Doing business in a way that benefits everyone

First published by ISS Today

The blind spot of capitalist business practice is the belief that business is all about profit, regardless of its effect on the environment or health and welfare of those affected along the supply chain.

This is the view of Harvard University School of Business’ Professor Michael Porter and Mark Kramer, managing director of social impact advisory firm FSG. They believe that blindly prioritising profit has underpinned a global loss of trust in business.

They punt the concept of “shared value” – that the way business is done can benefit both the bottom line and society. This idea has caught on, and shared value summits are being held worldwide, with a second South African summit having been held in May. Among other things, it looked at how businesses could help countries meet the United Nations’ Sustainable Development Goals.

South Africa could use the same concept to promote activities and programmes that change the harmful norms that enable gender-based violence, or to support positive parenting, thus helping to reduce violence and increase safety.

But, as Porter and Kramer have pointed out, business, governments and civil society are a long way from understanding exactly how the alignment between social and business needs can be put into operation. Shared value is still being viewed too narrowly, and is too directly linked to supply chain management and market development.

A broader, deeper interpretation of the concept requires the inclusion of people with a greater diversity of knowledge, experience and expertise from various sectors taking part in the discussions. Business cannot do it alone.

There are partnerships that are pushing the envelope and opening the way for new thinking about how to create shared value. One example is the collaboration between South Africa Partners (a United States based non-profit organisation promoting productive US-SA exchanges in health and education), Innovation Edge, and a leading South African supermarket chain.

South Africa Partners was inspired by the findings of research conducted by Temple University in Philadelphia in the US. The researchers set out to turn grocery shopping into learning experiences for small children.

They drew on research showing that children from low-income homes learnt fewer words from their caregivers than children from more well-off homes. Vocabulary acquisition is important for stimulating brain development, and it helps children prepare for school.

The Temple researchers found that by just adding signs, such as one in the milk aisle that said: “I come from a cow. Can you find something else that comes from a cow?”, lower-income parents started having three times more conversations and positive interactions with their children who had come shopping with them. (There were fewer, if any, gains for middle and upper-income children whose parents were already engaging with them.)

South Africa Partners adapted and tested the idea in a supermarket for low-income shoppers in the Eastern Cape in South Africa. South Africa Partners education programme director Carol Cashion told ISS Today that parents had not only more conversations, but fewer arguments, with their children.

Lower-income South African parents do take their children with them to the shops – a focus group held by South Africa Partners revealed that they do this to spend more time together – but often these trips just add to parents’ stress, erupting into arguments over sweets.

Stimulating positive, brain-building, learning interactions between children and their caregivers through well designed and carefully thought out signage can turn these interactions around.

The research also showed that parents from low-income groups don’t think of themselves as their children’s first teachers – they don’t know that talking to young children about what they see, experience and read around them in everyday settings is essential brain food.

So there is clear value to be gained, for children and society, from using this relatively simple and cheap method to turn supermarkets into classrooms – but where is the value for business?

Cashion says the signage “makes for a better shopping experience; happy customers are loyal customers; loyal customers buy more and shop for longer. And children play a big role in how and where their adults shop, so if a child enjoys going to the shop that displays these signs, adult customers will follow”.

This is only one of many ways in which shared value can be re-imagined to address serious social problems. It can also be used to help prevent gender-based violence, and through positive parenting – to reduce violence and improve safety in general.

To realise real shared value, partnerships between sectors are key. South Africa Partners was aware of the research and how to use it to inform a practical solution. With seed funding from Innovation Edge, they were able to adapt and test the idea.

Having shown that it could work in South Africa, South Africa Partners is offering this new shared value opportunity to a major retailer in the hope that it will invest big and reap the rewards.

But the partnership cannot end there. What’s also important is to know what kinds of questions to ask on the signs, where to place the signs, and how to evaluate impact. This is not something that shop managers or their staff, or even advertising agencies, can be expected to know without information about child development and early childhood education. This is specialist knowledge.

To work effectively, this cannot be seen as a short-term marketing campaign. It must be part of a long-term re-visioning of how a retailer can deliver value to its customers in a way not previously imagined.

Working collaboratively can make this happen. Partnerships must be built across sectors to give real substance to the vision of shared value, and to bring about positive social change.DM

This article was first published by Africa up Close, a blog of the Wilson Centre

Chandré Gould is a Senior Research Fellow, Justice and Violence Prevention Programme, ISS Pretoria