July 23, 2015

A win-win strategy – good for society and good for business

Mark Kramer, a Senior Fellow at Harvard Business School and a leading authority on strategy and competitiveness, shares his thoughts on shared value and how Yara has embraced the concept as a business strategy.
Mark Kramer from Harvard Business School and Terje Tollefsen from Yara
Mark Kramer from Harvard Business School and Terje Tollefsen from Yara

Yara is the subject of a Harvard Business School case study (PDF) on shared value by leading authorities on strategy and competitiveness, Professor Michael E. Porter and Senior Fellow Mark Kramer. The case study shows how Yara has increased its sales and grown the economic development in rural farming communities, by connecting smallholder farmers with the infrastructure that provided better access to inputs and markets. Below you can read an extract of Mark Kramer and Terje Tollefsen, Yara’s Head of Strategy and Business Development, conversation on shared value.

What is shared value?

“Shared value thinking is a recognition that major social problems often cannot be solved without the engagement of the private sector,“ says Mark Kramer. “It is about how companies can improve their competitive positioning, improve their profitability and growth prospects by addressing social issues that constrain them, that hold back their growth. But to do this and to think this way, companies have to treat social problems as if they are business problems,” he says.

How does Yara embrace the concept of shared value?

“There is very little that we do in Yara on a daily basis that does not contribute to positive value for society in addition to delivering shareholder value,” says Terje Tollefsen.

“The Yara case that Michael Porter and I have taught before, this is a Harvard Business School case, is a fascinating example where Yara has orchestrated a cross-sector coalition that brings in 40 to 60 other private companies, that brings in the government of Tanzania, that brings in the World Bank and other international aid organizations, that brings in other governments as well to create a shared vision for what agricultural development can be in Tanzania,” Mark explains.

What does the Yara Harvard School Business Case focus on?

“This case focuses on taking the principle of creating shared value down to the very practical level and takes as a point of departure the work that Yara has done in developing the Southern Agricultural Growth Corridor of Tanzania, which we call SAGCOT,” Terje says.

“As a result of this effort, Yara is raising the income for millions for farmers, creating hundreds of thousands of new jobs in this value chain and actually increasing its own market share, growth prospects and profitability dramatically in the region,” Mark concludes.