How do you balance the demands and expectations of stakeholders in business? And how do you strike this balance while simultaneously growing and strengthening your brand? This is one of the biggest challenges companies face today.
After all, the motives of internal and external stakeholders are broad. And it's difficult to align the ideals of company owners, employees, suppliers, customers and the local community.
In some very famous examples, the demands of executives to focus on bottom-line performance – and thereby their compensation – over anything else proved to be detrimental for all stakeholders. One extreme example of this is Enron. The company's “profitability at any cost" mantra led to fraudulent tactics that ultimately resulted in the organization's demise.
But even honestly achieved profitability can't be the sole demand or expectation of stakeholders in business because a company's reputation is equally important. How a company functions as a corporate citizen can be extremely critical to its future – environmental abuses and a reputation of unfairness to employees are two major ways to substantially damage a business's reputation and negatively impact profitability.
So how should management go about balancing the demands and expectations of all stakeholders with reality?
Take a Holistic Approach
Even though spewing waste into the environment may be a less expensive method of production, it's not compliant and is detrimental to a company's image when the practice is exposed.
To get all stakeholders on the same page, management needs to identify who the stakeholders are and which key issues are their drivers. At the same time, management needs to keep in mind the fact that long-term profitability is essential to the survival and success of the company. Stakeholders similarly must acknowledge that a “profit at any cost” mantra is a short-term business decision that usually results in short-term survival.
Avoid Conflicting Demands
Setting out clear company standards and operational intentions will help balance the demands and expectations of stakeholders in business with reality. Since a company's standing depends on how it's perceived both today and in the future, setting well-thought-out boundaries will help keep a positive reputation intact. Honest communication and consistent behavior will bring loyalty that will help mitigate the impact of any misstep.
Setting clear business expectations and goals will eliminate daily conflict in the tug of war between stakeholder expectations and demands and what's actually achievable. It provides a reference point that keeps the big picture in mind – helping stakeholders understand the steps required to achieve the overarching strategic plan. Knowing what is out of bounds for the company is as essential as knowing what the keys to success are. And having a clear vision to stay on that path will help a company stay true to its stakeholders.
Stakeholder Service Levels and Savings Potential
Often stakeholders’ primary demands are connected to either savings or service level values – or both. Working with a group purchasing organization (GPO) can provide you immediate access to pre-negotiated agreements that leverage the group’s collective spend. This will increase your speed to savings and your spend influence. OMNIA Partners has a robust portfolio of direct and indirect materials and services to help you realize significant savings and achieve greater SLAs than you could on your own.