Last month Verizon released its 2011 Annual Report. Amidst this integrated report of financial and corporate responsibility is found the launch of Verizon’s “Shared Success.” While the idea of “Shared Success” is new, it’s only the most recent step Verizon has taken on a long journey toward creating shared value. FSG has been working with Verizon as it builds its Shared Success effort, giving us a great viewpoint into this journey.
The company has long been a major player in social responsibility – its foundation gave out $66M last year alone. In 2010, then-CEO Ivan Seidenberg announced that Verizon would “Tackle the World’s To-Do List” by using its broadband infrastructure and technology to address such social problems as education. Now, with the release of this report, Verizon and new CEO Lowell McAdam have taken this $110 billion dollar company (16th in the Fortune 500) one step further. The company has signaled a long-term commitment to product, value chain, and environmental innovation along with new ways of measuring, partnering, and coordinating these initiatives.
Verizon’s Shared Solutions seek to create new products and services that have the potential to unlock enormous revenue potential for the company while also creating lasting benefits for society in the areas of energy efficiency and health care. For example, Verizon’s new telehealth services will serve unmet needs by linking doctors to their patients remotely; these services will seek to decrease costs while improving quality of care, and in doing so, open the door for billions of dollars in new revenue by 2015. In energy efficiency, Verizon‘s machine-to-machine technology is modernizing energy and transportation infrastructure.
Verizon’s Shared Service activities will enable Verizon to use its philanthropic assets to provide needed services to overlooked communities, while at the same time creating R&D incubators for technology-based solutions in healthcare and education. This is a good example of how a corporate foundation can accelerate shared value approaches. For example, the Verizon Foundation and the University of Virginia are sponsoring nursing programs in rural areas to train medical personnel in emerging telehealth technologies, creating a unique cluster of interconnected firms and professionals skilled in using telehealth technology. Through this grant, thousands of underserved people gain better access to high-quality health care and Verizon learns about the needs of this newly integrated telehealth cluster. Insights can be applied to its business on a wider scale.
As part of its Shared Sustainability goals, the company has committed itself to reducing its “carbon intensity” (energy use per terabyte of data flowing through Verizon networks) by 50 percent by 2020 and by 2015, 15 percent of their vehicle fleet will run on alternative fuels.
As Verizon innovates with Shared Success, the company is experimenting with new management approaches. It has set up a Shared Success Council to coordinate its activities. The council reports directly to the CEO. Verizon has also pledged to measure the economic and social benefits of these new initiatives. This will not be easy but the company is committed to figuring it out.
Keep your eye on this 125-year old company as it will serve as a shared value learning laboratory for other major corporations seeking to gain competitive advantage by tackling social problems.