We expect greater accountability of the companies that enjoy our tax breaks, consume our resources, raise capital through our markets, and benefit in other ways by doing business in our neighborhoods. Most major companies launched social responsibility initiatives (or at least PR campaigns) before the September 2007 meltdown to demonstrate they understood this. But the bar is higher now that so many bedrock institutions have become beggars at the public trough. So, what are the implications for big companies? This time around, Corporate America may have died along with the idea that markets can be self-regulating.
If pendulum were to swing back toward decentralization, it would provide a way to for companies to get closer, and more accountable, to the customer and other constituents. Networking and technology provide the tools to enable many of the benefits and avoid at least some of the costs of taking a decentralized, locally focused approach to business. This is why I think local may be the new black.
There are real advantages to supporting local businesses – decisions are made locally and the people who work there are personally invested in the community since it’s where they live. In return, they support the schools, the local kids’ sports leagues, and more.
But what does local mean these days? Does it mean not-chain-store? Does it have to do with the type of real estate – not a mall? Is it about local ownership? Is it physical? I think it’s more a mindset… a commitment to serving the community, regardless of ownership, type of real estate, or number of locations. The challenge is to deliver that local, home-town feeling (regardless of where you’re doing business) consistently across locations.
Who’s doing this today?
- Real estate offices (including the regional chains) get it, and always have – they are all about the local economy they serve and are well-aware of the differences between neighborhoods.
- Local grocery stores – unlike Safeway and Whole Foods, Mill Valley Market and Molly Stones support most community events with cash and in-kind donations and they stock unique merchandise at customer request.
- Community banks & credit unions – their point of differentiation often is their support of the local economy or workers. Given their greater insight into the local market, they are more likely to make loans in today’s anti-lending environment than the big banks. And they’re getting no bail out money!
- Privately run enrichment programs for kids – preschools, arts & crafts programs and others like them cater to local families. There are good reasons why Steve & Kate’s Camp, West America Tae Kwon Do, and others like them are long-lived institutions in our town. They fill a need and make our lives richer.