The Connection between Competitive Advantage and

Social Value: Engaging Employees through Shared Value Volunteering

Dane Smith Managing Director

FSG

Mark Kramer Co-Founder & Managing Director

FSG

Panelists: Facilitator:

Lauren Wagner Business Development Manager

VolunteerMatch

@Lauren_Lynn2

June 18, 2013

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• Type questions into the box on the

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@VM_Solutions using “#VMbpn”

• We will pose questions at the end of

the presentation

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after the event

2

The Connection between Competitive Advantage and

Social Value: Engaging Employees through Shared Value Volunteering

Dane Smith Managing Director

FSG

Mark Kramer Co-Founder & Managing Director

FSG

Panelists

3

Boston | Geneva | Mumbai | San Francisco | Seattle | Washington FSG.ORG

Engaging Employees through

Shared Value Volunteering

VolunteerMatch

June 2013

© 2013 FSG

FSG.ORG

5 © 2013 FSG

According to the Gallup Poll, 71% of U.S. Workers Are

Not Reaching Their Full Potential

29% 51% 20%

Engaged Not Engaged Actively Disengaged

These employees are loyal and

psychologically committed to

the organization. They are

more productive and more likely

to stay with their company for at

least a year.

These employees may be

productive, but they are not

psychologically connected to

their company. They are more

likely to miss workdays and

more likely to leave.

These employees are physically

present but psychologically

absent. They are unhappy with

their work situation and insist on

sharing this unhappiness with

their colleagues.

Source: The Gallup Organization

© 2013 FSG

FSG.ORG

6 © 2013 FSG

Companies Do Not Automatically Increase Employee

Engagement When They Offer Volunteer Programs

• Three things are needed for a company’s volunteering program to drive

engagement:

– Needs to have demonstrable impact on the social problem

– Needs to have a demonstrable connection to the company’s business

– Needs to have a connection to the employees’ work. Companies can do

this by:

• Designing the program so that it gives employees the opportunity to

learn and grow in areas related to their work

• Demonstrating how the volunteering efforts are important for allowing

the company to execute on its Shared Value strategy

• It is insufficient to have anecdotal evidence that these objectives are being met

– the company needs to measure these elements and use the measures to

improve their Shared Value and Employee Engagement programs.

© 2013 FSG

FSG.ORG

7 © 2013 FSG

There are 5 Deadly Sins of Volunteerism

Sins of Commission

• Requiring participation in

volunteer programs

Sins of Omission

• Developing programs without

clear employee input

• Not connecting volunteer

program to the company’s

mission

• Missing opportunities to help

employees develop new skills

that the company needs

• Not using volunteer programs

to reward stellar employees

© 2013 FSG

FSG.ORG

8 © 2013 FSG

There Are Twelve Drivers of Employee Engagement

THE FIRST ELEMENT

Knowing What’s Expected

THE SECOND ELEMENT

Materials and Equipment

THE THIRD ELEMENT

The Opportunity to Do What I Do Best

THE FOURTH ELEMENT

Recognition and Praise

THE FIFTH ELEMENT

Someone at Work Cares About Me as a Person

THE SIXTH ELEMENT

Someone at Work Encourages My Development

THE SEVENTH ELEMENT

My Opinions Seem to Count

THE EIGHTH ELEMENT

Connection with the Mission of the Company

THE NINTH ELEMENT

Coworkers Committed to Doing Quality Work

THE TENTH ELEMENT

A Best Friend at Work

THE ELEVENTH ELEMENT

Talking About Progress

THE TWELFTH ELEMENT

Opportunities to Learn and Grow

Source: The Gallup Organization

© 2013 FSG

FSG.ORG

9 © 2013 FSG

-27%-31%

-51% -51%

-62%

12%18%

12%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Bottom-Line Reduction Top-Line Growth

% difference

of top quartile

from bottom quartile

Turnover

Absenteeism Shrinkage

Safety

Incidents

Customer Productivity Profitability

High-

Turnover

Orgs.

Low-

Turnover

Orgs.

Source: The Gallup Organization

Employee Engagement Has A Strong Effect

on Business Results

Analysis of:

681,799 employees

23,910 business units

125 organizations

37 industries

© 2013 FSG

FSG.ORG

10 © 2012 FSG

“Giving Back”

Business must fulfill community obligations

Business Engages With Society In Three Ways

Shared Value Corporate

Philanthropy & Volunteering

“Finding business opportunities in social problems”

Social problems can be solved with a

business approach

“Minimizing harm to society and the

company”

Business should be responsible

Corporate Social Responsibility

The choice of how to engage influences the structure and impact

of corporate volunteerism

© 2013 FSG

FSG.ORG

11 © 2013 FSG

Shared Value Strategies Increase Competitiveness

and Profitability by Addressing Social Problems

Shared Value holds the

key to unlocking the next

wave of business

innovation and growth.

” “

The Role of Business in Society

• Only companies create prosperity

• Business loses legitimacy when

companies are perceived to be

prospering at the expense of the

broader community

• Companies can innovate, scale and

sustain solutions in ways that

governments and NGOs cannot

© 2013 FSG

© 2010 FSG 12

FSG.ORG

Shared Value Is Found at the Nexus of Business

Opportunities, Corporate Assets and Social Needs

Social Need

Business Opportunities

Corporate Assets and Expertise

Shared Value Opportunity

Volunteer opportunities can also be found at this nexus point

© 2013 FSG

FSG.ORG

13

How Do Companies Create Shared Value?

Enabling Local Cluster

Development

Redefining Productivity

in the Value Chain

Reconceiving Products

and Markets

Shared Value is:

“Enhancing the competitiveness

of a company while

simultaneously advancing the

economic and social conditions in

the communities in which it

operates”

Shared Value is NOT:

• Sharing the value already created

(philanthropy)

• Personal values

• Balancing stakeholder interests

Shared Value strategies:

© 2013 FSG 14

FSG.ORG

© 2011 FSG

Companies Are Rethinking Their Purposes

Healthy Families

Computing / IT Smarter Cities

Credit

Healthcare Products

$ Healthy Relationship

With Money

© 2013 FSG

FSG.ORG

15 © 2013 FSG

Volunteering Programs Can Be Designed

Three Different Ways

So

cia

l Im

pact

Business Impact

“Shared Value Enhancers” Shared Value

“Community Obligations” “Business as Usual”

Solving social problems at scale

IRR

hu

rdle

rate

3

Most volunteer programs fall into the first category

offering little business or social impact:

Adopting a shared value approach can strengthen both benefits

2

1

© 2013 FSG

FSG.ORG

16 © 2013 FSG

Shared Value Initiatives Have Measurable

Social and Business Impact

Strengthening Shared Value through Volunteerism

• Shared Value requires companies to develop deep

relationships with other stakeholders such as NGOs and

community groups

• Volunteer programs work best when they strengthen Shared

Value via:

• Deepening insights about relevant social problems

• Identifying new revenue or cost-saving opportunities

linked to social problems

© 2013 FSG

FSG.ORG

17 © 2013 FSG

Shared Value and Employee Engagement Can Be

Mutually Reinforcing

• Strengthens innovative thinking

• Enhances ability to develop strong partnerships

SV EE

• Deepens the connection between employees and the

company mission

• Signals company commitment to providing opportunities

for employees to learn and grow

EMPLOYEE ENGAGEMENT

SHARED VALUE

Q&A

18

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Save the Date – July 18th

20

A 2013 VolunteerMatch Client Summit Encore Presentation In Case of Emergency:

Engaging the community in Disaster Response

Thursday July 18th, 2013

10-11 a.m. PT (1-2 p.m. ET)

Featuring: Stacie Kronthal Vice President of Strategic Partnerships, Network for Good

Jim Starr Vice President, Volunteer Management, American Red Cross

James Rooney Manager, Technology for Good, Microsoft

Register:

https://www1.gotomeeting.com/register/855574225