Job creation: an engaging business purpose

In my interviews with managers from sub-Saharan African countries, I was surprised that – without my bringing up the topic – a large majority of them made a comment of this sort: “You know, what drives this company is job creation… Of course, we want to make money, and we do make money, but what really, really drives us is to create jobs…” In sharp contrast, managers from foreign companies (I will not specify from which country, but you may guess) were telling me (again, without my asking): “We are here just for the profit, we don’t care about anything else…”

Job creation drives many companies in SSA
Job creation drives many companies in SSA.

Job creation drives many companies in SSA.

What’s the purpose of a business? If your answer is “maximizing shareholder value,” do you think this is an engaging purpose? It may engage some shareholders, but I don’t think it engages other stakeholders. For a company to be successful, contributions from other stakeholders are as important as capital investments – especially so contributions from employees. I believe that for most employees job creation is a more engaging purpose than shareholder value maximization.

Don’t get me wrong: companies ought to create value, and that’s a critical part of their social mission (unless it’s an NGO or a similar type of organization). But, is the value created just for the shareholders? What if we enlarge our vision, and think of creating value to be shared among the various stakeholders? Those providing capital to a company are risking their money, and of course they should be compensated for taking that risk. Those supplying their work are contributing their own lives, and should be compensated accordingly. In turn, they will be more committed to contributing to their company’s success, and the business will be more sustainable over time. Needless to say, this is an oversimplification of a more complex argument. But, wouldn’t you agree that employees are something more than just one cost item in the value creation equation?

I found it quite refreshing that there are so many African companies aiming at creating jobs: there is something to learn here, isn’t there?

8 thoughts on “Job creation: an engaging business purpose

  1. Very interesting inside which show us a different side of the same coin. Of course how to pass the message through is even more important than message itself. Finally the idea is to spread growth mentality inside our organisations, what can be the better than do it motivating our teams considering cultural differences.

    1. Yes, although I think that some purposes are more “Valuable” (with capital V) than others independent of cultures: a purpose that takes into consideration the well being of all human beings and in all of their dimensions is more likely to bring out the best of ourselves independent of cultural differences. Unless the culture we live in has stifled non-economic motivations totally.

  2. Africa, of course behind each employee there is a life and many important things to take into consideration. And when some of your experiences give you this income that what drive companies is job creation, at the end is absolutelly true. Who else is driving companies? People are the ones. Employees are the keys for any development. Creativity, innovation, connectivity, everything flies around employees. So it is clear that people well trained, motivated and ready to overpass challenges will be the ones that will bring value for their companies. But tthe reason of creating value is something I see different. The only one reason a business goes ahead and creates value is due to its CUSTOMERS. So next future will be plenty of actions that will make closer the companies and corporations to their customers. That’s for me the real reason of company’s existence.

    1. Hi Jose Pedro, your comment brings us to the whole issue of value creation and value capture: indeed, value es created by offering products/services that cover customers’s real needs (I can’t disagree to this!), but the value so created is to be shared among the various stakeholders.

  3. Africa, this is a very interesting point raised. I think that job creation is a very important driver for some Spanish companies too, probably this driver is stronger in Africa.
    However, I have seen job creation as an important purpose in two different situations in Spain: (i) family owned companies for which job creation and growth is really important as it has a significant impact in their community, where they have an important role as job creators;
    (ii) start ups in the middle of the economic crisis which have been able to create jobs just when all other companies were dismissing people. This is an important purpose for the entrepreneurs to move forward and keep growing. In both cases, I have seen employees that seem much more engaged than those in a multinational only driven by EBITDA and returns for shareholders.

    Thanks s lot for this blog Africa!

    1. Good to hear from you, Oihana! You bring up great examples of companies which have tipycally a purpose beyond profit making — as some people say, “companies with a soul.” Thanks for you comment!

  4. i wish more politicians knew this axion “job creation drives the economy” not protectionists tendencies, corruption & nationalizing companies

    1. That’s right: politicians should be busy trying to create the conditions that enable employment and business growth.

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