How A Bank Prospers By Building a Better World: CCMV In Action
Co-Creating Mutual Value
Accelerating the ability of businesses to prosper BY building a better world with their stakeholders.
@AdroscogginBank (www.cocreatingmutualvalue.org )
The idea behind Co-Creating Mutual Value is simple.
A business starts by exploring how the strategy of building a better world can develop prosperity for itself and others.
Next, the business searches for new opportunities (sometimes called “pain points”) within its ecosystem where it can both deal with any material threats AND
-?????? Where it can apply its Core Strengths (tangible and intangible assets, capabilities and aspirations of the people within the business)
-?????? With a high likelihood and level of positive impact for the business and its stakeholders
Then the business, in collaboration with stakeholders (such as the groups who might benefit, NGO’s with special knowledge or relationships, relevant regulatory agencies, etc.), develop innovations (eg- new services, new products, new delivery channels) that will address the “pain points”, ?delivering value for both the stakeholders involved and the firm. Such mutual value is defined by both the business and the intended stakeholder beneficiaries.
Value for the firm can include any of the following: revenue growth, market share, share price, cost reduction, improved quality, enhanced safety, increased retention, ability to hire best talent, a culture of innovation, new or stronger relationships within Sysco, or with stakeholders in your ecosystem, capacity for resilience/agility, enhanced brand recognition/customer loyalty, increased employee commitment and engagement or any of the many other metrics for business “prosperity”.
Value for the intended stakeholder beneficiaries can be expressed in their own words but is usually related to one or more of the United Nations Sustainable Development Goals https://bit.ly/3qKjtez
Implementation of the innovations is supported by “generative evaluation”, ensuring the relationship between the firm and its stakeholder partners continues to be strengthened by a process of reflective learning which builds energy and concreate plans for next steps, including scaling of the work.
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WHAT DOES THIS LOOK LIKE IN PRACTICE?
(This case story is based on an article that appeared in the Portland Press Herald on how Islamic Mortgages are providing new home-buying opportunities for some of Maine’s muslim immigrants)
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The Androscoggin Bank, a regional Maine bank, ?(https://www.androscogginbank.com/ ) is a certified B-Corp (https://www.bcorporation.net/en-us/ ). For them, this means “challenging ourselves to reimagine and reinvent the experience of community banking for our clients, our employees, and our community partners, …”. In other words they have committed to pursuing the creation of value that includes but is not limited to the bottom line.
Through listening to community voices the Bank became aware of a “pain point” that it could address for mutual benefit. It had to do with an absence of banking products that made home buying possible for the growing immigrant community of devout Muslims in Maine “According to the Koran, charging or paying interest is considered exploitative and sinful because it promotes inequality, increasing the gap between rich and poor… for devout Muslims, avoiding interest keeps them from accessing a wider economic system where buying a house is a significant step toward financial security” and the sense of belonging that comes from the American Dream of home ownership
Once this opportunity (ie pain point) was well understood the bank worked with the Maine Bureau of Financial Institutions, the Federal Deposit Insurance Corporation, local immigrant leaders, and NGOs such as ProsperityME, a nonprofit that helps immigrants build financial independence). Additional community meetings were attended by hundreds of people.
Over the course of a year, the Bank developed a new “halal” product where its loans avoid charging interest by having the bank assume full or part ownership of the home. Over time the co-owner, (the ultimate owner) buys out the bank's stake. The bank also hired an Ethiopian immigrant with decades of banking experience to provide personal banking services to its Muslim clients.
These small but significant innovations meet the requirements of Sharia Law, generate a new income source and client population for the Bank; and a new group of homeowners is created from people previously stuck in rental units.
And, non-Muslims are also eligible for this new product, creating further value for the bank and the communities it serves. The Bank is currently exploring possibilities to further scale these innovations by adapting it to businesses, students and others.
?Abeza (a social worker in Portland) and Mutamuliza,( a medical records processor with Maine’s largest hospital system), closed on their first house earlier this year. A dozen more homes are under contract or waiting to close with pre-approvals.
Reflecting on his experience Abeza said, “We are here. We are grounded. Owning a home means a lot”. Sophie Mutamuliza added “Now we belong in Maine. We are here to stay”
While understandably hesitant to reduce their competitive advantage by describing the details of their new product, the Bank CEO, Neil Kiely, adds “We felt it was incumbent upon us to ensure that this community had an opportunity to fully participate in the economic system. The more we can assist them to participate fully, the more it’s a win for the State of Maine”
?Of course, it's also a win for the bank’s shareholders.? That is a key element in the co-creation of mutual value work as a business strategy.
PS: We are grateful to the Portland Press Herald and the initial reporting of this story by Kelly Bouchard, reachable at [email protected]