15 Feb Turning troubles into triumphs
What is Creating Shared Value (CSV)? A Buzzword? The evolution of CSR? A tool for greenwashing corporate failings? According to the fathers of the concept, Michael Porter and Mark Kramer, “…Shared Value is not social responsibility, philanthropy, or sustainability, but a new way to achieve economic success”.
My perspective on CSV is largely shaped by my time at Discovery, a Johannesburg-listed insurer founded just over 20 years ago and today recognized as one of the gold standards for CSV. They understood that there was business opportunity in South Africa’s converging health challenges – the rising quadruple burden of disease and an insufficient number of doctors.
Discovery birthed Vitality, an incentive-based wellness programme (akin to air miles for health) that lowers healthcare costs and improves profit margins for insurers, at the same time improving the health status and life expectancy for policy holders. Many of the world’s leading insurers have since partnered with Discovery, all clamoring to infuse the Vitality “secret sauce” into their business model.
Necessity is the mother of invention and developing markets should play an outsized role as incubators for global corporate and social innovation. I reflected on this truth at the SharingValueAsia Summit in Singapore last week, attended by 200 fellow CSV enthusiasts.
Asia’s economic dynamism is beyond dispute. However, the region faces complex social issues. From rising income inequality to sustainable access to clean water – these challenges hold commercial opportunity for the private sector to harness their resources and capabilities.
Take road deaths, for example. Thailand has the second highest rate of road fatalities per 100,000 people. The combined number of road deaths per year in China, India and Indonesia is north of 500,000. It is a human tragedy, a significant drain on the public purse, but it also presents a business opportunity for the private sector in Asia. In Africa innovators are profiting by incentivising drivers to not text while driving, to drive less over weekends and the likes of Uber have grown exponentially by addressing a need unmet by public transportation systems.
Progressive business leaders like Unilever’s Paul Polman have led the charge in aligning their business strategy to address the Global Goals and society’s most pressing needs. Throughout Asia, multinationals like Visa, GSK and Coca-Cola are growing profits and market share through astute CSV strategies. Increasingly so too are Asian companies such as Korean conglomerate CJ Corporation.
Where there is significant societal need, there is significant business opportunity. Tomorrow’s winning companies understand this supply/demand dynamic and are steering ahead of the curve in re-imagining their products and services for greater good.