By: David Laurel | Independent Consultant Affiliate at Shared Value Initiative | March 4th, 2015

Are there partners or members who may have experiences in converting an existing CSR programme into a CSV operation? It would be nice to share these experiences. Is the transition or "upgrade" possible? Advisable? Thank you.

Regards,

David

PS. Would appreciate inputs on ongoing transitions.

 

Comments

Lara Muller's picture

Hi David,

Thank you for starting this discussion, as I think this is a fundamental issue when it comes to advancing CSV in practice. Most companies are still managing an array of well intended CSR programs, but to turn these into CSV requires a totally different mindset and approach in my opinion. This is no easy task.

I know we tried at our company to do so. I work for a listed pan-European retail real estate investor as Head of CSR and was eager to introduce the concept of CSV into the company after reading the HBR article in 2011. To cut a long story short, together with our colleagues from the Research&Concepts HQ department we designed an entirely new business model for a climate neutral shop with an innovative earning model. This project was not very succesful. Let me tell you why, as I hope to share worst practice and have others learn from our mistakes. It's allways easy to talk about success, but you learn from failure.

For several years, our CSR department was putting enormous effort in developing programs to have our business people manage the shopping centres in a more responsible way. Conserving enery and water, producing less waste and less carbon emissions... Well, the usual environmental programs. Business people were asked to implement these programs alongside their day-to-day work. You can imagine their enthusiasm. Sure, there were a few CSR-champions in every business unit who got the message and were very engaged with our efforts, mostly as a result of their personnal conviction and values, which is fantastic. But to really move the needle you need more. Much more. You need engagement from the entire company, including the commercial side and P&L responsible management. CSV was (and is) our answer. At the time, however, we did not realise like we do now, how fundamentally different CSV is from CSR. CSR can be catalytic for CSV, but it's an entirely new ballgame.

Back to the story. We developed an innovative business model for a totally recyclable, deconstructable store together with business partners in lighting, heating and cooling, floors and wall decoration; a coalition of the willing. We called in the Plug&Play store. After developing the model, we tried to convince the business to adopt the concept and start experimenting with it. We thought we had everything in place, the idea was great, it was innovative and created oportunities for new earning models.

Well, back to reality. We did not manage to generate buy-in from the business, the idea remained a paper exercise and the concept was never put into practice. What did we learn from all this?

1. An idea is great, but you need a business case. Not only a business model! CSV is as much about the financial revenues as it is about social (&environmental) impact. A below internal rate of return is just not good enaugh. You will need to re-evaluate everything about the program. The objective is to bring the idea to scale to have impact.

2. Involve the business right from the start. CSV programs should not be a headquarter staff hobby. An investment proposal that comes from a business unit general manager is far more powerful than a proposal from the CSR department. Involve R&D. CSV is about innovation! If they're not on board, there's a reason for it. Understand why!

3. If you are turning an existing CSR program into CSV, be ready to question everything about the program and let go of your personnal conviction. The differences are fundamental. Be ready to be brutally honnest with yourself. Most CSR programs are just not going to generate enaugh revenue to qualify, which is logical as the premiss is totaly different. CSR is about responsibility, in the end. The two can reinforce eachtother, but are apples and pears. Be very clear about the differences.

4. We stayed in the idea / pilot phase for too long and did not think the strategy and value chain implications through well enaugh. How about funding? Logistics? Channels? Purchasing? Marketing?

We learned tremendously by experimenting, failing and starting all over again. Every CSV idea is a start-up and you really need that mentality to get things going. Don't try to turn the old into the new. CSV is really about innovation, that's what so great about it. Rethink it alltogether is my advice. No guts, no glory. Good luck!

Best wishes,

Lara

 

David Laurel's picture

     Hi Lara, thank you so much for sharing your experience in transitioning from CSR to CSV.  Everything you stated is valid and touches a familiar chord in my own experiences as a CSV pracititioner in my former company. These issues are also echoed in Robert Lucas' and Raysa Paredes' accounts.  Before getting into a short discussion, please let me thanks Meghan for making this discussion more visible.  Second, it is important for the CSV "cause"  that practitioners like you bring to the fore the dynamics of CSV implementation.  Thank you so much for your invaluable posts that  I am sure SVI members who are thinking of  implementing a shared value program will appreciate.  The realities do have challenges but they can be overcome, but it takes people like you to persevere and be relentless about the innovation.

     I asked the question about shifting from CSR to CSV because as you stated many companies,  including members of SVI may have CSR programs that have been around for sometime.  These CSRs are probably received a lot of funding or are   still being funded with no visible benefit to the host company and worse no benfit to the community/beneficiaries.  The CSRs probably may have no connection to the core business or more importantly are not linked to the host company's value chain. Not being connected to the host company's value chain means the following:

  1. There is only one or two departments initiating/monitoring the CSR effort (usually Public Affairs and /or HR);
  2. Not every department is informed or cares about the intiative, hence the difficulty of the buy-in;
  3. If nos. 1 and 2 are true then there is need for CSV workshop/roadshow that will:
  • Flesh out and analyze the existing value chain including all departments, factories, suppliers and contractors;
  • The corresponding departments and sections should be able to see their participation in the value chain;
  • The societal issues need to be identified and prioritized and matched with the participants value chain, i.e. Societal issue- poverty allevation at bottom of the pyramid can be addressed by distributors' section of the value chain in tandem with the Brand champions;
  • The CEO, Board, Execom needs to be part of that workshop as CSV resource persons, direction setters and instigators.  This is indispensable in my forer company CSV is a mandate from head office;
  • A CSV Council or Committee must be convened with CEO as head and value chain representatives as full time members;
  • The workshop should include if possible immersions by CSV Council in ongoing Shared Value programs or bring  in Shared Value practitioners as coaches. 

These are all necessary requisites to get a buy-in to address the challenges of, as you Lara so correctly stated, shifting everyone to a totally different mindset.  Sometimes, it is easier to develop a CSV from scratch rather than from a CSR.  However,  in efforts for rural development you cannot burn bridges with a community you began with by a CSR and shift attention to another community.  We did ramp up from a mere housing relocation project which was initially a one-time commitment, where the company would merely donate houses to relocated informal settlers.  That was originally supposed to be the extent of the cmpany's commitment.  Today, we have been able to ramp up that housing project by infusing an already existing CSR inside the community.  The implementation, with many challenges is slowly beginning to show upward metrics from a negative.  The CSV business model was my game-changer in getting approval to morph the CSR into a CSV.  Intrapreneurship cannot be taken lightly because in my experience where your ideas either raise or curl eyebrows and therefore you become a "voice in the widerness", to which there are winning tactical combinations that you need to be heard in the upper cubicles, in any order, they are:

  1. A pilot (you were correct Lara);
  2. If possible, collaboration with a department head/manager, business partner, supplier, customer, a very prestigious NGO and/or a funding partner ( if you can't do a start up alone, don't be ashamed of getting good partners);
  3. Relentless persistence guided by a tangible objective;
  4. A genuine knowledge of your community/beneficiaries
  5. A system of measurement agreed upon by all, that will vindicate your innovative craziness when you begin to show benefit to business and to society.

     In conclusion, creating shared value is hard, harder when you need to go against the grain in your own company or even a community's mendicancy mindset, sometimes you see the possibility of failure up close. But CSV works in practice and your successes will be worth more than all the difficulties you went through.

     I hope this discussion will encourage more practitioners, consulants and members to share their own experiences.  Thank you.

Best regards,

David

 

 

 

    

Meghan Ennes's picture

Hello David,

I'm going to copy my response to your original posting in the Research Agenda article here, in case anyone else on this thread has the same question. Great conversation here!

Original Post:

Hello David: Thanks for your question. My FSG colleague Chile Hidalgo wrote a great post last year about how companies can take typical sustainability or CSR to the next level. Click here to read: Are Shared Value and Corporate Social Responsibility Different? A Sustainability Report Re-Imagined.

Robert Lucas's picture

This is certainly not an easy thing to establish!  We have enjoyed great partnerships in the pharma space over the years, but I'm focusing on non-pharma, shared value partnerships.  We're making progress, by focusing on what The Leukemia & Lympohoma Society can bring to the table and the core strengths of what we do best -- finding cures for cancer and ensuring access to treatments for blood cancer patients. 

Raysa Paredes's picture

Before finishing my undergraduate studies, I got my first job as an intern in the CSR Department of  a Peruvian company dedicated to the production and sell of consumer goods. My first tasks were focused on the Corporate Volunteering Program, donations and social responsibility projects. A couple of years ago, the company started focusing on creating initiatives that generate value for society and shareholders, a very important turn: from CSR to CSV.

In my experience living this transition, the turn to CSV implies 3 important challenges for people running the CSR office:

1. Work hard on buy-in: directors must understand CSV is good for businesss. CSV, unlike CSR, is no longer leaded by one office, it’s the way we do business. Business executives and directors are our allies to make CSV happens at  great scale.

 2. Learn how to make a “business case”: the programme/initiative proposed must generate a ROI , not only “social impacts” or “reputational benefits”.

3. Focus on core business: your programme must contribute to a specific business goal (profitability, constumer service, efficiency, etc.)

 

                        

David Laurel's picture

Erratum:

 

Today, we have been able to ramp up that housing project by infusing an already existing CSV* inside the community. 

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