Moving Shared Value from the Shadows to the Centre: What Businesses Can Learn from Uber’s London Demise

Reuters

Over a well-deserved pizza at the end of a hectic UNGA week in New York, a friend and I got onto one of our favourite topics: how companies can and should truly demonstrate that they care about shared value, especially for women across their value chain. The night before the news broke that Uber would be banned in London, we debated its role in positive change and if it was a company that could every truly embrace a shared value proposition.

Her argument was that Uber had done great things and created huge potential, especially for women: working flexibly, on their own schedule provides crucial access to income (Uber themselves have shared some great stories about women who have become drivers). My view was that a company that had demonstrated time and time again its overwhelming commitment to the single bottom line would struggle to ever become a responsible company.

It was a spooky coincidence then to see the next day’s news — but from my perspective entirely unsurprising. Uber has been at the receiving end of a barrage of criticism in the past year: its tardiness in speaking out against Trump’s immigrant ban, its treatment of women, its seeming disregard for labour rights. Its corporate responsibility strategy has been characterised by big targets and bold announcements (like its commitment to create 1 million jobs for women with UN Women, cancelled two weeks after it was announced) with seemingly little influence on its business model and practices. Like many other companies, Uber has appeared to see its CSR as an add-on, not part of the core, and that is now having an effect on its core business.

Learning from Uber’s mistakes is possible but taking action to move shared value from the fringes of your business model to the centre is challenging. Companies should be thinking about three key things as they aim to avoid the public pitfalls the tech company has faced:

1) Really, truly understand shared value.

If I had a nickel for every time I heard the term shared value used in conversations with CSR folks, I could buy out Uber myself. If I had one for every time I had seen shared value demonstrated — well, I probably wouldn’t be able to afford a black cab’s base fare. Shared value, a concept developed by Michael Porter and Mark Kramer, quite literally is about ensuring that the value generated by a business, its financial return, is shared across its value chain: quite simply it means businesses can achieve financial success and create positive social change.

Shared value has, as a concept, moved to the mainstream of CSR discussions. But there are massive gaps between the rhetoric and reality. Most companies purport to create shared value, but don’t have a clear sense of what value they are creating. They don’t name an objective or crucially, track the impact. They assume good work is being done but can’t clearly articulate how they know that.

Shared value requires a true commitment to putting creating social good at the heart of a company and measuring the impact a company is having with the same rigour as it tracks quarterly returns. Without a true understanding of and commitment to the concept, it’s just another CSR add-on.

2) It’s the econom(ics), stupid.

CSR is often written off as the nice, touchy-feely stuff a company does to feel good about itself and look good to others. The criticism is not unfounded. Too often, CSR programmes are developed in a vacuum, not strategic or opportunistic but reactive to the whims of senior execs. Acting as a truly responsible business is more challenging that giving away money, getting your employees to volunteer, or setting up charity partnerships.

Fundamentally, the best and most effective programmes look at the business from the very root — how it earns its money, how it spends its money, and who sits along that entire process — and understands the impacts it has. They can understand the intended and unintended consequences of their activities and work to make them better. They build transformational — not just transactional — partnerships and collaborations with NGOs, governments and yes, even other companies. Ironically, one of the key motivations for building CSR programmes has been to retain a figurative license to operate — in Uber’s case it’s quite literal.

Having just gone through the process of becoming a B Corp ourselves, we couldn’t recommend their audit tool more highly. It asks tough questions and requires companies to think about their entire operations. Truly being a responsible business means looking first at the business with clear eyes.

3) Honesty is always the best policy.

We regularly beat the drum of transparency on this blog, and we’ll do it again. Really, which is scarier? Sharing information about challenges, mistakes and failures yourself, or having someone else do it for you (usually on the front page of the paper)? Technology and social media have made it increasingly harder for companies to hide their troubles and its only getting easier for workers, consumers and others to share their experiences — both negative and positive — with the world.

When boards and execs get on the front foot, it usually turns out ok. Consider how different things might have gone for responsible business leader Patagonia if their discovery of forced labour in their supply chain had been broken by an investigative expose, rather than by its own blog. Telling the truth and working to fix your mistakes is increasingly being rewarded by consumers and companies should boldly be honest and share.

So is Uber “salvageable”? I think with a sincere commitment to interrogate its entire business model, address hard challenges across its entire value chain, and treat its people like people and not inputs, the answer is: maybe. But for other companies, particularly start-ups, wondering what success entails — it’s not too late to put shared value at the centre of all you do.