Any Canadian with will tell you that no town is complete without a Canadian Tire and its staple sausage stand. It’s a Canadian institution!
But it isn’t just a killer business model of selling hot dogs. It’s also selling customers, comfort: it’s that hot dog stand run by that one person everyone knows at their local Canadian Tire. Not only is the stand making money hand over fist (winters off, hello!), but it’s also creating value for the shoppers.
The Three Pillars of Social Value
The hot dog stand at Canadian Tire may be a microcosm of the social value example, but it highlights the importance of a social value strategy for your business.
Social value is defined as the positive change experienced by people in a community through the businesses that support them and vice versa. “Social Value is about the wellbeing of current and future generations,” encompassing three pillars:
- Social
- Environmental
- Economic
Social value is not just about initiatives with big impact, it’s also about the everyday act, how we treat others, how we care for animals and nature, and what kind of small choices can we make that are better for the environment, and the neighbourhood around us.
Perhaps the Canadian Tire hot dog stand doesn’t provide an environmental value, but it does provide people with a sense of well-being (social value) and a cheap, tasty lunch (economic value).
Social Value vs Social Impact
If you heard “social value” and thought to yourself, “wait, isn’t that just social impact?” the answer is, not quite.
Social Impact involves specific cause-and-effect relationships that can be isolated and measured through controlled data collection. It’s a fixed point in time that measures what initiative transpired and who was affected by it.
Social Value, in contrast, is a cumulative, holistic approach to making a difference for an entire system of networks as opposed to one group of people with one intended effect. It still requires data collection to understand the total value of the approach, including the monetary aspect, but overall, the term encompasses much more.
Dom Potter of The Guardian expertly summed up the expansiveness of social value, “As a concept, social value is at its most potent when it is thought of as akin to storytelling – providing a narrative for impact which allows us to see beyond distinct events to give us a richer, deeper understanding of not just what happened, to whom, but also why it happened and the implications of this.”
Social Value Promotes Long-Term Thinking
For a local business, having social value as a strategy is important because it promotes longer-term thinking by asking questions such as:
- How will this add value to the neighbourhood?
- How will this help grow our community for future generations?
These things are important but are not commonly expressed or measured in the same way as financial value, which is why social value has the huge potential to help us change the way we understand the world around us and make decisions about where to invest resources. With this way of thinking, a business might develop new ways to allocate resources as well as new ways to create more fiscally rewarding opportunities that complement them.
Everyone is a Stakeholder Creating Value
Businesses themselves are stakeholders in society, and cannot succeed in one that fails, so leaders are increasingly realising they have a purpose and responsibility beyond only delivering value to their shareholders. Investors, consumers and employees are demanding more than just a financial return. Much like with the Canadian Tire Hot Dog stand, they want to feel that their investment (the hot dog) is worth the payoff (a full stomach, a community icon, and a full shopping experience).
Henry Ford summed up social value well when he said, “The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.”
Everyone wants more value, and by closing the business to community gap, we have a real opportunity to achieve it.