Shared Value & Partnerships: The Makings of a Collaborative Economy

The following post is part of TriplePundit’s coverage of the 2011 Net Impact Conference in Portland, Oregon. To read the rest of our coverage, click here.

Michael E. Porter and Mark R. Kramer arguably popularized the concept of shared value in their Harvard Business Review article earlier this year entitled, Creating Shared Value. They define it as “creating economic value in a way that also creates value for society by addressing its needs and challenges.” At the 2011 Net Impact Conference, shared value was the focus of a session topic, proving that this idea is bubbling up in business.

Participating on the panel was Enterprise Holdings, Inc., which owns and operates Alamo, Enterprise Rent-A-Car and National Car brands. Lee Broughton, Head of Corporate Sustainability for Enterprise Holdings, Inc., relayed that Enterprise is the largest owner of passenger vehicles in the world, with a fleet of 1.6 million in the US alone. As recently reported here, Enterprise released its first sustainability report and has taken on the challenge of improving urban mobility. Not only is the company investing in alternative fuel research, but also it’s investing in EVs.

Enterprise Rent-A-Car invested in and committed to 500 Nissan LEAFs and instead of scattering them throughout the country, the organization partnered with 30 of its locations in major markets, clustering the vehicles in an effort to socialize them. The company views this as a win-win-win: more people will have the opportunity to drive Nissan LEAFs or see them driving around which will potentially inspire them to purchase one; Enterprise Rent-A-Car will bolster its sustainability cred; and Nissan will save money on advertising. This partnership creates value for all parties involved – Enterprise Rent-A-Car, Nissan and society, since EVs are more environmentally friendly than gas-guzzlers.

Also on the panel was Starbucks, which just announced its new initiative, Create Jobs for USA in partnership with the Opportunity Finance Network (OFN). Starbucks donated the first $5 million to launch the Create Jobs for USA program and is asking Starbucks customers to donate at least $5. Donations will go directly to OFN, which funds small businesses, including social enterprises and nonprofits. According to OFN, $3,000 in donations creates or maintains a job in a community. While exciting, this is arguably more of a philanthropic partnership than an example of shared value.

Starbucks also discussed how it’s achieving shared value with an initiative to recycle all customer cups by 2015. Interestingly, Starbucks invited competitors in its supply chain to come up with innovative ways to achieve this goal. What Starbucks found was that when the competitors were invited, their existing suppliers showed up with potential solutions; nothing like a little competition to get the innovation flowing. While clearly beneficial to the Starbucks brand and the communities in which the company operates, the economic benefits remain to be seen. If the recyclable cups cost more to produce, Starbucks might make up for the cost in increased sales as people vote with their dollars to support the effort. Only time will tell.

All in all, it’s inspiring to see so many large brands finding value in shared value. That these efforts are being incorporated into company strategies means that we really can do well from doing good.

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Ali Hart is a sustainable communications and engagement strategist with a passion for life’s essentials: food, water and storytelling. Her background in the Entertainment industry, penchant for humor and MBA in Sustainable Management from Presidio Graduate School are Ali’s secret weapons in her quest to master the art of behavior change and to make sustainability inconveniently fun.