺ Resource Building Resources, (manufacturing, distribution etc.) ☺ Competence & Skills Building New skills and competences ☺ Reputation Platform Reputation effect leads to more opportunities ☺ Cluster Development & Collaboration (L3) Thriving interactive clusters ☺ Local Economy Building? Increase in local suppliers, building skills locally ☺ Cluster & Institutional Collaboration Increased collaboration with institutions and cluster ☺ Spill-over Potential opportunities Spill-overs to other sectors ☺ 24
  • 25. Example: Discovery Limited (Health Insurance) Short Term Incentives to Encourage People to Make Better Long Term Decisions Societal Level Shared Value Impact Intended shared Value Intended Impact on Social Need Marginal Sustainable Gamechanger The Shared Value Intention To make people healthier The Innovation / Business Model Short term incentives to change long term behaviour The Target Market Niche population / Underserved population / key driver Quality Economic Activity Local Economic Development to Benefit All ☺ ncreased Affordable Housing Increased stock of affordable homes ☺ mproved Worker safety standards Improved worker safety standards ☺ ncreased Sector Activity ☺ ☺ ncreased Economic Activity ☺ ☺ ncrease in Jobs for low-income citizens Increase in hobs for low-income citizens ☺ Demonstrable Flourishing Local Economy Numbers of people benefitting ☺ Human Capital Healthier, More Educated & Happier Population ☺ mproved Health Improved healthy population ☺ mproved Workforce Skills Increased skills in workforce ☺ mproved Education Increase in educated population ☺ mproved Wellbeing Safer, happier population + opportunities ☺ Environment More Sustainable Use of Natural Resources ☺ Environmental Improvement Measurable Improvement in the environment ☺ mproved Energy Efficiency More efficient use of energy or use of green energy ☺ More Efficient Water Use Measured Increase in Water Available ☺ 25
  • 26. Source (Case Study) Intended Shared Value (Social Need Addressed) New Needs, Products & Customers (Level 1) Contribution to Value Chain Improvement (Level 2) Contribution to Cluster Development & Collaboration (Level 3) Contribution to Social Need Rows = intended shared value Columns = Impact Market Size Innovation Impact Revenue & Profit Resource Building Competence & Skills Building Reputation Platform Local Economy Building Cluster & Institutional Collaboration Spill-over Potential Quality Economic Activity Education Health Wellbeing Environment Intercorp Services and products Peru’s underserved Local skills and local economy development Access platform to remote areas Discovery Making people healthier Provide short term incentives…… Reduce long term costs of health insurance Short term incentives for long term benefit Shared Value: Contribution to Private Sector and Public Sector and Wellbeing 26 Gamechanger (Blue) Sustainable (Dark green) Marginal (Light green)
  • 27. Shared Value: Contribution to Private Sector and Social Needs Source (Case Study) Intended Shared Value (Social Need Addressed) New Needs, Products & Customers (Level 1) Contribution to Value Chain Improvement (Level 2) Contribution to Cluster Development & Collaboration (Level 3) Contribution to Social Need Rows = Intended Shared Value Columns = Shared Value Impact Market Size Profitability Innovation Impact Reputation Platform Resource Building Competence & Skills Building Reputation Platform Local Economy Building Cluster & Institutional Collaboration Spill-over Potential Quality Economic Activity Education & Skills Health Social Progress Environment Improvement Intercorp Services and products Peru’s underserved Local skills and local economy development Access platform to remote areas Discovery Making people healthier Reduce long term costs of health insurance Short term incentives for long term benefit Walmart Employment for the underserved Environmental improvement in emission Sustainable food supplies at low prices Nestle Health and wellbeing consumer products Local economy for coffee suppliers Move for consumers away from sugar Dow Canola Oil Desalination Adhesives for cars Novartis Education in healthy families in India Access platform to remote access Collaboration with health authority CVS Health Complements the health services (free-up) Health service available close to consumers Innovative health products for consumers Beckton Dickinson Public health objectives facilitated New products available for consumers Access platform for remote areas of world Yara Inter- national. Improved agricultural output in Tanzania Infrastructure in Tanzania Cluster collaboration in agriculture ENEL Switch to renewable resource electricity Consumers meter readings digital (platform) Incentives for consumers for solar power 27
  • 28. Creating Shared Value Impact: What Makes a Shared Value Gamechanger? Conclusion • Measuring Shared Value is in its infancy • No framework exists to assess the shared value for the company and society • Measuring shared Value is an Iterative Process • This is my attempt to provide a workable framework which can used by business and business schools • It has the added advantage that companies can assess easily where they are adding shared value and can potentially re-direct resources for bigger shared value impact 28
  • 29. Thankyou everyone!! Let me know what you think! 29
  • 30. A Survey of Shared Value Initiatives in Cambodia Completed by CamEd Business School Students for their Assignment (November 2020 and May 2021) Based on the Framework 30
  • 31. Creating Shared Value: What Makes a Shared-Value Gamechanger? Research Work in Progress (Cambodia) The Questionnaire What Questions did we ask: • Company background • Shared value intentions • Did you plan to exploit unserved market (if so which)? • Did you intend to address a social need • Did you intend to replace a public service • What is the impact of your shared value strategy? 31
  • 32. Creating Shared Value in Cambodia The draft Framework Methodology (First Draft) Company Social Need Intention Company Impact Social Need Impact Public Policy Impact Wellbeing Impact Company 1 Social Need A 1 1 3 3 Social Need B 2 0 2 2 Social Need C 2 1 2 1 Company 2 Social Need A 3 1 1 3 Social Need B 3 2 0 2 Social Need C 4 2 0 0 Company 3 Social Need A 5 1 1 1 Social Need B 2 2 4 0 Social Need C 3 2 3 2 Company ‘n’ “ 32
  • 33. Creating Shared Value in Cambodia Section 1 Survey respondents: background 33
  • 34. Creating Shared Value in Cambodia Survey Respondents: Industry Sector (39 Responses) 34
  • 35. Creating Shared Value in Cambodia Survey Respondents: Industry Sector (39 Responses) (1 of 2) Sector No Examples include: (brief description) Construction / Repair 4 Supplies for repairing roads (asphalt, road safety signs) Producer of hollow and solid bricks Construction materials Auto repairs Manufacturers (including recycling) 4 Producer of Cotton and Paper Bags Sells clean water to residents of region in Cambodia Paper and packaging company with waste-paper Environmentally friendly char-briquettes: recycled biomass waste Drinks and Food Manufacture Instant noodles Sugar juice (food and drinks manufacturer) Beer producer and retailer Banking and Finance 5 E-banking, Banking and finance, Life assurance Trade / Wholesale Import and export company E-commerce platform connecting buyers and sellers Sells refrigerator, air conditioners Other Retail 2 Diamond jewellery retailer Natural and ethical beauty brands 35
  • 36. Creating Shared Value in Cambodia Survey Respondents: Industry Sector (39 Responses) (2 of 2) Sector No. Examples include: (brief description) Coffee Shops and Food Retail 7 Coffee franchise Tea and coffee shops Mobile food delivery Restaurant Serves drinks and food, snacks, and meeting rooms Other Retail 2 Diamond jewellery retailer Natural and ethical beauty brands Travel (Regions) 2 Homestay living with local people in rice fields village Travel information and reservations Healthcare 2 Clinic and pharmacy for people in the neighbourhoods Clinic providing healthcare Education 2 Education institute University 36
  • 37. Creating Shared Value in Cambodia Survey Respondents: Company Location 37
  • 38. Creating Shared Value in Cambodia Survey Respondents: Location of Customers ‘Other’: Total 22 Responses, of which: 5 Only one or two provinces in Cambodia 15 target customers in multiple regions of Cambodia 1 exporter to China, 1 to Japan 1 exporter to Thailand, 1 to SE Asia 38
  • 39. Creating Shared Value in Cambodia Survey Respondents: Number of Employees 39
  • 40. Creating Shared Value in Cambodia Survey Respondents: Year Business Commenced 40
  • 41. Creating Shared Value in Cambodia Section 2 Survey Respondents: Shared Value Business intentions & Targets 41
  • 42. Creating Shared Value in Cambodia survey Respondents: target customers Responses include several who target a range of incomes, and some business-to-business 42
  • 43. Creating Shared Value in Cambodia Question: Are you Serving a new (underserved) market? Several state that they are using new approaches and creating new markets (e.g.): • Supplying clean water in a rural area • New kinds of drinks (e.g. bubble tea) • New E-commerce platforms 43
  • 44. Creating Shared Value in Cambodia Question: Are you Creating and innovation, or new way of serving customers? The many examples include: New packaging material New noodles / food production / recipes New digital products New recreational styles / lifestyle New financial services New ways of ordering products 44
  • 45. Creating Shared Value in Cambodia Question: Is there a social need that you are specifically looking to address? 45
  • 46. Creating Shared Value in Cambodia Question: Is there a social need that you are specifically looking to address? • “……health and wellbeing …….. life plan…….trying their best to make it more and more accessible to people with lower level of wealth” • “…… nutrition. It aims to provide healthy and fresh…… drink for people who concerns about their health.” • “……education, improvement in quality of life through development and encouragement of house ownership and entrepreneurship.” • “…….. The (cosmetics) shop satisfies safety needs for consumers, while its production has positive impacts on environment, and job availability for poor people” 46
  • 47. Creating Shared Value in Cambodia Question: Do you think your company will benefit your local community? 47
  • 48. Creating Shared Value in Cambodia Question: Do you think you company will benefit your local community? Some open-ended comments from respondents • “The company creates 182 job opportunities to the community.” • “People will get more deeply understanding about illness and know how to protect themselves and could also decrease spending on unnecessarily medicines that could affect to them.” • “The company recycles used road facilities so they reduce the waste of product consumption.” • “Since the shop is supporting the farmer and help with their training in growing vegetable. The shop will also support the community by buying organic vegetable to use in their shop as ingredient for the food.” 48
  • 49. Creating Shared Value in Cambodia Question: How do you see Market Profitability? 49
  • 50. Creating Shared Value in Cambodia Section 3 What is the Impact of Your Shared Value Approach? 50
  • 51. Creating Shared Value in Cambodia Question: Are you building competences and skills for your business and workforce? 51
  • 52. Creating Shared Value in Cambodia Question: Are you building competences and skills for your business and workforce? Some open-ended comments from respondents • “Soft skills / Communication skills / a service mindset” • “Digital skills” • “The type of new competences and skills that is not familiar for workers in Cambodia. Because not many factories that used waste to produce the cotton paper in Cambodia.” • “sharing knowledge and consult to local people about the health care” • “serving in the shop will help them improve their communication and barista skills.” • “Accounting and finance skills” • “Service mindset, Technical skills” • “Retail banking skills” 52
  • 53. Creating Shared Value in Cambodia Question: Do you consider that you are contributing to a growing local economy? 53
  • 54. Creating Shared Value in Cambodia Question: Do you consider that you are contributing to a growing local economy? • “It is a long term business where the owner wants the village people to grow together with the business.” • “The company provides employment to local people.” • “provide job opportunities” • “result in pension, health care expenditures, education expenditures.” • “Culture awareness => Economy by foreign visitors, Increase people’s working lives” • “The local economy benefits from the factory is collecting tax and contributing the total export in the country.” 54
  • 55. Creating Shared Value in Cambodia Question: Do you consider that your business is freeing-up public sector resources in any way? 55
  • 56. Creating Shared Value in Cambodia Question: Do you consider that your business is contributing to any of the following public policy objectives? 56
  • 57. Creating Shared Value in Cambodia What can we conclude and next steps? • From the literature: • Creating shared value has emerged from a multitude of sources • Creating shared value sits along a spectrum with CSR and Philanthropy • From measurement of shared value to date: • Some very good work, but still no accepted framework for measuring shared value • From our survey (we focus on impact, however this can be measured): • Cambodia companies are creating shared value • Shared value is a little indefinable, but you know when it is there • Patterns emerge • Next steps: • Combine framework and survey data • Measure non-monetary indicators too • Build local case studies (using this as a template) • Share surveys with creating shared value community 57
  • 58. Creating Shared Value in Cambodia Thank you MOC ASIAN CHAPTER!! THANK YOU to CamEd STUDENTS!! THANK YOU TO RESPONDENTS! This survey has provided a wealth of information on the intentions of businesses to create shared value and on the impact of the shared value being created. A massive thankyou to everyone who has taken part in the survey. We will provide a summary of the results as soon as we possibly can (during November / December 2020) 58