Managing the “Community” in Community Business

Running a business accountable to a community is hard, whether it’s an Indigenous corporation or an artists’ collective. Not only do you have to manage the business successfully, but you also have to address the expectations, aspirations and needs of the community. Managing this relationship well means that the business can draw on the support, knowledge and connections of the community, but managing this relationship badly can destroy a business. I’m reminded of this as I’m preparing for a workshop with an Ethnic Minority community enterprise start-up we are supporting in the Vietnamese uplands, and I wanted to share a few lessons from my work in Australia, Canada and here in Southeast Asia.

Manage expectations about the likely benefits from business – Many community members have unrealistic expectations about the profits and income that flow from “business”. Setting up and running a successful business – any business – is hard. 90% of start-ups fail. Given you are likely going to be working with a disadvantaged group, your productivity is going to be lower than a normal business, and so is your profit. Instead, stress that the impact is going to be in employment, contracting and training outcomes, and the way you make it easier for the community to look after their cultural and environmental assets.

Create specific channels for community engagement – I’ve seen the full range of transparency from so secretive they don’t even have a website, to public meetings about minor operational issues. The right amount of transparency involves being open and honest with the community about performance and key decisions, but ensuring that organisational decision-making is focused on creating a business that is successful enough to deliver benefits to the community. In order to maintain legitimacy, there should be specific opportunities for the community to provide input and get information, whether it’s a community meeting, a contact point or just good social media engagement.

Communicate business and social performance simply and visually – Having a holistic set of targets to report against that cover both financial performance and community impact is important because a) it’s easy to get caught up in challenges and forget about your achievements, and b) it’s easy to only focus on one aspect of success. Remember that you are a community business – and you need to deliver on both sides of the equation. Performance metrics, even technical financial ones covering things like cashflow and ROE, can be communicated visually using infographics, so that the influential members of the community, even if they don’t have good technical literacy, can see where you’re doing a good job and where you need to improve.

Send governance time on rules, not issues – It’s easy for the board and the senior staff to spend a lot of time responding to and managing individual community members’ gripes when they themselves are part of, or have close relationships with, the community. The same community issues will come up again and again when there aren’t clear rules on how a type of problem or opportunity should be responded to. The board and senior staff should work together to have clear policies and rules in place on employment, remuneration and other contentious areas – and empower their staff to act on them. That way, when someone raises an issue, the response is always – refer to the policy.

Treat the community as an asset, not a liability – Successful community businesses are able to draw on the unique assets of the community to create a product or service that a mainstream business simply can’t replicate. The community is both your competitive advantage and your unique selling point. It’s the business’s source of talent, knowledge and motivation (and frequently, customers) – and it has to be at the core of your value proposition. Be there for the community when they need you and they will be there when you need them. Simple.

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