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.
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?