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What is Shared Value and Why is it a Game Changer?

What is Shared Value? You may be surprised to learn that it’s a game changer for leading companies and non-profit organisations.

The insurance sector is combining shared value principles with behavioural economics and data capability to devise more sophisticated products and value propositions for customers.

For example, life insurer, AIA Vitality, rewards customers who take steps towards improving their health, including lower premiums; Suncorp is exploring a new market by tailoring home contents and car insurance for low income earners; and IAG is proactively investing in community resilience to reduce the impact and cost of weather-related disasters.

Is it well understood?

Whether it’s new or you’ve heard of it before, I find that shared value is not consistently or well understood. At it’s core it is a new lens for business innovation, driven by a quest to find the intersection of commercial and community interests. It’s a common language that helps for- and not-for-profit organisations create seriously powerful partnerships together.

Ask yourself: How much do businesses really know or care about their community? Most businesses try to help out in some way but, understandably, when the going gets tough, the last thing on their mind is ramping up community support.

So, why is it important?

After leaving the corporate world, a visit to a nearby community centre led me to the realisation that I and many of my former colleagues in business knew very little about the complexity of social problems, even though societal health is a key driver of business performance.

It fuelled my desire to create stronger bridges between the for- and not-for-profit sectors, with the fundamental question being:

How can genuine win-wins be created, where both sides are motivated, engaged and receiving meaningful benefits?

As I began pondering this question, the principles of shared value were being formulated and published in the Harvard Business Review by Professor Michael E. Porter and Mark Kramer. They focused on the win-wins that can be created when there is an overlap between the business agenda and community needs. Discovering their work was a personal Hallelujah moment!

Where do non-profits fit in?

On the flip side, it became apparent that non-profit organisations rely on government, philanthropic and foundation grants to sustain the great work they do. How could they create more effective partnerships with companies to take their impact to a higher level? Again, the principles of shared value would provide a guiding light with a bit of reverse engineering thrown in.

All this comes with the caveat that shared value strategies and partnerships don’t miraculously happen overnight, they require the right mindset, skills and an ability to facilitate complex collaborations.

If you can get this right, the rewards are enormous! Is it time to start?


Phil Preston is a shared value expert who provides strategy, facilitation, education and speaking services to a range of public, private and non-profit sector clients. He can be reached via

Main image courtesy of

PS. If you are interested in finding out more about shared value and its enormous potential, then you can download this (free) primer. Enjoy!


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