Shared Value & Lincs Co-op
Phil Considine
pconsidine@lincoln.ac.uk
Changing Times
• A major change in the perception of business
and its role in creating value
• Investor Owned Firms (IOFs) tend to view
value creation as short term financial
optimization with little thought of supplier
viability or impact on communities who are
central to their sustainability
• The operating context is changing
– Big society
– Shareholder revolts
Shared Value
• Shared value has been defined as ‘policies and operating
practices that enhance the competitiveness of a company
whiles simultaneously advancing the economic and social
conditions in the communities in which it operates’ (Porter
2011).
• Can be done by redefining the concept of value – not
simply the difference between costs and revenue
• Reconceiving products & markets, redefining productivity
in the value chain, building industry clusters.
Friedman
• The Social Responsibility of Business is to increase profits
‘The only social responsibility of business is to use its resources to engage in
activities designed to increase profits as long as it stays within the rules of the
game’ (New York Times Magazine 13 September 1970)
• The global recession has shone a light on this worldview and found it
wanting – organisations of all sizes are believed to be prospering at the
expense of society.
• the standard operating model of businesses consists of an outdated
perception of how they create value and indeed of what constitutes
value.
• How organisations can create shared value is key to the redefinition of
what capitalism means in the 21st century and how it might evolve into
a system that meets the needs of its stakeholders in the widest sense.
What is a Co-op?
• Consumer Co-op
– Provide consumption goods at the best price and value making
income go further
– Can include housing, utilities, health, leisure, financial services
• Producer Co-op
– Enables self employed small orgs and family businesses to gain the
strength needed to survive in the market
– Can include shared services, retailers
• Worker Co-op
– Provide what ILO calls ‘decent work’
– Can include labour only co-ops to large complex organisations
Source Johnson B (2009)
Lincs Co-Op
• Owned by its members and members elect a
board of board of directors who appoint the Chief
Executive who appoints a management team.
• Each member has a single vote and any member
is eligible to stand for election as a director.
• Ensure that the needs of the community and the
best interest of the membership are fundamental
to the organizational goals
Methodology: Grounded Theory
• Introduced in 1967 by Glaser & Strauss and developed
further by Strauss & Corbin among others
• Needed as a reaction against positivism in social research
• GT offers a middle ground between extreme empiricism
and extreme relativism
• Based on constant comparison and theoretical sampling
• Develops theory inductively
• Eschews a priori hypotheses and theory
• Focuses on research and discovery via direct contact with
social world
What GT is not
• Not a methodological holy grail
• Suitable in some instances not in others
• Works well when trying to understand how
meaning is constructed out of
intersubjective experience or where no
explicit hypothesis exists
• Does not work well when examining
objective reality
IOF Model of CSR
III. Adopt a cause
Charity of the year
Community Projects
IV. After profit activities
Donations
Sponsorship
Low
I. Strategic CSR
Before Profit
Supply Chain Activities
Motivational for staff
Reputational benefit
II. Relevant Activities
Supporting themes
Donations of IT kit
Work with relevant
charities & NGOs
Integration
High
High
Affiliation
Low
Questions
• What values underpin Lincolnshire co-operative ?
• What does ‘doing the right thing’ mean to Lincolnshire
Co-operative?
• Consider non business activities that Lincolnshire Cooperative support (or encourage employees to support)
that you consider important – why are these important?
• How do you show leadership in doing the right thing?
• How does being a co-operative impact the above and
why is it different from investor owned firms ?
• How does Lcoop create value in its supply chain
Values
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Community
Engagement
Members interest
Ethical retail
Doing good is in our DNA
Benefits to members
Local perspective
Respect
Sustainability
Develop local community and businesses
Sample Open Codes : from interviews were coded
Traditional Values reinforced by managers
Reporting to members focuses the mind
Sources of power in the business, Generating
power on site
Importance of organisational culture
Embeddedness of the culture
Community links – part of the community not an
adjunct
Local products
Developing staff
Need to educate people about the environment,
Aligning business agenda and initiatives,
Senior management live the values
Challenge of climate change
Translating and communicating the issues
Developing values and trust
Customers expectations and trust
Do the right thing (DNA)
Go the extra mile, do more than needed
Make a profit but not at any price
Treat each other well
Respect
A trusted brand
Linking innovation and environmental concerns
A trusted brand, Linking innovation and
environmental concerns, Empowerment and ethical
decision making, Services to schools
Forming alliances with external parties
Ensure activities are aligned with the business
strategy, Beauticians working in hospices
Lifelong learning
Community grants
Building environmental sustainability into
products, Risk assessment and decision making,
Stories of heroes – cutting waste
Stories of heroes – making profits
Stories of heroes – helping the community
Benefit stacking, enlightened self interest
Concerns about costs
Balancing economic and environmental issues
Knock on effects of empowerment and creativity,
Benefits of increased social capital
Being a coop definitely impacts the values
Importance of trust and honesty
Climate change overrides all else
I: Values Based
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Healthy Communities
Leaders model the way
Services to schools
Business in the Community
you can tell them about the values and what we stand for
Community Initiatives link us back to our owners
the structure helps with community involvement
Every day is different I hadn’t realised until I came here just how
involved in the community we are
we don’t just get to a stage in your development and say well that’s it –
we want you to improve
Staff development is central to our business
It helps with recruitment ?
I: Values Based - Community
• we’ve put XXX and another of our local suppliers together so that they
can purchase some of their ingredients together so that they can both
get a financial gain but also in a cooperative way of working together.
That’s a clear one. So not only are we helping them out, increasing
their purchasing power and using our knowledge and experience but
we are developing the cooperative message as well.
• I’m the local contact and get enquiries from local producers who are
not ready to take the step at this stage but who want advice and so we
do that – it’s free and we use that time to look at their packaging or
how they are going to get the stage of being big enough and get in to a
chain. So some of them will become suppliers and some will not but
we give that time
II: Relevant Activities
• Community grants
• Someone like AN Other retailer – they don’t
have the same values they’re not Lincs
focused
• It’s part of what we do it guides us – but I
don’t spend the day worrying about what’s
going on with dictatorships
• Volunteering
• Local initiatives
III. Adopt a Cause (IOF)
• It felt like we were not lining shareholders pockets
• You genuinely felt you were doing something
• My targets are financial, so that’s what I do. This
was different – it was giving something back
• Community activities tend to be reactive – ‘we
were phoned up by a local charity….’
• I think we did Children in need and it was fun
• Charity of the year?
• There are some national activities that happen but
I’m not overly certain what they are.
III. Develop Relationships
• Bringing new businesses on by supporting their
development
• Supporting local initiatives and charities not just
financially
• Giving our time and expertise over a long period
IV. After profit activities
• It’s good to see that we make these
donations
• I think we sponsor local football teams
• It’s just something we do
• I think there’s tax breaks or something
(IOF)
• We find it difficult to measure any real
benefit (IOF)
III. Develop relationships
Charity of the year
Community Projects
Long term alliances
Support of local social
enterprises
Time and expertise
I. Values based
Local Community
Develop local capacity
Develop people
Support the movement
Structure reinforces values
IV. After profit activities
Donations
Sponsorship
II. Relevant Activities
Healthy eating projects
Partnering with PCT
Educations (school/FE/HE)
Supply chain activities
Low
Integration
High
High
Affiliation
Low
……It’s not all just financial.
JS
Tesco
Morrison
Lincs Coop
Staff
152,000
519,671
131,207
2769
T/O
£22bn
£72bn
£17bn
£285m
Gross per
employee
£5190
£7669
£9275
£30,335
Pre tax per
employee
£5256
£7380
£7217
£7439
Sense Making
• Retrospective (Weick)
• Social Process
• Gaining an understanding of what people
want and ascribing meaning
• Relates to complex issues not everyday
problems
• Important where facts interact with beliefs
values and norms
Sense Making And Shared Value
• Shared Value is complex
• Sits on the intersection of facts, beliefs,
values and norms
• Is a social process
• Is not retrospective
• It is prospective sensemaking
• It creates a shared vision of a desirable
future
What is Lincs Co-op
• Is it a consumer Co-op – Yes
• Is it a producer Co-op - It helps to develop
local supply chain
• Is it a worker Co-op - Interviews suggest
that ‘decent work’ a core value
• A new triple bottom line?
Shared Value
• Shared value has been defined as ‘policies
and operating practices that enhance the
competitiveness of a company whiles
simultaneously advancing the economic and
social conditions in the communities in
which it operates’ (Porter 2011).