The Vietnamese people have a long history of philanthropy. Its deep roots are expressed in many of our proverbs such as “Lá lành đùm lá rách”. The literal translation is “healthy leaves envelop torn ones.” And the meaning is clear: help those in need.
Many successful Vietnamese companies do just that. They allocate some of their profits for charitable services.
However, not many companies have gone one step further and followed the growing number of international companies, which embed the concept of Shared Value at the heart of their strategy and document it in their annual ESG reports.
Shared Value turns traditional notions about CSR (corporate social responsibility) on its head. Instead of being a department that reduces profits, CSR becomes part of a wider one that raises them.
At its heart, Shared Value is a management strategy that aims to align “doing good” with “doing well”. Companies can increase their profitability by supporting the local economy and society.
It’s a concept that was first coined in 2006 by Harvard Business School Professor, Michael E. Porter and social impact consultant, Mark Kramer. In a subsequent Harvard Business Review article, they explained it as such: “Shared Value results from policies and practices that contribute to competitive advantage while strengthening the communities in which a company operates. Companies can create Shared Value in three ways: by re-conceiving products and markets, redefining productivity in the value chain, and strengthening local clusters.”
This has been THP’s guiding principle from the outset and is enshrined in all our core values. We understand that it is not just supranational organizations like the United Nations (UN) and governments, which have a responsibility to make society better. As a private sector company, we have a role to play too: the more companies that do so, the greater and wider the rewards.
So how do we adhere to the three key Shared Value principles?
Re-conceive products and markets: As Porter and Kramer explain this goes beyond meeting customers’ needs to improving lives. All of THP’s products are successful because we identify a customer need. But what makes them market leaders is because they also make our customers healthier. This is especially the case for Dr Thanh’s Herbal Tea, which re-packages the beneficial effects of Traditional Medicine from the Far East into a convenient format for busy consumers.
Our first core value – Customer Satisfaction – spells this out: we provide innovative and competitive products and services, working for mutual benefit.
Redefine productivity in the value chain: this is all about optimizing processes to utilize resources efficiently. Our sixth core value – Today is Better than Yesterday but not as Good as Tomorrow – captures this. For THP, progress means continually striving to improve working methods, processes and technologies to increase efficiency. There have been lots of examples this year such as the implementation of SAP Ariba – a technology solution that allows us to connect, collaborate and manage our supplier network.
Strengthen local clusters: Companies can create a positive network effect when they strengthen the cluster on which they depend. One way to do this is through training and another is through importing best global practice. THP incorporates this in our second and third core values: International Quality Standards and Responsible to Community and Society.
We make sustainable development a priority when choosing our business partners and our overall aim is to make a positive impact on the community and wider society in all markets where THP does business. For us, Shared Values has always been about creating value through win-win situations.
