Implementing a successful social value strategy requires input from many areas of an organisation. At Supply Change, we help businesses to implement the tools needed to create real social value for the communities they operate in. We talked to Josh Steiner, Social Value & Sustainability Manager at Wates Group about their strategies to make social value a priority.
What is Social Value?
Social Value UK defines social value as “the value that people place on the changes they experience in their lives. Some, but not all of this value is captured in market prices.”
Using social value in procurement means buying goods and services whilst considering the social and environmental consequences. This leverages an organisation’s buying power to create positive outcomes in communities, contributing to the long-term wellbeing and resilience of individuals and society.
Many organisations are now interested in creating social value as a result of the Social Value Act 2012. However, their readiness to adopt social value strategies differs greatly from organisation to organisation. A successful implementation strategy requires an increased understanding of the organisation’s values, beyond their price and cost concerns.
Prioritising social value can shift an organisation’s focus towards employee wellbeing, increasing the diversity of its supply chain. This allows organisations to consider the needs of the communities they operate in and become environmentally sustainable.
A uniform social value approach does not have to be complicated. Here are some strategic areas that can help you make social value a priority in your organisation.
Prepare a Social Value Policy Document
According to the Front and Centre report by Social Enterprise UK (May 2019), two-thirds of local councils have a good understanding of social value. However, this report also found that only 45% of local authorities have a social value policy. To embed social value throughout an organisation, and engage leaders and chief executives in driving it forward as a priority, a social value policy is required.
An overarching set of policies and guidelines that includes sustainability, ethical purchasing and engagement with the local community underpins any successful social value strategy. The goal of the policy is to act as a guiding document, which sets out the organisation’s objectives in terms of economic, social and environmental wellbeing of their local communities. Social value policies should be applied at a corporate and project level and be aligned with local priorities.
It is important to review the policy on a regular basis to ensure that the document supports the organisational social value goals and grows and changes accordingly.
Get Executive Buy-In
Department goals are usually set at the executive level. Senior leaders that understand social value make it a priority across departments. They become responsible for social value targets, organising staff training, and creating a “social value budget” alongside financial budgets. Board members responsible for social value targets can also introduce accountability to the decision making process. These measures will make social value part of an organisation’s culture.
Look for Social Value Procurement Strategies
There are plenty of opportunities to embed social value priorities in every step of the procurement cycle. From simplifying the procurement process to adjusting payment policies to suit potentially smaller suppliers, there are a host of opportunities of adding social value in this part of the organisation.
For example, teams can organise ‘meet-the-buyer’ events tailored for social suppliers (i.e., local SMEs or suppliers who excel in social value maximisation and carry out pre-market engagement activities with them).
Procurement teams can also put social value commitments in their contracts and have social value weighting schemes in place when evaluating bids. Introducing benchmarking across all contracts can lift the social value standards across the entire supply chain and establish best practices throughout the procurement process. A good rule of thumb is to apply a social weighting of at least 10 per cent to evaluating all supplier bids. Introducing these kinds of benchmarks can also encourage large corporate suppliers to subcontract to social enterprises or improve their own social value practices.
Buyers can also highlight to bidders what is most important to them if they want to attract high-quality and relevant social value responses. Once the contract is awarded, procurement teams should have the tools in place to report on the delivery of the social value requirements, alongside the usual contract success factors.
Another way for organisations to maximise social value is through collaboration with partners. For example, a council partnering up with a housing association in their locality can combine their shared spending power to increase their impact. Together, they can also support social value innovation initiatives as founding partners.
The Social Value Act (SVA) furthers the wider strategic objectives of local authorities and the communities they represent. The SVA mobilises a council’s purchasing power to support the social, environmental and economic wellbeing of a community.
The last decade has seen councils’ spending power diminish markedly. As a result, many have looked to more collaborative relationships with providers and communities to address local challenges. Bringing together their collective assets has the potential of delivering increasingly positive outcomes for their residents.
Key to creating this trusting and collaborative relationship will be early engagement and clear communication between organisations and communities. Establishing a timely and continuous dialogue throughout the whole contract management is vital to the success of a partnership.
Monitor and Evaluate your Social Value Activities
As well as creating the culture, policy, partnerships and procurement strategies needed to maximise social value, it is also important to monitor and evaluate the whole process. Social value mature organisations are continuously monitoring the specific social value areas that they have focused on.
They have developed metrics for each area through which they can assess the impact of their social value strategy. Measures are taken at the beginning, during and end of contracts and these are reported on in quarterly and annual reports to stakeholders. The best examples of social value reporting use integrated reporting at a project and corporate level, verify their social value data with external resources and include both financial and non-financial information.
When monitoring and evaluating social value activities keep in mind:
Your community needs.
Clear performance objectives.
Participation and support of a broad cross-section of employees.
Set priorities based on a high/low impact and high/low implementation difficulty matrix.
Accountability measures for commitment and results.
COVID-19 and Social Value
As we find ourselves in this new reality, it is important to recognise the opportunities we have to reshape the world we live in. There are many unknowns at the moment and many committed organisations are at risk of missing their social value targets (e.g. can’t visit schools, can’t do work experience placements). With growing uncertainties, questions about the deliverability of projects are going to have knock-on effects on supply chains. However, these uncertainties also present new opportunities for everyone. A new economy, where organisations place social value at the centre of their strategic planning can create new partnerships, strengthen their role in their communities, improve their processes, and improve the livelihoods of all the stakeholders along the way.
Are you looking to maximise social value in your organisation?
At Supply Change we can help you implement a social value agenda in your organisation. We offer a range of solutions to support you on your journey including spend analysis and support with social value policy writing. For more information visit www.supplychange.co.uk or get in touch via email at email@example.com
We’re also keen to hear from other people and organisations about social value. What strategies have you implemented in your organisation to achieve social value and what worked and what didn’t? How are you measuring social value? What kind of partnerships have you created?