Monday, November 24, 2014

Company and Community, A Mutually-Supportive Relationship

Old companies see their local communities as an important partner in their ongoing success. Because company leaders see the firm as an integral part of a web of relationships (often connected to family history and reputation), their relationships within the local community are just as important as those with business transaction partners. These community relationships include support of social organizations as well as those with business and government groups.

Old companies tend to be much more active participants in their local communities than other firms, promoting the community and developing local networks for mutual learning and benefit. They believe these connections with people in other industries and across generations have a positive influence on the reputation of their firm and they also see the positive influence on their business that comes from the local community's good reputation. I have numerous stories from my case studies of companies investing in their community in projects such as revitalizing their downtown, building programs in local schools, supporting various non-profit organizations, giving employees time to serve on local government commissions, etc. Most of these efforts were long-term investments and most had little or no immediate (or even long-term) financial benefit to the organization. The old companies see this involvement as an obligation that comes with being a part of the local community, but they also believe that such investments pay off in non-tangible benefits to the organization in the long run. These benefits may show up as mutual learning around new technologies and opportunities outside the company's industry contacts, or building a reputation that helps attract the best employees, or in streamlined government approval for local infrastructure projects.

Local communities are often the first to see the adverse effects of a company's demise, whether through failure of the business or its acquisition by another firm. Loss of jobs, loss of tax base, and loss of support for local organizations can be devastating to a community.

Old companies recognize the value of the community outside their business or industry and invest time and resources in projects that develop and sustain them. They see themselves as important members of their communities and wouldn't even consider pulling out and moving to another state or country for a tax break or lower labor costs. They know that a vibrant local community benefits their company and the community understands that a healthy, successful company benefits them as well.

In my research, old companies scored significantly higher that other firms on every question in the survey relating to building relationships within their communities. Whether it was participating in business-related organizations such as the Chamber of Commerce, building personal connections with people in other industries, or being involved in projects that build and promote their local community, the older companies clearly see themselves and their communities as one.

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