The concept of shared value was coined by Michael E Porter, head of the Institute for Strategy and Competitiveness at Harvard Business School, and Mark R. Kramer of the Kennedy School at Harvard University. In an article in the Harvard Business Review, Porter and Kramer argue that, in a world where companies are perceived to be prospering at the expense of communities within which they operate, and trust in corporates being at its lowest levels, businesses have to change the way they conduct themselves and shift from an outdated, narrow approach to value creation.
The authors argue companies focus on driving short-term performance while overlooking society and long-term success. “Why else would companies ignore the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of suppliers, and the economic distress of the communities in which they produce and sell?” they ask.
The authors believe that things don’t have to continue in this way. “Companies could bring business and society back together if they redefined their purpose as creating 'shared value' — generating economic value in a way that also produces value for society by addressing its challenges. A shared value approach reconnects company success with social progress."
The interdependence of business and society
The essence of shared value is that a company’s competitiveness and the wellbeing of the communities where it conducts its business are interdependent. When companies embrace this mutual dependency and interconnectedness between business imperatives and societal sustainability, they are likely to unlock new markets and create long-term and sustainable ecosystems.
Founded in 2005, Thesis is about adapting global street culture trends to the South African market.
In South Africa, the shared value model was spearheaded by Discovery’s Adrian Gore, whose business model centres on making people healthier and having a positive long-term impact on cost and value for both the insurer and the client. The model encourages clients to be healthier, which means there is a positive impact on mortality and morbidity in the health, life and short-term insurance markets. The resulting insurance savings leads to better price points and more client incentives being created to encourage more positive behaviour change. The effect is shared value, with a positive impact on clients, insurers and society.
The good news is that shared value is not exclusive to big business.
Changing the face of township business
Wandi Zondo is one such an entrepreneur who spotted an opportunity in street culture. He co-launched Thesis Lifestyle as a brand that’s inspired by “a new point of view about street and ‘loxion’ culture.” Founded in 2005, Thesis is about adapting global street culture trends to the South African market. It is a streetwear brand that is built on creating a positive influence in the community through great clothing, a beautiful retail experience, and fun activities that range from events through to running.
Zondo's story began at the then-Technikon South Africa, where he had to drop out due to a lack of funds. At the age of 18, Zondo joined Edcon, to earn income, but mainly to gain experience in the clothing retail business. “I learnt early on in life to work to learn as opposed to working just for money, because that way I could gain expertise that would be valuable when I later established my own business,” he says.
Creating a platform for local designers
“While working at Edcon, I realised that there was no platform for township designers to showcase their work and build their brands. So together with my business partners, we took a T-junction in Soweto to create a home for what is now known as Thesis Lifestyle.”
The business model was simple, says Zondo. “With Soweto having a population of five million citizens, our aim was to attract only 10% of the market, which got us to a healthy R5-million turnover per annum – a remarkable achievement given the fact that we opened the first store on a shoestring budget,” he says.
Investing in your own dream
Zondo used his credit card and a loan from family members to fund the business. “At that time, it was easy to secure credit. I understood the difference between good and bad debt and figured, if I don’t invest in my own dream, nobody would. People invest in businesses that are a going concern, not just ideas.”
What makes Thesis Lifestyle unique is the fun community environment which the business provides for artists, photographers, comedians, musicians, designers, copywriters and other creative people to showcase their talents while having fun at the same time. One of Thesis’ well-known customer engagement platforms was the weekly Social Jam Session, which allowed comedians such as Mongezi Ngcobondwane, also known as Tall Ass Mo, to tell their stories and promote their brands.
Building a community of athletes
“We started off with secondhand clothes and got to spread our value offering having been inspired by the growth of street culture globally. In addition to the highly successful Social Jam Session, we added the Thesis Run Cru to the mix, providing the youth with an opportunity to stay healthy and fit, while engaging with a really cool brand. Our approach culminated in running clubs, cycling, walks and more activations around the country,” says Zondo. “In everything we do, we believe in the power of defining yourself and collaborating with others.”
Major urban running initiatives were pioneered by Thesis Lifestyle, including the popular Run Jozi with Nike, which resulted in more than 20 running crews around the country. “We made running look cool – we started a movement, something that positively impacts the community. We run, we party and we repeat.”
Soon, another Thesis Lifestyle store was opened in Kagiso, on Jozi's west rand. Zondo and his partners were changing the face of the township – instead of renting space in the northern suburbs of Johannesburg, they opted to develop an ecosystem in Soweto and Kagiso. Today, Thesis Lifestyle boasts a wide product range including the retail store, a restaurant, running clubs, and more community-empowering initiatives.
Like any other business, there are hard times. “At times it dries up. There were situations that things were so hard that we didn’t have money to pay rent. But I have learned never to quit. I just don’t quit,” says Zondo.
Plans for the future
“Our next step is to keep the stores we have open and try to open more stores around the country. We’re also planning to launch an online store, to take the business beyond our borders,” says Zondo, adding that “for us to succeed, we have to keep going back to the basics. We will continue to conduct thorough market research in order to have a deeper understanding of our customers. In the end, we’re doing this for fun, and in the process, we make business. I love what I do. I’m really passionate about the difference we’re making in our communities. I want us to do more, and we will,” he concludes.