As a thought leader, author, educator, and change leadership practitioner, I write a weekly article that benefits leaders who want to improve their organizations significantly.
This week's topic closes out a series of eighteen essential elements a company must adopt to make a significant organizational transformation. It began with accountability and included a sample of additional topics of non-judgmental communication and attention to detail. We end the series with the need to consider company stakeholders actively.
Our credo says that, in the end, we want to drive positive change in the lives of our stakeholders and communities across the world, enabling them to rise. - Anand Mahindra
Mahindra has successfully leveraged his approach of driving positive stakeholder change to become a billionaire as the third generation of a business with $21 billion in revenue. Companies looking to reach their full potential must focus on the importance of integrated growth, moving toward self-actualization and transcendence for their internal and external stakeholders. The objective is establishing an environment focused on strengths that promote upward spirals toward optimal individual and organizational performance.
The work occurs in a positive whole system setting that compels the natural human tendency of innate good to motivate the organization's members to generate positive environmental and social impacts. Ultimately, it has the additional beneficial outcome of all stakeholders of its ecosystem doing well financially. Intelligent leaders will invite all their stakeholders' representatives to the strategic planning process. A well-developed vision inspires the organization's stakeholders and becomes the North Star to guide everyone on an intentional collective course toward the desired destination. Imagine the impact the business sector could make if we developed work environments that maximize the potential of all stakeholders.
Organizations looking to ensure long-term success must actively consider their company stakeholders. Establishing a track record of caring for its stakeholders allows the company to build trust and maintain a positive reputation. Before the work to develop active consideration of company stakeholders, the leadership team should establish the parameters for these interactions:
• Ethical and Legal Business Practices – The leadership group must establish, communicate, and monitor the ethical practices and legal compliance that all stakeholders should expect in all interactions.
• Environmental and Social Responsibility – There is a growing understanding that businesses must implement sustainable practices to, at a minimum, do zero harm with a higher objective of being regenerative organizations.
• Ethical Supply Chain – An organizational responsibility is establishing, communicating, and monitoring a code of conduct that outlines supplier expectations for all interactions throughout the value stream.
Establishing these practices before moving forward with stakeholder engagement improvement will provide a clear understanding of the roles and responsibilities of all participants.
Upon completing the base expectations for the various stakeholders, the work begins to thoroughly understand their needs and expectations to be valuable assets in carrying out the organization's vision, mission, and values. Gaining this insight will lead to higher levels of success for all partners and involves the following:
• Identify and Prioritize Stakeholders – An assessment of the various participants in the value stream will consist of, at a minimum, the community, customers, employees, environment, regulatory bodies, shareholders, society, and suppliers to understand their influence and impact on the business.
• Engage in Open and Transparent Communication – The organization must openly and transparently share ongoing information regarding the company's goals, performance, and challenges, allowing stakeholders to see their impact on working to lift one another up.
• Listen Actively – The leadership must establish an environment where stakeholders are willing to provide feedback, knowing the organization genuinely listens to their concerns, ideas, and suggestions.
• Incorporate Stakeholder Input – Where feasible and appropriate, integrate their suggestions and concerns into your decision-making processes.
Stakeholders may have initial skepticism regarding the organization's initiative to improve these relationships, so it will be essential to achieve short-term wins. Then, use these initial successes to build greater trust and a track record in caring for these valuable partners.
As with most new initiatives, the efforts will take time to gain the significant benefits possible with a robust stakeholder engagement process. Regular reports on the organization's progress and performance in meeting stakeholder expectations should result in improvements in the following:
• Employee Well-being – A continuing theme in my writing is putting employees first by ensuring they are set up in a caring environment that allows success, which leads to extreme employee engagement and satisfaction levels that will better serve the organization's stakeholders.
• Customer Satisfaction – When all stakeholders work together, there should be an increase in the delivery of high-quality products and services and less need to resolve issues, leading to higher levels of consumer contentment and commitment.
• Increasing Shareholder Engagement – A partnership environment that rewards trust and positive interactions will be an upward spiral of ongoing delight in helping one another achieve previously unseen results that enhance the overall success of all contributors throughout the value chain.
• Community Involvement – Success in increasing the success of the collective stakeholder group provides the opportunity to be an active member in creating thriving for the citizens in the local area.
• Continuous Improvement – The work to better engage with the organization's stakeholders will begin to result in synergy far greater than the sum total of their separate efforts.
Actively considering the needs and interests of stakeholders is a complex and ongoing process, but it is essential for any business's long-term sustainability and success. It requires a solid commitment to ethical behavior, a culture of responsibility throughout the organization, and adherence to its values.
A well-developed vision inspires the organization's stakeholders and becomes the North Star to guide everyone on an intentional collective course toward the desired destination. Companies actively encouraging stakeholder input in an environment of trust and respect can achieve synergy, leading to tremendous success for all participants. Actively considering the needs and interests of stakeholders is a complex and ongoing process, but it is essential for any business's long-term sustainability and success.
The Project Management Institute has a practical approach to assessing stakeholder analysis. While the article has a project focus, it includes a matrix that can guide the work to understand the various stakeholders of the organization better.
I appreciate Dr. R. Edward Freeman and the Darden School of Business at the University of Virginia. One website called him an "interesting guy with an unconventional approach." He has a Ph.D. in philosophy and a B.A. in mathematics and philosophy, which is not your typical path for a business professor. However, his mind was open to developing his work on stakeholder theory, which was essential in helping the business world understand the interdependence of business and society.
Next week's blog will shift to giving more consideration to the company's human element, which is integral to becoming a humanist manufacturing organization.
To learn more about our work or read more blog posts, visit emmanuelstratgicsustainability.com.
I encourage you to read my book Humanist Manufacturing: A Humanitarian Approach to Excellence in High-Impact Plant Operations. The paperback and eBook versions are now available at Amazon and many other booksellers. You can also view the Humanist Manufacturing Book Launch to gain additional insight into the Humanist Manufacturing framework.
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