The Case for Stakeholder Obsession

By Ben Kalevitch, Managing Director, United Minds

Leaders today face unprecedented risk if they fail to successfully navigate sharply conflicting demands from stakeholders both inside and outside of the company. Consider the following real (but blinded) challenges leaders are facing:

• A new pharmaceutical product, while successful in meeting an unmet need, attracts negative attention due to the high cost of the medicine. Patient advocacy groups begin campaigning, putting a target on the company that may reduce demand for its other products.
• An industrial manufacturer normally regarded as an employer of choice makes a
  cost-saving move to close a plant that would significantly impact the local community. Prolonged union negotiations inspire new demands from non-union employees, creating talent and business risk that could undo any cost-savings.
• A high-profile activist investor group demands a more aggressive sustainability target for the sourcing of a company’s products, despite the fact that the company as a whole has a positive reputation. While other stakeholders are not holding their feet to the fire, management is concerned about potential spillover and reputation fallout.

In each of these situations, conflicting stakeholder demands and expectations create explicit danger to not only reputation but the financial performance of the business. 

Building the tools and protocols to gather stakeholder intelligence is relatively straightforward. What’s more complex is integrating stakeholder views across the organization. For example, marketing knows the voice of the customer. Investor relations knows the investors. Public affairs understands governments and policy influencers. The PR team knows media and social media influencers. And HR knows the employees. 

Until there is a situation that demands it, rarely are these various insights systematically integrated into an enterprise view to inform broader business decisions. This is exactly the right opportunity for the Chief Communications Officer.

The CCO, typically a master storyteller, is also poised to go beyond traditional research and help leaders understand the narratives that their stakeholders are encountering (e.g., “electric vehicles represent the dawn of a clean energy era in automotives”) and the counter-narratives that are cropping up (“electric vehicles are harmful for the environment because the batteries are strip-mined”). AI can help them understand what is currently and what could impact perceptions and expectations at speed and scale, providing a more nuanced understanding of risk. For example, it’s one thing for a company’s progressive and conservative stakeholders to shout within separate echo chambers, and another thing when those echo chambers start engaging in ways that can ultimately hurt the company’s reputation, sales and stock price.

Fanning the flames of these and other issues further is a media environment that welcomes polarization and a mis/disinformation landscape that amplifies and distorts perspectives. All the dysfunctional dynamics that have been shaping politics and media are now engulfing businesses, which tend to think of themselves as largely insulated.

Now, they find themselves at the center.

If “customer-obsession” was the dominant shift companies were making in the last decades of the 20th century, perhaps “stakeholder-obsession” needs to take on the mantle today. While stakeholders are a critical prism through which to evaluate risk, they can also help leaders uncover new ideas and common ground related to growth opportunities and new business models. Conducted the right way – with discipline, curiosity and openness – stakeholder intelligence can quickly be the darling of CMOs, CSOs, CFOs and others across the C-suite.