“Corporate Social Responsibility is really about reducing the harm that a company causes through its operations or its product. So, being sure there isn’t child labor. Being sure the product isn’t bad for you. Being sure you have fair wages, so on, as well as reducing your environmental footprint. But it involves many, many different activities and it’s really about reducing harm.
Shared value is about creating positive impact in the world, outside of your company, and is typically focused on just one or a couple issues that are the really critical issues in your industry and in your company.”
– from today’s Purpose and Profit episode Mark Kramer On How Creating Shared Value Can Transform Business and the World
Professor Mark Kramer teaches and advises on “shared value”, so it’s no surprise that he can explain what exactly “shared value” means through great examples from the companies creating it. One such example is an incentives program offered by the South African insurance firm Discovery.
Discovery’s purpose is to “make people healthier and enhance and protect their lives”.
The company’s Vitality program combines behavior economics and clinical science to encourage and reward its members to make healthy life choices. Members enjoy price breaks on everything from fresh vegetables to gym memberships. Discovery also gives members an Apple Watch—theirs to keep, so long as they keep up with their recorded health goals. Not only that, hitting exercise marks also earns members free coffee and smoothies at popular retailers.
Participants in the program enjoy better health outcomes along with their free smoothies, which means that Discovery incurs lower medical costs. It’s a win-win, and that is “shared value” in a nutshell.