THE FACULTY QUARTERLY 

Autumn, April 2014

Community development - whose job is it anyway?

Andrew MacLeod - Asia-Pacific CPO Forum Speaker Preview

Andrew MacLeod thinks Corporate Australia is nearing a tipping point where the creation of shared value will become a mainstream business priority.

But, the Director of Cornerstone Capital, former general manager at Rio Tinto, and former senior official of both the United Nations and the International Committee of the Red Cross, says CPOs will miss the boat if they keep looking to public relations and other departments to lead their organisations’ community development initiatives.

Speaking ahead of his address to the 7th Asia-Pacific CPO Forum in May 2014, where he will join a panel discussion on Social Procurement, Andrew is looking forward to engaging with more CPOs who are leading the creation of shared value for their organsiations and communities.

Entering its seventh consecutive year, The Asia-Pacific CPO Forum is the longest-running CPO event dedicated to accelerating commercial leadership in the region. Tackling the theme ‘Tough Love’, delegates will consider what it takes be tough enough to deliver results and tender enough to drive performance, optimise relationships and retain talented staff.  To view the full CPO Forum program, click here.

Here, we provide a sneak peek into Andrew’s take on social procurement and the CPO’s role in community development:

On redefining sustainability
Before you can really start to demonstrate shared value, it’s important to get the definition right in your organisation. “What it’s not is corporate social responsibility rebranded”, says Andrew. “This is an outdated and ineffective concept that fails to create truly sustainable outcomes.” Having worked in both the corporate and NGO sector for many years, Andrew has observed organisations, particularly in mining, creating shared value long before Michael Porter popularised the term. In Porter and Kramer’s article, first published in the Harvard Business Review in 2011, the term shared value denotes a broader goal for businesses than shareholder value; companies operating with a shared value mindset prioritise business investments that also produce social value – and prioritise social investments that also produce business value.  “Genuine shared value, therefore is new value – splitting what would otherwise have been non-existent profit”, Andrew says, “and profitability has guaranteed sustainability; not social or environmental sustainability but financial sustainability”.

For CPOs seeking to deliver sustainable value to their organisations, shared value is a valuable and welcome addition to the procurement scorecard.

On Tough Love with the social sector
Moving from a corporate social responsibility mindset to a shared value one also has important implications for the way organsiations, and procurement in particular work with their suppliers, particularly those in the social sector.  When sustainable, profitable outcomes are the goal corporations cannot afford to compromise on quality, safety or cost for that matter, just for the sake of being seen to be doing the right thing in the community.

“One of the biggest risks organisations face today is reputational risk and nowhere is that more prevalent than in the supply chain.” Andrew says that by taking a Tough Love approach with their small enterprise suppliers, CPOs and procurement teams can not only get better business outcomes for their organisations but can help build economies of scale and promote local economic development that would otherwise not occur in certain communities and sectors.

On leading Gen Y
Of course, CPOs are not just leading across their organisation and in their supply base but are leaders of their own, growing procurement teams. Andrew says Social Procurement pays high dividends in terms of employee engagement, retention and productivity too. “Gen Y in particular, demands a social outcome from their work.” In the war for talent, particularly in procurement, CPOs who can align successful commercial outcomes with better social outcomes have a compelling employee value proposition.

You can hear more from Andrew and also hear practical examples and case studies from The Faculty’s extensive work and research in Social Procurement at the CPO Forum at Sydney’s Pier One on Wednesday 14th and Thursday 15th May.

Register here, or for more information on the Forum, contact Event Manager, Belinda Toohey on +61 3 9654 4900 or via email