John Newby: Locally owned businesses at war with Wall Street

Clayton Christiansen, a great business mind and former Harvard Business School dean, once said, “The reason why it is so difficult for existing businesses to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business model actually make them bad at competing for the disruption.”

When you couple this statement with an article I recently read in Forbes, you will have a recipe for disaster looming for many local communities.

The article in Forbes encouraged readers to take advantage of shopping online via e-commerce. While it touted Amazon and its Wall Street friends, no reference of any local community was found.

Communities will have difficulty building Main Street while being pummeled by Wall Street. Intentional or not, Wall Street is coming after every dollar from your community it can get its hands on. The pressure from shareholders is increasing. This e-commerce attack, which is in its infancy, will spell disaster for many local communities across the country.

Don’t think for one minute that big government with sweetheart deals from Wall Street lobbyists will come to your rescue. As the lockdowns showed, local businesses were forced to shutter their doors while many of the Wall Street corporations were deemed essential and continued to stay open and, in most cases, thrive. The real kicker is many local governments blindly followed this path, unknowingly destroying their local business base while becoming a major exporter of local dollars to Wall Street. Communities must view this as war; your opponents on Wall Street do.

What can local communities do in light of this e-commerce assault on their local base?

First, sustainable community initiatives need to be led from the top. Community leaders must act now. By community leaders, this means city leaders, business leaders, the chamber, civic clubs or organizations, media and other influencers. They need to convene a special meeting with “saving local businesses” as the sole topic and develop a strategy forward for local business.

Second, leadership needs to come up with community initiatives to assist locally owned businesses. At this point, it may prove difficult to enact something that is effective by the Christmas shopping season, but getting the process started is a must. Always remember, even if you fall a bit short, anything will help.

Third, these initiatives should be employing year-round efforts, not just a token “Shop Small Saturday” or “Christmas Bucks” type of program. Those programs are a start, but won’t do a thing to build loyalty, habit, and long-term sustainable shopping patterns throughout your community. Think yearlong promotions, incentives, games, contests and so forth. This is where a solid partnership between local chambers, news media and business can create synergies and build foundational support.

Last, don’t be afraid to reach out for help. There are many communities that have done outstanding things in support of their local business base. Most are more than willing to share their ideas and strategies. In fact, send me an email and I will provide many ideas, suggestions, and thoughts to get you started.

The key to success is to get started. Commit your community to answer the battle cry and do not succumb to inaction and lack of initiative. Anyone can lead during the good times; great leaders are those who step up during the tough times and lead. Six-time MVP Michael Jordan always wanted the ball when the game was on the line; he was willing to carry the team when it needed him the most. The role of community leadership is to provide that leadership during crunch time as well.  

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