Maximise Impact: Embrace Shared Value Now
Dear CEOs and brand owners,
Those who matter most to your future business success are re-evaluating how they feel about your brand. How well do you align with their evolving values? Are you still relevant to them? Are you still worth a premium, and what does doing business with you say about them as individuals?
These questions are fundamental for businesses and CEOs globally as the sands shift beneath our collective feet. Stakeholders and consumers are reconsidering their relationships with brands. They no longer engage with those who do not share their changing priorities.
So, Why Is This and What Has Changed?
Everything. To begin with, Milton Friedman, Paul Samuelson, Robert Solow, and the rest of their ilk were wrong. The role of an organisation is not solely to maximise shareholder value and achieve growth at all costs. Unfortunately, the damage that philosophy has imposed on society and our environment is already well-established.
The idea of Stakeholder Capitalism is regaining momentum as a superior business philosophy that goes beyond the outdated “growth at any cost” mentality. Today, businesses recognise that the environment and society are critical stakeholders in the value-creation process.
Business leaders must shift their mindset to take a holistic view of their businesses’ impact on the economy, people, and the environment. We must innovate to solve problems while also providing great products and services. Brands that view themselves as part of a larger ecosystem can build equity by offering fresh and memorable experiences that improve the lives of everyone they touch, even in the smallest of ways.
The New Mindset: Shared Value Creation
It is critical that we push and challenge ourselves today in ways we have never done before. That is the opportunity in front of all of us.
We are living in a moment in time where climate-related environmental and social challenges are coming into focus at the same time globally. The realisation that our fates are all interconnected, reinforced by the global COVID crisis, has created an awareness and energy that we must not squander.
To remain relevant and stand out, leaders must weave comprehensive sustainability strategies into their businesses and do more than make a ‘Net Zero’ commitment. It is essential to uncover distinctive shared value propositions that emerge at the crossroads of urgent social and environmental concerns and their own strategic goals. By recognising these synergies, businesses can transform challenges into opportunities for innovation, cultivating shared value for all stakeholders.
This new mindset understands that to succeed, we must drive shared value by enhancing business competitiveness while meeting societal and environmental needs. This requires a clear corporate purpose that embraces sustainability and firm commitments towards regenerative practices that restore our ecosystems and address social inequalities. We need to do all of this together, and we need to do it right now.
Find the Right Partner for Your Business
A study by the Harvard Business Review revealed that businesses that adopted stakeholder-oriented practices outperformed their peers by up to 3.8%. Other studies have found that over 20% of companies realised modest or significant value gains from sustainability in the past five years. This suggests that sustainability benefits society and the environment, positively impacting financial performance.
Businesses must ensure that they create value beyond profits—for their customers, the environment, and society at large—before these customers switch to competitors who do.
These are hard questions to answer for CEOs with already so much on their minds. Those of you seeking counsel deserve advisors who understand these complexities. You need advisors who can turn these challenges into sources of opportunity and value creation.
Your future customers and employees want to be associated with enlightened brands that drive shared value for the business, society, and environment. They all share this same sense of urgency and a strong desire to be empowered to effect positive change in their personal and professional lives.
Businesses that rise to this challenge will remain relevant and resilient and thrive well into the future, creating a better world for all. Everyone will be better off for it.
At SR, we assist CEOs and their teams in building brands that drive shared value for business, society, and the environment. Let’s talk.