1. Section – C Group 10
Ankit Goel (13P124) Avijeet Rathore (13P134)
Dheeraj Maken (13P139) Nikhil Jain (13P152)
Raghavender Sridhar(13P157) Sohan Shetty(13P175)
Versha Mangla(13P179)

2. Idea in Brief
• Company leaders recognize that social problem
present constraints as well as opportunities
• But, companies still struggling to deliver both
social and business benefits
The Problem
• Firms are not guided by social mission and don’t
know how to research social problems
• CFOs lack experience in measuring and linking
social and business results
• Building a network of external shareholders can
be challenging
The Reason
• Firms need a tested framework to create
profitable social enterprise
• It consists of five mutually reinforcing elements
The Solution

3. The 5 Mutually Reinforcing Elements
Embedding a Social Purpose
Measuring Shared Value
Creating Optimal Innovation Structure
Defining the Social Need
Co-creating with External Stakeholders

4. 1.Embedding A Social Purpose
• Creating Shared Value entails
– channeling resources to develop
innovations that can solve social problems
– embedding a social mission in the corporate culture
– involving the social purpose in core processes like
strategic planning and budgeting
– re-emphasizing a firm’s founding social obligations
“ A leader can draw on a different legacy to direct the
organization towards a social purpose ”

5. Innovation, nature, people and
“Danone for All”
• Franck Riboud, the CEO of Danone, realized that the
company had drifted away from its origins as a
health food manufacturer
• Stakeholders were increasingly concerned about
nutrition
• In 2000, he sold off beer, meat and cheese units
• Refocused on other dairy products, water and
acquired baby food and medical nutrition businesses

6. 2. Defining the Social Need
• Firms need to understand the underlying
social conditions and how best to change them
• Conduct extensive research to:
– Develop a comprehensive view of the problem
– People affected and their numbers
– Barriers to progress
– Options for driving change
– Parties that can help
“ If a company does not devote time and resources in research
process to develop a deep understanding of a social problem, it
risks pursuing ineffective solutions”

7. Focus on Malnutrition
“Maggi Masala-ae-Magic”
• Maggi Masala-ae-Magic is a micronutrient-reinforced
spice product for low-income consumers in India priced
at Rs.3
• Researchers studied the most prevalant nutritional
deficiencies in India
• Found that 70% children under age of 3yrs and 57%
women suffered from anemia
• Spices – an optimal vehicle for hiding bad taste of crucial
micronutrients: iron, iodine and vitamin A
• In 3 yrs, Nestle sold 138 mn servings and reached to the
most remote & affected areas

8. 3. Measuring Shared Value
• No universal system to monitor the progress of social and
business benefits exists as of now
• Sustainability Accounting Standards Board
• Trying to create industry based standards
• Stakeholders could compare firm’s environmental and social
impact
• International Integrated Reporting Council
• Developing a common framework for submitting integrated
reports
• Covers financial, environmental, social and governance
performance

9. The 3-Step Process to Measure Shared Value
• Anticipate the degree of change in social condition that will drive
profits
• Strategy for achieving that change and getting investors
1. Estimate business & social value
• Validate the link b/w social & business initiatives
• See which approaches don’t work and refine the strategy
2. Establish intermediate measures and track progress
• Measure the ultimate benefits produced based on some
parameters
• Helps in expansion to new areas and justify additional investment
3. Assess the shared value produced

10. 4. Creating the Optimal Innovation Structure
• Riskiness of new projects can threaten a firm’s established business
• Firms have the following options:
• Integrate with a legacy business – core business should develop
and launch the initiative if
• Firm already has a clear social purpose
• Understands the targeted social problems
• Possesses competencies to solve them
• Can build a strong business case for the social enterprise
Finland’s Kemira is a diversified producer of chemicals with
expertise in water chemistry. It restructured its R&D deptt. and
forged alliances with other companies to pursue ideas for new
water treatment solutions. Proposals that got a go-ahead were
managed by Kemira’s core business functions

11. • Create a semi-autonomous unit – if a new social venture isn’t likely
to satisfy the company’s normal financial requirements i.e. it might
take very long to become profitable, it should be shielded from
established business.
– Novartis founded Arogya Parivar, to reach millions of poor people in
emerging markets who couldn’t afford or gain access to healthcare.
– It estimated that the profit margins would be lower than expected.
– So, Novartis placed it in its social business group which operates with seed
funding from corporates and has its own management team and processes.
• Obtain philanthropic or government support – useful when a
company sees an opportunity to address social needs but the path
to profitability isn’t clear.
Vodafone M-Pesa started in this way. Vodafone
obtained a grant from British govt. to cover initial R&D
costs. Once M-Pesa demonstrated its commercial
viability, local units of established business financed its
scale-up

12. • Finance external entrepreneurs – if the company lacks the
expertise to develop an in-depth understanding of and a cost
effective solution to a social problem of interest:
– fund independent entrepreneurs to tackle the challenge
– learn from their efforts and acquire their solutions
GE decided to tackle India’s high infant mortality, which
is due in part to the lack of incubators:
•R&D engineers spent months in reinventing and
reducing costs for the incubator – but still had to charge
$2000
•‘Embrace’, a social enterprise had created a $200
incubator that could keep a baby warm for 6 hrs
•GE partnered with Embrace to distribute the product in
India

13. 5. Co-Creating with External Stakeholders
• Deeply involving stakeholders in identifying all the dimensions
of a problem and designing & implementing solutions
• Enlist a wide range of stakeholders – may include
government, foundations, universities, NGOs and other
companies.
– Mars chocolates mobilized 2 dozen organizations in its work to
reform cocoa farming in Ivory Coast
– Hired expert staffer from World bank to
lead the initiative
– Secured expertise of World Agroforestry
Centre to deliver innovations to farmers

14. • Leverage others’ capabilities – sometimes companies have to
partner with other enterprises for enhancing their delivery
capabilities.
– Nestle engaged Drishtee Foundation which had already
established a distribution system for supplying remote retail
shops in Uttar Pradesh to help distribute its Masala-ae-Magic
spices
– Novartis did not consider financing as its core competency
decided to partner with a local microfinance enterprise to fund
its Arogya Parivar unit.

15. Conclusion
To create social and business value all 5 ingredients are essential
as they reinforce one another
• Social purpose helps the firm to identify the need it wants to
address
• As company understands social problem more thoroughly,
employees’ commitment to its social purpose will increase
• A deeply held social purpose is also important for co-creation and
forms a basis for trusted relationships
• Understanding region specific needs helps define what can be
improved and by how much
• Degree to which potential shared value can be anticipated and
aligned with company’s finances determines the optimal
innovation structure for the venture
• Requirements for delivering both business and social value, in
turn, establish which capabilities are needed from new hires or
partners

16. Who’s Creating Shared Value
Removed 600 mn tons of trans fats and saturated fats
from the U.S. diet and created a major business with
its Nexera sunflower & canola seeds
Helped millions of malnourished families in India and
other countries by providing
inexpensive, micronutrient-reinforced spices.
Provided essential medicines & health
services to 42 mn people in 33,000 rural
villages in India.
In order to avoid cocoa shortage in Ivory Coast, it
catalyzed a cross-sector coalition to transform
farms & surrounding communities.

17. Who’s Creating Shared Value
Trained more than 10 mn teachers in the use of
technology to improve educational outcomes.
Extended mobile banking services to 14 mn people in
East Africa through M-Pesa.
Protected millions of health workers by
creating needleless injection systems – now a
$2 billion business for BD.