November 3, 2011

Creating Shared Value – Tips for Making the Case in Your Company

Several weeks ago, I had the opportunity to present as part of an FSG webinar entitled Creating Shared Value: Making the Case in Your Company.  As I mentioned yesterday, we have worked closely with FSG over the past year and a half to develop our CSR strategy.  During this time, FSG was developing the concept of Creating Shared Value (CSV).  Whether you see this as the next point along the continuum of CSR or a distinct, new idea is probably a conversation for another day, but regardless, I love the way Michael Porter and Mark Kramer, and the FSG team in general, have framed this concept, and I think it is absolutely the right way to think about CSR (or whatever you want to call it).  If you aren’t familiar with the concept of CSV, stop reading this post right now and read this instead.
The purpose of the webinar was to go beyond the “what” of CSV, to focus on the “how”.  Specifically, how to you make the case for CSV to your company, well outside the walls of the CSR department?  How do you build buy-in and embed this approach throughout your business units?  For years, as corporate philanthropy became strategic corporate philanthropy and then CSR, the group that works on social issues has had to become decreasingly siloed in order to succeed.  A well-run CSR department collaborates closely with other business units, addresses issues of importance to the rest of the company, and may have a matrixed org chart.  With CSV, though, active participation from other business units isn’t just about doing the job well – it’s about doing it at all.  CSV doesn’t happen within a department, it’s embedded in a company. That means that, in order to be successful, the CSR team simply must succeed in making the case for CSV to the rest of the company.  FSG put together this webinar to share insights from companies that have been making that effort; I thought it might be useful to share and flesh out the key points from my presentation here. 
Overall, there are two big things I think we’ve done since the beginning, which have been critical to what successes we’ve had in making the case.  One, we’ve focused on engaging senior leaders.  We engaged a wide range of senior executives (34 internal interviews) during the strategy development phase, and our CEO was the primary customer for our proposed strategy.  We sought to understand their strategies and needs, so that we could identify the key issues within their areas of responsibility that could benefit from a CSV approach.  We’ve worked with business unit heads to flesh out and implement the CSR pillars most aligned with their particular groups, with the goal of co-creating our activities.  Two, we treat our company’s executives as our clients.  We seek to build relationships, we lead with the fit between our work and theirs, and we strive to act as a service organization to other business units.
What does that mean in practice? Here’s my top-ten list for making the case for CSV:
1.     Appoint a high-ranking executive to lead your CSR group:  We have found it critical to develop close relationships with our business unit heads, so that we can be a trusted partner.  Having a CSR leader who is a peer to those executives has been so important in building those relationships.
2.     Invest time in making the case; it’s an iterative process:  We’ve had three CEOs (one left, we had an interim, now we have a permanent one) since we started this process, so for turnover reasons alone, you can’t assume your job is ever done in bringing leadership on board.  Furthermore, we’ve found that business unit heads are more or less engaged depending on what else is going on in their business, so you have to continually track their needs and objectives, understand how you can support that, and tell them. I think that selling the value of the CSV strategy, rather than just the value a CSV initiative, might be a good way to address this – if you buy into the principle, that won’t change as individual projects become more or less relevant.  However, it’s harder to get time on someone’s calendar to talk about a business strategy than it is to discuss a concrete initiative, so I haven’t yet figured out how to strike the right balance on this one.
3.     Work to understand deeply what your business units do and need: If you are going to help your colleagues to address social issues that could maximize or limit their business success, you have to really and truly understand what your colleagues do and what their problems are.  That sounds obvious, but it’s harder than it sounds.  We need a real general management skill set and we also need to be a continual student of our organization and our industry.  (If you have tactics for succeeding in this ongoing education, I would love to hear them.)
4.     Focus on what is important to your business units, not you:  If you work in a CSR group, you presumably care about your company’s social impact.  That’s integral to CSV, which seeks to address issues that are important to both society and the business.  However, that’s not what most business unit leaders are charged with doing.  They’re charged with addressing just the business unit side of that Venn diagram.  The social impact is nice, but not necessary.  That shouldn’t be a problem for you, though – if you’re really engaging in CSV, you are addressing an issue that is of core importance to your business.  The social impact is why your group is involved, but it probably isn’t why the company is involved.  As such, sell your business unit colleagues on the part that will help them to achieve their goals.  If you are picking the right issues, not selling your colleagues on the social impact won’t make the social impact any less powerful.  (I should note that this is a little different at my company – because we are an education company, we have the benefit of working with people who ARE charged with driving social impact, in our case educational achievement.  The fact that we have to focus on the piece of the puzzle that is most important to our business units remains, though.)
5.     Make your colleagues’ lives easier; consider focusing on under-resourced units:  We’ve found that business units that don’t have sufficient support in areas where we can add value, like R&D, marketing, relationship-development, and business development, are really eager to work with us, and they move straight to integrating us into their work.
6.     Be comfortable acting both strategically and tactically – both have their place:  We’ve generally found it easier to position ourselves as a partner through tactical initiatives, rather than strategic initiatives.  We can often make an introduction, or draw media attention to a business activity, and those are great, but they aren’t creating shared value.  That said, I think this is an appropriate interim stem for a company that is new to CSV.  These small, lower-impact activities are helping to position our group within the company, helping other  units understand who we are and how we can engage with them, and helping us to build the relationships we need to create shared value successfully.
7.     Tell the CSV story coherently, frequently, and throughout the company:  I think we’ve had the perspective that we’ll start telling our story when our strategy is fully in place, but celebrating success is key to building buy-in, to helping people understand what you are about, so I think it’s important to celebrate the small landmarks along the way.
8.     Focus on the good, not the perfect, to go after quick wins:  For the same reason, go after quick wins; find examples that you can celebrate in order to educate the company about CSV.
9.     Be clear that you are a change agent, not program manager, from the start:  This is a distinction that FSG draws in its report, sponsored by HP, "Creating Shared Value: A How-to Guide for the New Corporate (R)evolution", and it is one of the elements of CSV that I struggle with most.  With CSV, you aren’t carrying out CSR activities but are instead changing the way your company does business.  You aren’t developing projects that the CSR department will run on an ongoing basis – you’ll have done your job when they just become part of how the company does business.  But that also means that, when you identify an opportunity, you can’t just do it – you have to convince whole group of other people, with other objectives and ways of operating, to get onboard, and I think that’s really, really hard. 
10.     Develop a strong network within your company:  There’s obviously a common theme running throughout this post – to implement CSV, you must work through your colleagues throughout the company.  But unless you are very lucky, those colleagues probably aren’t seeking you out.  As such, you need to figure out which of your colleagues you can help the most, and you need relationships in place to be able to work with them.  You also need to understand the twists and turns that you company is facing and adapting to on an ongoing basis.  That means you need a strong network within your company, so you can figure out what is going on, who is doing what, and where you might fit in.
These tips are based on our challenges to date as much as on our successes – this isn’t easy work.  But I think Porter and Kramer are right about CSV – it does drive business success, it does drive social outcomes, and it is the right approach.  It just makes so much sense that I’m confident we’ll see more and more companies Creating Shared Value.

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