By Derek Irvine
Recognize This! – Organizations need to provide strong links between stakeholders to ensure that all can benefit from the business.
The Marketplace radio program is running a feature on “The Price of Profits” looking broadly at the purpose of organizations. In a recent installment in that series, the host opens with this question: “Whom do companies serve?”
I’m sure that many of you have a gut answer to that question, whether you believe shareholders, customers, employees or the public good to be paramount. This kind of framing tends to miss the mark, however, assuming that one set of stakeholders should be prioritized over others (a perspective that has persisted across centuries).
The answer as to “whom” in the question above should be plural, rather than singular. We should look towards organizations in their ability to link together value for multiple stakeholders simultaneously.
Perhaps it was easier to have a singular focus in the past, but the modern business environment has made this position untenable. Work today is more complex, interdisciplinary, and interdependent. In addition, the workforce is more diverse and more globally connected. The speed of business has also increased, requiring frequent shifts and pivots.
There shouldn’t be anything surprising in this list, but these attributes come together to create complex organizational systems driven by the interactions and relationships between different sets of stakeholders. Within these systems, it is imperative to link activity in such a way that mutual benefits are achieved, rather than assume a linear cause-effect chain that creates the most value for a single group.
The foundation of these “linking” practices is rooted in finding ways to work human, empowering employees through purpose in their own work and future growth, the contributions they make to colleagues, and their work relationships with both vendors and customers to deliver the best experience.
These practices enable organizations to mobilize and energize employee behavior in a manner that is aligned with organizational values that are both operational, shareholder, and community oriented. That alignment creates the positive effects across stakeholder groups.
Linking practices can span aspects of culture, performance, or social recognition that achieve this desired outcome, and create deeper connections within and between different groups.
The assumptions we hold about whom companies serve are not only a philosophical question, but one that has implications for the purpose we find in work, and the ability to perform in ways that benefit all the stakeholders of an organization.
What practices help you to link your own work with all the stakeholders that benefit from that work?