Catalytic Thinking

Share this (or; How Business Should Renetwork)


How moving from shared values to Shared Value could create a new business landscape.

The kick off for this post is an article from the Harvard Business Review, entitled The Big Idea: Creating Shared Value. This should be on everyone’s reading list for 1 January 2011 but, to précis in the author’s own words:

The concept of shared value can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared Value creation focuses on identifying and expanding the connections between societal and economic progress.

An example from the article would be Nespresso helping its suppliers to increase crop yield: good for the company because they get more beans, good for the farmers because they become more efficient, earn more per acre and can make more money. And because the farmers can make more money, they can spend more money, rippling the effect out into the community. And because Nespresso gets more beans, they can sell more product and make more money…

It’s a virtuous circle. It’s the only sensible way to do business. But I want to take it further.

I want to take shared values – the glue that helps to bind communities – and examine how they can be turned into Shared Value in the corporate sphere.

Let me begin with a definition: communities.

For the purposes of this post, I’m going to take ‘community’ to mean anything from a legion of Twitter followers to the local branch of the Women’s Institute.

The defining feature of any ‘community’ as far as I’m concerned is that it’s held together by shared values – be they historical, geographical, political or any other -ical that you want to mention.

So when a consumer Follows you on Twitter, or becomes a Facebook Friend/Fan, they are in fact demonstrating their shared values with you. (Or when they subscribe to your snail-mail newsletter, come to your open evenings… You get the idea)

(While ‘The Big Idea’ seems to discuss society (community for the purpose of this post) at a geographical level, I believe that it’s too narrow a definition. In a hyper-networked world, we’ve got to consider the global nature of our shared value communities.)

Individuals who share values turn into a community

Over time, as more individuals come together around a set of shared (common) values, community forms. The individuals begin talking to each other, allowing business to become a part of the conversation, rather than being in the driving seat. The growth can then be organic as the community matures.

Communities create Shared Value

Shared Value, according to (authors) is the process by which enhancements in a community also enhance the business prospects of the company within that community.

Following the example used above, we now have a situation where a community built around shared values becomes self-sustaining. This in itself could be an example of Shared Value – the community generates awareness for the parent company (hence increasing propensity to purchase) but provides the community members with help, support, advice, guidance etc. Both the community and the parent company therefore benefit (IndyMoms is a good example – the Moms benefit through sharing advice, the parent company benefits by selling advertising).

Creating Shared Value – a practical approach

It is perhaps a little naive to expect a community to form, become self-sustaining and generate Shared Value all by itself – the process can take years (not to mention various technical hurdles that will need to be overcome).

So how can a company create Shared Value? One response would be to look at its portfolio and product sectors, analysing where it can create cross-company value which not only enhances the value-sharing community but also provides the business with growth streams.

If I use a local example: The Co-Operative Group which owns food outlets, travel agents, funeral care and banks.

Imagine if the Co-Operative offered a free Italian language lesson to all of its followers (virtual and real – all of whom share values) when they buy an own-brand pizza. Not only would it be upskilling its follower-base, but it would be also lowering the barriers to holiday adventure (I think most people won’t visit a country where they can’t even ask for the nearest hotel confidently).

And it wouldn’t need to cost a lot. The lesson could be on MP3 download, redeemable via a till receipt code. Costs of distribution would therefore be marginal. And, if the business really wanted to knock a few socks off, it could link the lesson download to all local language schools in the consumer’s area – creating real Shared Value in the (geographical) community; if a person enjoys their free lesson and has easy access to where they can continue their learnings, they may sign up for a paid course with a local school, injecting extra money into the local community economy.

So the community learns a new language and the business can sell more of its travel packages because the individuals aren’t so worried about travelling somewhere where they don’t speak the language much. Everyone’s a winner…

I admit that this is a fairly crude example of an eloquent concept, but it should illustrate the point nicely.

This isn’t cross-selling or Corporate Social Responsibility – this is something extra.

If business can work out how to create Shared Value in a value-sharing community, then it’s entirely possibly that a new business model will emerge, placing community at the heart of business strategy.

Given that employees are not only part of the the company’s community but the wider virtual and real communities as well, this could have profound reach and benefit – even away from the company’s core area of business.

Thus what we need to consider is a renetworking of business. It’s not going to be enough to have strong online networks or local advocacy groups in this renetworked future: business is going to need to create community cognitive networks as well, relying on the group mentality to generate and share value throughout its membership base.

What a challenge. What an opportunity. And what a reboot for the marketing profession as well…

Renetworked business creating Shared Value within shared-value communities.

Doesn’t that sound like a future you want to be a part of?

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6 thoughts on “Share this (or; How Business Should Renetwork)

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  2. Pingback: Community Network Marketing – making the global hyperlocal « interacter

  3. Love this, Neil!

    Wouldn’t it be great if more of us as individuals or even more entire societies started to think like this? What a better world it would be — for you, for me, for them… for US ALL!

    I have learned first hand the power of community and especially in the past year, all that online communities can do through the benefits of amplification. Thanks for getting the happy wheels spinning!

    Paul

    • Hey Paul

      Glad that you like it! Thanks for sharing it on as well, much appreciated!

      I truly believe that added value is where brands will be getting a lot of traction in the future.

      Let’s see how it develops!
      Neil

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  5. Pingback: “Have you tried…” isn’t good enough. We need smarter cross-category selling « interacter

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