Connecting values to create shared value

Creating shared value connects the intrinsic drivers of a firm to apparent social needs that must be met. Entrepreneurial skills are used to address widespread social needs by using the perfected competencies of a firm. Applying protocols that produce defined products or services can also be used to serve an unmet social need. The ability of a firm to scale up will provide the impact that will make a real difference. But how do you arrive at such an outcome?
The pivotal action to create shared value is to recognise and connect different values that are driving the various stakeholders. This may sound a little cryptic, but the crucial notion here is the difference between 'value' and 'values'. Creating shared value (singular) is about using the skills and competencies of firms to create value while at the same time meeting an unmet social need. Connecting values (plural) is the process of using different value orientations of stakeholder groups as design criteria to innovate business models. In my experience you need both to create a success.

An example from the Dutch innovation program TransForum may illustrate this. In the agricultural sector there is a lot of discussion about the tension between efficient food production and animal welfare. A case in point is the production of eggs. Hens are put under optimal conditions in large stables to lay these eggs. But thousands and thousands of chickens in a cramp space is a sight that consumers do not really appreciate. By combining the values of animal protectionists, farmers and technical companies that provide the stables and machinery, a set of design criteria emerged that led to the birth of a completely new system.

In this so-called Rondeel (in English: Roundel) the hens are housed in an animal friendly circular henhouse, the farmer earns an above average income, the retailer has a unique offering to its clients, and the consumer can buy eggs that he knows are stemming from happy hens. For this outcome the whole supply chain needed to be redesigned, using the criteria derived from the values of all stakeholder groups involved. The result was something that nobody could have developed in isolation.

The shared value creation in this case builds heavily on the collaboration between 'unlikely allies'. Both animal welfare activists and henhouse operators have 'animal well-being' in their value set. But the outcome of the current operational systems did not benefit both value sets. A complete re-design of the supply chain was needed to arrive at an end results that created value (in a business sense) and connected the values of the different stakeholder groups.

So, start by identifying the different values that are at stake. Then translate these values into design criteria for a new business model that can create shared value. It all seems very obvious. But in real life connecting values is probably one of the most daunting tasks. By showing the perspective of creating shared value, connecting values might become easier.