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Why Smart Companies Empower their Communities

Dong Won Lee - LG EA Managing Director-min

By Dong Wong Lee

Corporations have never operated in isolation and that contrast has never been as evident as it is today. They exist within interconnected ecosystems that include a variety of stakeholders, from customers and suppliers, to local communities and global networks. This intricate web of interactions requires a broader perspective on corporate responsibility; one that goes beyond profit-making and embraces a commitment to the well-being of society as a whole.

Sustainability has often been narrowly associated with environmental stewardship with the conversation revolving around reducing carbon footprints, managing waste, and conserving resources. However, true sustainability includes the dimension of community empowerment – holistic investment in the wellbeing of the communities in which organisations operate.

Consumer preferences have shifted over time, especially as millennials and Gen Z gain more purchasing power and social influence. There is increasing focus put on the values espoused by corporations and the value they bring beyond their products or services. By demonstrating commitment to shared values such as community empowerment, businesses are better poised to attract and retain loyal customers.

Furthermore, empowering communities has profound strategic value for businesses by building communities where they can thrive. Members of the public who see that a business shares their values are more inclined to buy from them, and also become advocates for the brand.

Additionally, community empowerment is crucial for attracting and retaining top talent. A 2024 study by Deloitte found that millennials and Gen Z, who make up a majority of today’s workforce, prefer to work for organisations that have a purpose beyond profit and prioritises positive community engagements.

Investing in community empowerment also enhances a business’ risk management and license to operate. Positive relationships with communities reduce the risks associated with social unrest, regulatory challenges and reputational damage. A proactive approach to community relations positions a business well to ensure operational continuity and long-term success.

Crucially, however, these benefits can only be enjoyed through careful application of community support initiatives. Collaborative approaches that treat the projects as partnerships are key. The most important facet of designing effective community empowerment strategies is listening to the community about its challenges and working with them to design solutions that work for them.

Too often, management experts in boardrooms identify challenges from their points of view and prescribe solutions that are not tailored to the beneficiaries. Despite the noble intentions, such an approach often leads to low engagement and ownership.

This collaborative spirit is precisely what LG Electronics East Africa prioritised in the recent “Smile With LG” campaign. Instead of identifying problems and prescribing remedies, the campaign raised funds for projects that were already operating. Customers purchasing LG products voted for one among a host of good causes, with each vote contributing KES. 5,000 towards a total donation. In the end, Gathiga Children’s Hope Home, the Maktaba Project, and Oldorko Mosiro Primary School each received a share from the total KES. 6million purse.

Fundamentally, empowering communities is an ethical imperative that goes beyond strategic benefits for the business. Corporations, given their resources and influence, have a responsibility to contribute to societal development. This ethical stance not only resonates with customers but is also quickly becoming the norm for other stakeholders. For instance, the Nairobi Securities Exchange now requires listed companies to provide annual reports on their Environmental, Social and Governance (ESG) initiatives.

Ultimately, by taking a proactive stance on community empowerment, companies affirm their role as responsible corporate citizens. Companies that understand the interconnected nature of business and community will not only contribute to a more sustainable world, but also create an ecosystem where they can flourish.

Mr. Lee is LG Electronics East Africa Managing Director.

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