We believe that creating products and services that enrich the lives of others starts with a stakeholder-focused approach rather than a shareholder-focused one. Whether you’re just starting out or you’re a global brand in need of a refresh, it’s important to remember why you do what you do and who you’re doing it for.
Shareholders vs. Stakeholders
But first, let’s break down the corporate jargon.
Who are shareholders? They’re the individuals or institutions that own shares in your company. This grants them certain rights, like voting on important company decisions. While their insights are valuable, however, shareholders tend to be hyper focused on finances – and this can lead to a host of issues, from a diminished creative vision to burnout amongst your team.
So, who are your stakeholders? They’re your employees, and – depending on your industry – they’re your customers, your donors, your subscribers, your patients, your guests. They’re the individuals working for your brand or engaging with your brand. And focusing your efforts on their needs is key to building a brand that impacts the world for good.
Let’s take a look at all the ripple effects that can flow out from this shift in focus:
1. Increased Team Engagement and Productivity
A full-time employee spends a third of each workday at or remotely working with your organization — a third of their day with you! Creating a space where work is purposeful, employees are respected, and growth is championed leads to a feeling of mission, which leads to team members bringing their best each day.
2. Increased Attraction and Retention of Top Talent
Happy workers talk to their friends, and that can draw top talent to your org. It can also keep top talent working with you. Especially in today’s remote workforce, experts in their field have options. A stakeholder-focused work culture can help ensure those shining stars keep supporting your work with their brilliance.
3. Increased Customer Loyalty and Sales
By honing into your customer base, you’ll be equipped to better understand their cares and concerns. There are countless voices out there trying to woo your potential audience. When you provide solutions to their problems, customer loyalty follows. And brand loyalty is critical to your long-term financial success.
4. Stronger Community Relations
Whether you’re a hotel, a restaurant, or a retail store, how does your brand’s presence affect the community it resides in? Thoughtful considerations regarding your environmental impact and community philanthropy can greatly boost public sentiment and team morale.
5. Brand Differentiation and Competitive Edge
Inspired employees, loyal customers, and communities that are glad you’re here … you can see why these powers combined can propel your brand to new heights. In a noisy marketplace, consistently living out your brand values will help set your brand apart.
6. Accelerated Creativity and Innovation
When you lean into the experiences of your customers and the insights of your team, really cool things can happen. You won’t just be making informed decisions, you’ll be making inspired decisions – and this can lead to new products, campaigns, and long-time value for your org.
7. Improved Risk Management
If you want to operate an ethical brand, you’ve got to manage risks – and not just the ones that threaten your bottom line. From insurance to a discerning hiring process, creating a safe space for your employees and customers should be top of mind.
8. Reduced Regulatory and Legal Risks
Focusing on your people also produces an increased sense of urgency when it comes to compliance. For example: a cybersecurity incident doesn’t just create an embarrassing PR crisis; it affects the livelihoods and sense of wellbeing for thousands or even millions of people. Companies who get that are more likely to be proactive on this front.
9. Enhanced Trust and Reputation
All of these points are connected. When it’s clear you care about your team, your customers, and creating high-quality products, you’ll earn the trust of your community. And consistent trust brings you from reputation to legacy.
10. Strengthened Adaptability and Resilience
Regardless of your industry, resilience is key to weathering economic storms. Organizations that keep their audience in mind stay tuned to the momentum of their industry, helping them to better anticipate and adapt to changes.
11. Improved Ethical Standards and Integrity
Organizations that focus on their stakeholders more than their shareholders tend to be more thoughtful in this area, because they’re keenly aware of the personal impacts of their business decisions. This can result in your brand working with more conviction than your competitors.
12. Diversity and Inclusion
As you keep your people at the heart of your business, you’ll build a company where everyone feels seen, appreciated, and supported. And that’s the type of company your team will be proud to work with, and your audience will value.
13. Sustainable Practices
Stakeholder-focused brands are more likely to keep the big picture in mind, and that includes considering their environmental impact. Implementing sustainable practices can reduce your operating expenses – but more importantly, they’ll help align your goals and growth with processes that are kind to our planet.
14. Access to Capital and Investment
When you’re cultivating a culture that people want to be a part of, investors take note. Responsible orgs attract the eyes of discerning investors, and this can result in increased capital, lower interest rates on loans, and new growth opportunities.
