Showcasing value beyond social impact

According to Reconciliation Australia, over 1,100 corporates have referenced their commitment to First Nations reconciliation through the creation of Reconciliation Action Plans¹ and by building commercial relationships with First Nations businesses. The real level of commitment and intent of these companies to create meaningful value by trading with these First Nations businesses and in aligning with the objectives of these RAPs can be difficult to determine.

Scott Allen, Awabakal Worimi descendant and CEO of Mandura, reflects on the challenges that many companies with RAP commitments face in valuing their First Nations business partnerships solely through the lens of the social impact created. First Nations entrepreneurs need to change the conversation and focus of the relationship.

The challenge

Increasing social targets in procurement processes has resulted in the rapid growth of Australia’s First Nation businesses and encouraged emerging entrepreneurs to launch business initiatives. Shifting First Nations focus from a purely profit-driven approach to one that includes community, the environment, and support for future generations is beginning to have an impact, though it remains a difficult transformation.

“Companies frequently appear to evaluate a First Nations business by asking a single question: ‘How much do they give back to support First Nations communities, causes, and people?’ Because no other commercial business is valued in this manner, this approach, by definition, undermines the essential characteristic of the First Nation business being economically viable in the long term,” says Scott.

The intrinsic nature of First Nations businesses

Scott says that First Nations businesses are often complex because it must have both real social impact and economic value for its shareholders and the corporations with which it does business.

“Over the years, I have had numerous conversations with various companies that want to work more closely with First Nations businesses. Many companies are keen to support First Nations businesses and their social goals, but the real decision is driven by pure economics and cost implications. This conversation highlights the incongruity of supporting the idea of these businesses having a meaningful social impact while still being able to compete on a level playing field,” says Scott.

Then, how should organisations engage with First Nations business?

If a company implements a RAP and is truly committed to change, it must recognise and act in a way that acknowledges the cost of creating social impact for First Nations businesses. “Businesses need to consider the overall value created, which includes both commercial and social returns, by trading with First Nations communities. Ensure your decision-making criteria reflect this. The key criteria should be how this engagement will truly impact both their performance and the achievement of their CSR objectives,” advises Scott.

Understanding your impact

“Dealing with responsible and enlightened customers who measure the overall value proposition of these First Nations businesses that want to create a sustainable and meaningful impact for community and build something of value for future generations is critical to the success of both parties,” says Scott.

Scott’s advice to aspiring First Nation business owners? “Be very clear on your value proposition and learn to communicate it effectively. Reflect on what you want to gain for yourself as well as the larger community you want to help – be clear about your overall goals, their value to your customers, and be in business for the right reasons.”