1. No category

How to create a
shared value function
Page 1
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CSV is an innovation
No uniform or best
practice structure for
innovation 1
1. McKinsey & Company (2012). Making innovation structures work: McKinsey Global survey results.
McKinsey Quarterly
Page 2
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a.
Corporate Function
Integrated into corporate strategy, sustainability
b.
Separate CSV function
CEO
Business Unit:
Centre for innovation
CEO
Page 3
Product development: One
product at a time
CEO
Copyright © 2014 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation
Six foundations enable
innovation to create shared
value
2
Leadership
& culture
1
3
Integrated
Strategy
6
New mental
model
Innovation to
co-create
business &
social value
4
Customer &
stakeholder
insights
Collaboration
5
Targets &
KPIs to
measure
value
Page 4
Copyright © 2014 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation
1
CSV integrated into corporate strategy &
business units
►
CSV must be integrated into the
purpose, vision & values of the
business
►
CSV becomes the strategic lens
for decision making
►
Challenge: integrating CSV into
all parts of the business, day-today decision making and
transitioning products and
services to align with CSV
purpose.
Page 5
Example: A beverage company
assessed all their products against
the CSV strategy & divested those
which were not aligned
2
Leadership and culture
►
The CEO sets the tone of the
company, its purpose, vision and
values which ultimate inform the
culture – co-creates
►
Provides a supportive environment
to empower employees to think
creatively about the possibilities to
create social and commercial value
►
Builds a team of leaders and culture
for innovation
►
CSV function reports directly to
CEO
Page 6
Example: Team reported directly to
CEO who was the sponsor and
protected the team from the risk
adverse parts of the business
Copyright © 2014 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation
5
Managing and measuring value
►
Managing the innovation around
CSV is important – require metrics
to ensure the project concept meets
the market need and is delivered in
a timely fashion.
►
The KPIs also need to include
criteria for CSV
1. Creates commercial value
2. Creates social value
3. Is scalable
4. Has strategic intent
Example: Team had specific KPIs
which were different to the rest of the
business, one of which was a
commercial product .
Demonstrate how CSV initiative is
delivering on the strategy.
Page 7
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6
Collaboration with X-functional teams
►
Small team of specialists who each
bring unique and complementary
skills to the table
►
Protected by the CEO and senior
leaders
►
Given the mandate to innovate for
social and commercial value
creation
►
Have an intimate knowledge of the
business and stakeholders
Page 8
Example: X-functional team used
of
experts
from
need
from
identification
across the through
businesstoincl.
legal, IT,development
product
product development
Copyright © 2014 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation
Key takeaways
1
There are a
number of ways
of organising
the business to
create shared
value – there is
no best practice
structure
Page 9
2
How CSV is
integrated into
strategy, dayto-day decision
making and
managed to
deliver market
success is
more important
3
The 6 principles
support the
business to
successfully
innovate for
shared value