Guest post from C3MD member Danielle Marshall.
Conscious Capitalism is a business model that strives to prioritize the needs of all stakeholders involved to create value and profits for everyone. Through a better understanding of their stakeholders’ needs and consideration of their decisions’ impact on them, companies can make choices that benefit everyone in the long term. To do this, Conscious Capitalism focuses on four pillars: Higher Purpose, Stakeholder Orientation, Conscious Leadership, and Conscious Culture.
In this article, we will explore strategies to deepen Stakeholder Orientation practices by reenvisioning what it means to be a key stakeholder and how we can begin to make the process more equitable.
A strength of the Conscious Capitalism Stakeholder Orientation is the emphasis on creating value and care for all by taking into account the interests and needs of its stakeholders. This approach recognizes that businesses are part of a larger societal and environmental context, further understanding that company decisions ripple out and impact the people they work with and those who utilize their products.
To build trust and opportunities to collaborate in service of our stakeholders, we must first identify who they are.
Identifying and Prioritizing Different Types of Stakeholders
When businesses are asked to identify their stakeholders, it is not uncommon for them to list off the usual suspects; shareholders, customers, financiers, and to varying degrees, employees.
While each of these groups certainly meets the criteria of being a stakeholder, other groups often get forgotten or overlooked. These may include suppliers, communities, government, policymakers, media outlets and influencers, as well as nonprofits and environmentalists.
Even well-meaning business leaders can quickly become overwhelmed by the number of stakeholders to attend to when faced with the company’s day-to-day management. If this sounds familiar to you, consider prioritizing when and how you approach the goal of effectively engaging stakeholders.
As a first step, companies should assess their resources and infrastructure to implement the principles of Conscious Capitalism. This assessment should identify any gaps that need to be filled for meaningful engagement with stakeholders to take place. Without the proper support, businesses may struggle to understand the needs of their stakeholders and make decisions that benefit everyone in the long term.
Engaging Stakeholders: Questions To Consider
- Does our company have access to resources human and financial to commit to a meaningful engagement? If we have identified gaps, which can we fill in for the short term and which may require a longer on-ramp?
- Have we established systems to document what we learn about the needs of each stakeholder group? How will we review this information? Who will share the insights gained?
- What is our plan to outreach to each stakeholder group? What messaging needs to be considered, and in what order will outreach be conducted?
- Do we have a plan that extends beyond active listening to include how we respond to learnings?
As you map out your responses, you may still run into the issue of how to prioritize the various groups. This is where a shift in mindset may be needed. The work of holistically engaging our stakeholders is more of a marathon in nature and less of a sprint.
Businesses may find it difficult to prioritize when faced with conflicting interests from multiple stakeholders. For example, shareholders may need immediate returns on their investments, while employees may need higher wages or better health insurance. It can be challenging for businesses to balance these competing concerns ethically while still creating value for all stakeholders involved. There is no magic bullet here, yet with intentionality, thoughtfulness, and ongoing commitment, you can take advantage of a phased process that moves us away from either/or thinking to a both/and approach.
Apple Inc. is one example of a company that utilized a both/and approach in prioritizing competing stakeholder needs. When the company was facing pressure from various stakeholders to address its environmental impact, it had to find a way to balance these growing interests without compromising on its commitment to innovation and product quality. It recognized that environmental concerns were important but also had to consider the needs of its customers, shareholders, and employees when making decisions. This led to the introduction of renewable energy sources and the incorporation of eco-friendly materials in their products. Apple was able to make decisions that addressed stakeholder concerns while still meeting its own business objectives. (Access a recent ESG report here.)
In The Face Of Competing Priorities, Where Do We Start?
The strategies below are offered as a starting point for fully engaging your network and should not be viewed as all-inclusive.
- Prioritize stakeholders with the most direct influence on your business goals and consider those who are decision-makers or have access to decision-makers.
- Expand your stakeholder engagement efforts to include historically excluded groups. If you need help figuring out where to start, focus on building relationships with key influencers and partners. Not having existing connections with these groups is where you may find yourself today. Deciding to reach out and build these relationships is a choice moving forward.
- Engage with stakeholders that can provide valuable insights into your market, customers, and competition while considering what voices might be missing from the conversation.
- Connect with stakeholders who will help you achieve long-term growth and sustainability while considering previous feedback received and groups you have yet to engage.
- Use data-driven insights to inform decisions about which stakeholder group should be prioritized first, taking care to ensure all stakeholder groups, including historically excluded ones, are included in the dialogue and decision-making process.
An example of this approach can be seen in the work conducted by The United Way. For the last several years, regional offices of the United Way partnered with hundreds of different local organizations through their “Community Conversations” to better understand the needs of their respective communities. (An example of this work can be seen here). Through this partnership, they were able to collect data on everything from housing needs to employment opportunities and healthcare access. The success of “Community Conversations” was in part driven by the diverse group of community members that were brought together. By better understanding their stakeholders, this initiative allowed The United Way to create more comprehensive solutions tailored to each community’s specific needs.
Engaging stakeholders is a complex process that requires careful consideration of resources, systems, and data-driven insights. By understanding the needs of each stakeholder group, businesses can build relationships with key partners to ensure all voices are heard in decision-making. Though it may be daunting at first, if companies prioritize their efforts toward building meaningful connections with stakeholders, they will reap long-term rewards such as increased growth and sustainability. Conscious Capitalism provides a framework for achieving these goals while balancing competing interests from multiple parties involved. With intentionality and commitment, you can create value through holistic engagement and move away from either/or thinking to a both/and approach.
About the Author
Danielle Marshall is a Racial Equity Strategist, and Executive Coach focused on strengthening collaboration in organizations to foster creative solutions and improve culture. She founded Culture Principles in response to a persistent need to move organizations beyond DEI statements to develop strategic and actionable equity goals. Danielle’s work inspires her daily, and she is committed to promoting systemic change that promotes equity and inclusion.
Thank you to C3MD member Danielle Marshall for this post. If you are interested in submitting a guest blog post please reach out. We want to hear what you have to offer!
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