From the CEO’s Desk: May 2019
AFRICA’S BUSINESS GROWTH – GROUNDED IN COLLABORATION
At the 2019 Shared Value Leadership Summit in Boston on 7-9 May, speaker after speaker talked about how organisations deliver on the promise of their purpose. Once again, their conclusions confirmed that collaboration might just be the answer that we have all been searching for to keep our competitive advantage. This may seem counter-intuitive, but it is my personal belief that none of the organisations that shared their Shared Value journeys at the US summit could have created the economic value and value for society they spoke about without the power of partnership. The theme of this year’s Africa Shared Value Summit, Africa’s Business Growth – Grounded in Collaboration, taps into this zeitgeist.
Around the world, companies are grappling with the fear of giving away competitive advantage. This fear is rooted in a simple question: if we collaborate, will we lose our competitive edge? What we all need to realise, as Shared Value concept co-creator Prof Michael Porter was saying as far back as 1985, is that in many ways owning resources is no longer the foundation of competitive advantage. The source of our advantage is changing, and those who do not adapt will lose their competitive advantage to rivals who do. It is about gaining advantage through innovation, access to technology, leveraging data and retaining talent. A retail bank’s competitor is no longer just another bank: it can be a cell phone service provider or a tech start-up.
In this new landscape, one of the most important aspects of business success is relationships. A problem that we face as businesses is that while organisations and people are more connected than ever before, there is still much separation. Organisations that are able to collaborate and break down silos are most likely to be the ones that will be around in the future. As business we have a responsibility to think outside of the box, forging new ways to create and implement collective solutions for some of society’s biggest challenges while creating economic value for our organisation.
We rely on all our value chain and our stakeholders, and the time has come to engage meaningfully with the entire ecosystem to create social impact and economic benefit. Even though organisations have become involved in actively addressing transformation, sustainability, environmental and social impact, and so on, it has not brought about the change that we need as business, as society, as a continent and as a planet. The scale is just not there.
Our impulse to “protect” our competitive edge by working alone is driven by the kind of self-interested business practices that allowed businesses to contribute to societal ills instead of using our influence to mend them. In the future, a business’s competitive advantage will be driven by how well it leverages its ecosystem to drive profit with purpose – reaching underserved populations through product and infrastructure innovation, creating more efficient and less damaging processes throughout the value chain, and empowering all of the communities in which we operate to achieve a better standard of living. As Mark Kramer noted at the 2018 Africa Shared Value Summit, there is no objective “best car”, so vehicle manufacturers are able to succeed alongside one another by specialising to create the best car for their particular market. Their advantage is derived from doing things differently, essentially the way they choose to deploy their resources, and this is at the heart of Shared Value thinking.
There is nothing better to demonstrate collaboration than the African Continental Free Trade Area (AfCFTA). The main objective of the AfCFTA is to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources. This represents an opportunity for African countries to lift each other up through increased trade and cross-border partnership and innovation, so that the entire continent benefits economically.
Collaboration, as viewed through this lens, has never been more necessary. As John C Maxwell said, “Collaboration is multiplication.” We need to scale our efforts to drive Africa forward and we cannot do this on our own.
I look forward to seeing many of you at the 2019 Africa Shared Value Summit in Nairobi this week, to be inspired to find ways in which we can all work together for the benefit of all, both economically and socially.
Onwards and upwards!
CEO, Shared Value Africa Initiative