“Not adding value is the same as taking it away.”
— Seth Godin, American author, businessman, marketer, and public speaker.
Where do you start when you want to add value? This is the central question of this feature. Like it or not, businesses are an integral part of society. We work in companies, buy from companies, and companies use our natural resources. As it happens, companies that focus on giving back to society are often those that consistently thrive. To identify value, place your business in the community’s shoes that you operate and recognize the pains and challenges they are experiencing. Once your business understands the needs and wants of your employees, customers, community, and other stakeholders, your company is indeed on its way to adding value. This will allow businesses to determine and design the value addition. So, this is already what one can describe as a starting point.
However, companies have to be realistic since they can’t cover everything and solve all societal problems. Instead, they have to focus on what is most important to them in their context. More to the point, that business can be under a false pretense that there are one-size-fits-all solutions. Instead, companies must understand the social phenomena and dynamics playing out in their communities; otherwise, it lacks context.
Significant changes are on the horizon, and businesses have to take advantage of collaborations that will be sustainable, equitable and stand the test of time. Organizations must be willing to embrace change, mix up things and add value to communities that will give them the edge over their rivals and beat the competition. Doing it right will bring a business not only some good PR and add to their brand but also better, more motivated staff, happier customers, and, of course, help improve disadvantaged people’s lives.
Adding value is the name of the game
Businesses that add value are both successful and sustainable because they recognize that they are social entities. Organizations have a social impact, which must be considered part of the overall mission. These value-adding companies are the ones who can contextualize what is happening in the here and now and take the right action without hesitating. Above all, businesses can offer superior value to their stakeholders while leading a conscious business. These companies are the ones that exist in harmony with society.
In the not-so-distant past, it was common, and perhaps to some degree, still prevalent that companies focus their attention solely on their shareholders. And let us not be naive, being profitable and creating value for shareholders is essential. But this must be done alongside a central mission of doing what’s best for society and the environment. With a focus on shareholders, it’s easy to slip into short-term thinking. As a result, businesses start to make decisions that quickly result in shareholder value. But if these actions aren’t aligned with helping society as a whole, they may be harmful in the long term.
One of the best examples of this long-term view and impact is Fast Retailing. It owns UNIQLO’s clothing brand and is led by founder and CEO Tadashi Yanai. From its inception, the company has realized that companies that only chase profits don’t last. Instead, sustainable, and conscious companies are the ones that live in harmony with society and consider the common good.
Fast Retailing has several practices designed to be both efficient and sustainable, like the All-Product Recycling Initiative. This initiative is a program called the 10 million Ways to HELP Project. It began in 2015 and donated 10 million pieces of secondhand clothing every year to displaced refugee families. Still, given that there are 60 million refugees, Fast Retailing hopes to do even more in the future.
From the general perspective, organizations should add value by choosing issues that are somewhat linked to their products and services or aligned to the interests of the business. For example, if enterprises produce goods or deliver services in a developing country, why not invest in the local community or local infrastructure? It would serve a good purpose, add value to the community, create much-needed employment opportunities, and attract the best talent for your business.
Communities tend to support companies known to support initiatives that deal with social issues. Of course, supporting initiatives that add value can do more than help businesses generate more profit. But it has been shown repeatedly and there are plenty of evidence that these initiatives also help companies cut costs. Hence, value addition is a vital strategy that allows businesses to invest in the society that supports them and their future as a company. Moreover, it creates more satisfied and loyal customers, employees, and shareholders, becoming an indelible part of successful businesses.
A better understanding of an organization by citizens and stakeholders leads to better stakeholder relationships and a more active and respected position in the community. This, in turn, can develop into stronger and more enduring alliances (all of which are closely linked to an organization’s reputation for implementing CSR). CSR can help build ‘social capital’, i.e., the economic and/or collective benefits derived from cooperation between individuals and groups.
In adding value, CSR’s financial aspects are also extremely beneficial as they improve operational efficiency and save cost results from activities and policies determined by the system approach to management. For example, evaluating environmental and energy aspects of an activity can reveal the opportunities for waste treatment in the park for all evaluation staff, thus contributing to the overall organizational facility while protecting the environment.
After all, it is society, not shareholders, who ultimately decide the fate of a company. If a company doesn’t benefit the community, likely, that company won’t be able to thrive and be competitive in the long term. But if the organization has an obvious benefit to offer, society is expected to embrace it. So, companies must think about the future they want to create, which is motivated by wanting to add value. Therefore, businesses must never neglect the human element.
For businesses to be successfully built on by adding value, they must express the values and mission of their organizations. To ensure sustainability, companies should make the betterment of society a primary concern and make a profit. Gone are the days that adding value and contributing to societal growth and well-being is a nice thing to do alongside actual business duties. This has changed in today’s businesses. Companies are taking this seriously and have shown willingness to reshape their entire strategies in the process.
Kofman, Fred (2006), Conscious Business: How to build value through values. Sounds True, Inc, Boulder, USA.
Kotler, Philip; Hessekiel, David; and Lee, Nancy (2012), Good Works!: Marketing and Corporate Initiatives that Build a Better World… and the Bottom Line. John Wiley & Sons Inc.
Nonaka, Ikujiro and Takeuchi, Hirotaka (2019), The Wise Company: How companies create continuous innovation. Oxford University Press.
Osterwalder, Alexander; Pigneur, Yves et. al (2014), Value Proposition Design:How to Create Products and Services Customers Want. Wiley.
About the Writers:
Romein is a (self-confessed) Pan-Africanist by heart. Romein is a multi-disciplinary professional with experience in various sectors. Contact him via ([email protected])
Ebenezer is a Development Communication Specialist, SDG Enthusiast, Finance & Investment Nomad, and a WriterPreneur. He`s Country Director (Ag) of PIRON Global Development GmbH, Ghana (www.piron.global). Contact him via ([email protected])