In a recent blog on transforming social stakes into business opportunities, Borealis provides an interesting overview of some of the opportunities and challenges for creating shared value in extractives- which echoes Michael Porter’s recent keynote speech at the NextGen Forum in Calgary. Moving from corporate social responsibility to creating shared value is also gaining increased attention in industry gatherings such as Mining Indaba. Although some corporations have long developed innovative approaches to broadening their impact in society, shared value creation is still not mainstream and rigorous evidence of what works in different contexts is largely lacking. We have identified four challenges for scaling shared value in extractives:
1. Lack of leadership: Commitment from senior management is critical to mainstream shared value into businesses’ DNA. This approach needs to go beyond the risk management paradigm.
2. Develop cross-functional shared value teams: many companies are missing out on significant shared value opportunities because teams are siloed and do not have the incentives and capabilities to work together to innovate and identify opportunities for shared value. For instance community relations staff and supply chain personnel are not systematically working together to identify how they may create new programs to enhance local jobs and procurement opportunities. More proactive information management systems such as Borealis provide an important tool to measure, manage and address information problems within companies. Using data to drive change and innovation within corporations remains a challenge.
3. Impact evaluation: The Financial Valuation Tool from the IFC and other frameworks provide great resources to build the business case for shared value initiatives. Yet more efforts are needed to try and gather real-time data and performance indicators that can be used to iterate and refine interventions. We also need to try and develop more solid monitoring and evaluation frameworks that get around self selection bias that limit our ability to understand what actually works and may be replicated in other settings.
4. A corollary to the last point is the challenge of scale: the Shared Value Initiative released a good report on measuring results . The challenge of replicating programs to scale up impact appears as one of the lesson from the different examples the report presents. The converse risk is to create rigid frameworks for enhancing shared value that do not consider local conditions (e.g. availability of skilled workers, qualified suppliers) that need more structural investment to improve.
Ulula is trying to develop locally rooted and scalable shared-value approaches. We use simple mobile technology and human centered design approaches to enable local stakeholders (business, government, communities) to formulate their needs and capabilities. This creates a framework with realistic and measurable goals for shared value. We provide ICT solutions to respond to these demands by creating local job market place, mobile-enabled supplier maps and information centers. We are investing to merge engagement and payment platforms (i.e. mobile money tools) to reduce transaction costs, enable supplier syndication and reduce fiduciary risks. The data driven nature of the ICT solutions we offer are particularly well suited for measuring results.
Antoine Heuty
Antoine Heuty is the founder of Ulula. He is an experienced development practitioner with a long track-record designing and delivering policy reforms and working for social good with business, civil society and government in over twenty countries.