Businesses often consider it a top goal to provide value to their shareholders, but these days it may be just as important to concentrate on producing value for “stakeholders.”
Companies have a plethora of stakeholders, such as customers, employees, suppliers, and local communities, among others; the sum total of which represents a business’s stakeholder world.
How companies make use of those stakeholders — enlisting their aid in achieving the company’s goals — is a significant factor in determining whether the business will be a success.
Every company experiences bumps in the road. Companies that consistently overcome these challenges usually have some help along the way. Maybe it’s a banker who believes in the business. Maybe it’s key customers who support the business even when there are other easier options, or employees who are willing to make sacrifices for the company.
But it’s difficult if not impossible to get people to rally to a company’s cause when its goals are vague and its purpose less than inspiring.
The challenge is to have a purpose that’s meaningful and important to your stakeholder world. What I’ve found is that many businesses start out with a meaningful purpose — they want to make a difference in the world as well as make money — but over time that initial purpose becomes a distant memory and business decisions get focused more on such things as profits and shareholder value.
If a business can identify what its purpose is and frame it in a way that is meaningful and important to its stakeholders, that company can unlock the power and resources of its stakeholder world and amazing things can happen.
Companies with a purpose are on a mission. It can almost feel like a crusade.
And if the stakeholders believe in and share that purpose, they can more easily be enlisted in that crusade.
Business leaders can harness the power and resources of their stakeholder world by:
- Utilizing all of the capacities of your workforce. Businesses need to get the most out of their employees. If employees are inspired by purpose, they will be more engaged in their work and be far more productive.
- Working with suppliers who look out for you. If your suppliers believe in your purpose and join your crusade, they will always be looking out for your best interests. Businesses need suppliers who understand the business and are committed to something more than making money off your relationship.
- Serving customers who are eager to help you deliver a better product or service. Your purpose is an important part of your brand value. Customers who share a similar commitment will be loyal and will promote your efforts.
- Operating in communities where the difference you are making resonates with its leaders and they support your growth. When a business espouses a purpose that a community finds meaningful, the people within that community are more likely to embrace your organization.
- Having partners and alliances that anticipate your needs. One way to do this is to look beyond your current stakeholder world and notice which organizations are pursuing similar purposes. Examine how their efforts can support yours and develop relationships that will support your business model and be a win-win for all.
Every business has the opportunity to discover a purpose that is meaningful and important to its stakeholder world. If you’re selling a product or service that is in demand, then you are making a difference for people. You just need to discover why the difference you make for your customers can be meaningful and important to others as well.
Paul Ratoff is president of Strategy Development Group, Inc. and author of “Thriving in a Stakeholder World: Purpose as the New Competitive Advantage.” Contact him at www.ratoffconsulting.com or strategydevelopmentgroup.com