~ 6 min read.
A stakeholder is “a person or group that has an investment, share, or interest in something, as a business or industry”, according to dictionary.com.
Your stakeholders, as the name implies, are the people who have a stake in your business, be it financial - shareholders, investors & owners; commercial - your customers and suppliers or human capital - your employees. They are the lifeblood of your company. It is commonplace to think that a business focusing only on its customers and ensuring they have a great experience will make that business successful and the rest will take care of itself. However, this is a myth as it only paints a portion of the whole picture of how your company operates and its cultural foundation.
Some companies deliberately restrict themselves to focusing solely on customers and see some success, but they usually have to spend a lot of time and energy capturing and retaining customers. Conversely, a company that delivers poor customer experience will either disappear, as customers will seek a better option, or survive solely because they operate in a captive market and there are no alternatives for the customers to turn to. Telcos are a notorious example of operating in a legally-protected market. One only needs to look at their customer service, or lack thereof if we’re honest, they typically provide.
And here lies the problem: without a clear vision, everything else gets muddied, hidden and some stakeholders are essentially given permission to cut corners at the other’s expense for expediency’s sake. We’ve all bitched and moaned about telcos’ inability to relate to their customers on a human level, but these complaints do not come from nowhere. It’s the manifestation of that lack of foresight, which puts them firmly in the commodity box and drives that industry in a never-ending race to the bottom.
The difference between a good and a great company
Great companies, however, take a completely different approach and instead of being only customer-centric, they focus on being stakeholder-centric. They understand that customer-centrism is not a full view of how their business operates because it ignores the other stakeholders. A company without customers cannot exist, as much as it cannot exist either without employees or suppliers. In simpler terms, disgruntled employees or suppliers can inflict as much damage to your business as dissatisfied customers, if not more.
These great companies understand this and practice it everyday. The likes of Whole Foods, Zappos and Vitsoe, to name only a few, have mastered it. They all practice it in different ways, but when looking into what makes them so enduringly successful, you will find that beyond great products or service, their culture is deeply rooted in building and maintaining long-term relationships with their stakeholders.
Let’s take a look at how they do it.
Culture stems from vision
Almost universally, great companies did not start with a great product or service, although they very often have them, but with a great sense of purpose. Their founder’s aspirations to change the world and contribute to the greater good, were turned into a purpose that is easy to understand and get behind. After all, who would not want to change the world for the better? Great leaders have the ability to rally people behind their purpose through various means, but they all have one thing in common, they believe in their purpose so much that they have the ability to effortlessly enrol people in their cause, often with nothing more than sheer enthusiasm and energy.
Apple’s early David vs. Goliath anti-IBM ethos, Tesla’s desire to turn the sustainable energy industry on its head or Zappos’ mission to make online shopping an outstanding experience all evolved from their founder’s profound desire to change the world. They don’t always start the company with a great sense of purpose, but it evolves quickly by necessity, as a way to position themselves uniquely in their respective markets and survive in the marketplace.
A vision, although the extension of a founder’s own moral values, has the ability to unite stakeholders behind clear and honourable values. In other words, it articulates the founder’s own desires and aspirations into a palatable idea that people can easily understand and support. In having an altruistic purpose to follow, it gives stakeholders a moral compass to follow and if aligned with their own values, makes it very easy.
A company’s culture isn’t something that can be described easily, as it pervades every aspect of a business. The ways a company communicates, operates, treats its stakeholders and makes decisions all contribute to its culture. Every company has a culture, some operate by default and others are very deliberate in how they shape their culture. Needless to say that companies operating on a weak or “by default” culture, often face challenges and struggle to make the right decisions because they is no clear framework for decision that has been established.
Although the culture is intangible and shows up in every action of every stakeholders, there are tools out there that will help you shape your culture. Taking the time to define a vision (future-oriented purpose), a mission (what the company does, whom it does it for and how it does it) and core values (the rules of engagement) is a great exercise that will be the foundation of any business.
Making decisions, choosing which customers to pursue, deciding on areas of business development and choosing who to hire all of a sudden become a lot easier, because you now have a framework in place that can be used as a yardstick to make those countless decisions without thinking about it. Surrendering to a great purpose also makes your life a lot easier as we all suffer from decision fatigue. Think of it as a kind of automated decision-making process that takes care of your business.
Some parting thoughts
You may wonder why I spent so much time talking about culture in a writing about stakeholders and may even feel cheated by my cheap ploy. Culture and stakeholders are intimately intertwined as your stakeholders are your agents of culture and your culture guides your stakeholders’ actions.
Even though some people manage to get by without ever making the connection between the two, great companies understand that a culture cannot live on without stakeholders, and vice versa, if what makes the company great is to outlive its founders. I will discuss in an upcoming article the practical aspects of building a solid cultural foundation for your company and some ways you could go about it.
Note: This is the subject of a recent presentation I gave on the topic that delves into this deeper (access it here).
Arnaud Marthouret is the founder of rvltr and leads their strategy, visual communications and media efforts. He has helped numerous architects and interior designers promote themselves in their best light - pun intended - in order to help them run more effective practices and grow in a meaningful way.
If you have questions about this article or rvltr, or want to chat about your strategy and communications, you can leave a comment, share with a fiend, or reach him at firstname.lastname@example.org.