Creating Shared Value (CSV) is a recently developed corporate strategy that encourages leading companies to identify new areas of growth and profitability while building sustainable, scalable solutions for challenges such as access to healthcare, education, and nutrition, alleviating poverty, while simultaneously promoting environmental sustainability.
This strategy was introduced by Harvard strategy guru Michael Porter in cooperation with Mark Kramer in January 2011. Since then, this concept was widely discussed and some leading businesses are already implementing it.
One of these leading companies is DSM who recently rebranded itself and put sustainability and Creating Shared Value at the heart of its business strategy. I asked Jos van Haastrecht, DSM Branding Director to join me in writing this post so we can hear firsthand what CSV is all about and, more importantly, how DSM communicates this strategy to stakeholders and shareholders.
Bea Stanford: Why does DSM believe that its continued success will be driven by creating shared value; what are the most important projects (products) and innovations?
Jos van Haastrecht: “It all starts with the fact that DSM is actively engaged in addressing the same key challenges that face its stakeholders: mitigating the impact of climate change while searching for new forms of energy and trying not just to feed but also to improve the health and wellness of a growing world population. DSM creates sustainable shared value by innovating in ways that allow its customers to provide improved solutions – thereby serving People, Planet and Profit – to the challenges facing society. DSM offers its customers more sustainable, longer-lasting, safer, healthier and more nutritious alternatives. This allows them to derive value from being able to offer their end-users improved and differentiated products. NGOs and governments derive value from the impact DSM’s solutions and models generate for society and planet. DSM’s employees feel more engaged and motivated through the contribution they can make to a better world and the success this creates for the company they work for. And, finally, DSM and its shareholders derive value from stronger growth and profitability.
Bea Stanford: What are good examples of communicating the shared value business approach?
Jos van Haastrecht: “Let me give you some practical examples to illustrate this. In DSM’s Materials Sciences markets performance and sustainability are key drivers impacting demand. DSM is accelerating the transformation towards the production and use of materials that are lighter, safer, stronger and more durable and that have lower environmental footprints throughout their value chains than traditional materials, primarily metals. For automotive manufacturers, for instance, this transformation means providing drivers not only with lighter vehicles but more intelligent, safer ones, while simultaneously reducing the environmental impact of these vehicles over their entire lifecycle. This requires not only lighter materials but also innovations that reduce friction. End consumers feel the benefit in their pockets as their lighter vehicles consume less fuel and so they’re paying less at the petrol pumps. The vehicles are not only safer to drive in, but safer for all those around them, be it fellow road users or pedestrians. In terms of communication the end benefit of our solutions, i.e. an overall reduction in the eco-footprint, is being communicated as a key element of the value proposition.
Another, and totally different, example is our partnership with the United Nations World Food Programme (WFP). With this partnership, we are helping to combat hidden hunger and malnutrition in the developing world. DSM’s partnership with WFP, in place since 2007, has contributed to improving the diets of people, using essential vitamins, nutrients, and fortified rice, in countries such as Nepal. Kenya, Bangladesh, and Afghanistan. The partnership focuses on pregnant and nursing women, young children and vulnerable households. DSM combines technical and scientific expertise with high-nutrient products and financial assistance to help improve the nutritional value of the food WFP distributes to those in need.
A third example is our so-called People+ approach. DSM is developing this approach to measurably improve the lives of consumers, workers, and communities across the value chain. The new metric we are developing, the so-called DSM People Life Cycle Analysis, takes into account a product’s impact on the health, perceived comfort, and well-being of end-users, the working conditions of the employees involved in making it, as well as the impact on communities across DSM’s value chains.
This new assessment will make it possible for DSM to actually quantify its brand promise. It also allows us to have totally different conversations with our suppliers, prospects, and customers. Customers are no longer ‘just consumers’. Suppliers are no longer ‘just suppliers’. They are co-creators who often share the same values and the same purpose for a better world and are made actively part of our brighter living ambitions.
What is DSM’s branding all about, what in practice do you do?
Jos van Haastrecht: “I adopt three key principles in the branding approach: Compelling content, excellence in execution and strategic management. Firstly, it is about conveying the brand DNA and our shared purpose with great content and compelling stories. Secondly, it is very much about achieving excellence in the execution of the brand and purpose related content and collaterals: using the right marketing mix with the right channels, building on professional digital brand asset management tools and training and education systems. Excellence in execution also has to do with having the right processes in place. Finally, strategic management includes protecting and managing the brand and the brand equity. This encompasses intellectual property management, systematically measuring the brand perception and value, and closing the loop whenever required by steering the brand activation. It is also about creating alignment across the various disciplines and stakeholders internally and externally.”
Who are the stakeholders? NGOs? Governments?
Jos van Haastrecht: “We have defined a broad set of stakeholders including customers and prospects, employees, prospective employees, suppliers, the financial community, media, NGOs, governments, universities and research institutes and Key Opinion Leaders. Ultimately our purpose and brand promise is achieved with all these stakeholders.”
DSM is active and has a broad presence on platforms such as the Huffington Post, YouTube, and Facebook. How important is the mainstream public in communicating the value of the DSM brand?
Jos van Haastrecht: ”We see both owned and earned online media as a great way of achieving our objectives. We use earned media including the Huffington Post, The Guardian, the WEF et cetera in particular to target key opinion leaders.”
This is a new business approach; can you measure the effectiveness of the communication efforts?
Jos van Haastrecht: “Measurement is being done in several ways and on several levels. Overall behavior and perceptions of key stakeholders including employees, prospects, and customers are being measured on a regular basis. We also measure media coverage related to brand specific themes including share of voice and favorability scores. Another measurement mechanism is related to awareness and engagement established via our digital channels.”