Injecting sustainable socio-economic development into an African company’s DNA is not just good practice, it’s good business.
By Anthony Worku
After spending countless hours in the boardrooms of Fortune 1000 companies around the globe helping CEOs realize their goal of maximizing their shareholders’ return on investment over my 20 year career in business technology, I started questioning if this model works for African companies. If only businesses are able to produce large-scale prosperity in the global capitalist system that prevails, then what role can African CEOs play in the socio-economic growth of their homelands?
In my search for answers, I made frequent trips back to Africa and looked at how and why African countries grow despite centuries of colonial-manufactured underdevelopment and decades of systematic exclusion in the global trade economy. I realized that as diverse and complex the continent is, Africa shares a unique, common characteristic; the innovative talent, resilience, and adaptability of its people. The current digital revolution in Africa is proof of this, as it has become a socio-economic equalizer and African tech entrepreneurs are thriving. This phenomenon made me realize that Africa can and will be its own salvation; the continent just needs to strengthen its own consumer-base. We need stronger buying markets. “Who has the interest and ability to make increasing peoples’ buying power part of their core values?” I asked myself. It is African businesses and chiefs at their helm.
This idea is certainly not new. The concept of creating shared value was pioneered by Michael Porter and Mark Kramer in a 2011 field-defining Harvard Business Review article. Shared value theory makes the argument that CEOs should aim to enhance the competitiveness of their company while simultaneously advancing the social, economic and environmental conditions in the communities in which they operate. Essentially, CEOs should change how they measure return on investment, and expand their definition of ‘shareholders’ to include their employees, local communities, and the planet. While businesses in the West face the challenge of reinventing themselves, reeducating their shareholders, and changing behaviours and practices, Africa has the advantage of being a clean canvas. African CEOs can develop business models and acquire their primary customer bases with shared values theory at the core.
On a continent rich with natural resources and opportunity yet lagging far behind in development, it is time for African CEOs to heed the call to create shared value for their countries. African societies have a plethora of social and economic needs like health, education, nutrition, and employment, and with a population of over 1.2 Billion across the continent, there’s a high demand for solutions. In countries with pervasive poverty, inefficient governments and largely ineffective NGO efforts, it’s time for a new model of radical transformation and socio-economic uplift. As long as Africa’s top economic development talent is working in government and the nonprofit sector, the continent is losing money. Businesses have an opportunity to innovate models for growth that align financial gain with social impact. It’s challenging, but possible and powerful. Here’s an African CEO Shared Values How-To:
Localize Your Leadership.
The GDP per capita of a country has a direct impact on the value of a company in its markets. When consumers have low buying power, private sector companies won’t grow. African CEOs should contribute to the GDP per capita of their countries, starting with increasing the buying power of their employees by investing in their socio-economic well-being and that of their families and communities to fill the void of poor social services delivery. Investments into human capital can take many forms. African CEOs should hire for potential, not skill, and instead create the workforce they need by training low income, high potential candidates in their local communities.
Be Motivated By Mission.
African CEOs should ask themselves: are my employees our customers? Can they afford our product? If not, their employees are either not paid enough, or the product is not affordable enough. African CEOs should be proactive in entrenching sustainable development values as part of their core mission and business model. Start by identifying potential customers who are currently socio-economically disadvantaged, and making them your target customers. Then, reallocate a portion of your budget towards making your product affordable for them.
Empower Your Best Assets: Employees.
Africa’s best resource is its people. Resourceful, innovative and talented employees should be engaged in finding solutions to the problems their communities face. Through their employees, African CEOs should have direct engagement with their target customers, understand consumer pain points, and design solutions for them. CEOs should strive to create a solutions-centered workplace culture where Google’s 80:20 rule is universally adopted. 80% of employees’ time should be spent on daily job tasks, and 20% on solution ideation and innovation. If this is done well, product development and consumption will be localized, and employees will create market-fit products that they will buy.
Insert tech innovation into Your Business Model.
In Africa, technology is a business accelerator, not a mere tool. With 747 million mobile users on the continent, the market is prime for disruptors who understand and innovate for the African context. Africa’s CEOs should be innovators at heart, and the key to innovation is to recognize customer problems and turn them into revenue-generating solutions. New technology innovations have been disrupting whole industries across the globe for decades. In Africa’s current digital revolution, we have the opportunity to disrupt systemic inefficiencies by inserting tech into our business models.
Catalyze Socio-economic Mobility in Africa.
Businesses that address existing socio-economic needs as part of their model of operation create shared value by generating profits while also improving the lives and livelihoods of their target local communities. If all of the checklist items above are completed, then the value of African companies will inevitably increase exponentially. African business profitability will no longer rely on export economies, and instead be propped up by consumers in their own backyard.
The stakes are high, and the potential is limitless. On a continent brimming with talented business leaders, and an abundance of potential customers, creating shared value in business sectors will enable the economic independence of Africa and the freedom of its people. Private sector leadership, it’s up to you.
Anthony Worku is an Ethiopian-American serial tech entrepreneur and the founder/CEO of BeeZ Social ERP and BizDate. With 20+ years of experience working and innovating in the technology industry, his unique path and experiences as an insider in the corporate world and an outsider in Silicon Valley have shaped his passion to open doors for the next generation of African tech entrepreneurs. He co-created the African Tech Got Next concept under the Kudu Ventures VC umbrella to move this mission forward on global platforms.