The Most Important Stakeholders

2011-11-11

Who are the most important stakeholders of your organization? When creating strategy and making decisions, whom do you consider first? The customers? The owners? What about the senior leadership team? Employees? How about vendors? Corporate social responsibility is a hot topic today – perhaps the community at large is most important. Which stakeholders are at the forefront of your mind as a leader? (Choosing “All of the above” is cheating.)

The issue of pleasing stakeholders is a constant battle. Every significant decision you make is tied to the difficult calculus of pleasing the most people in the most important ways most of the time. Success with this task assumes that you 1) know who the stakeholders are, 2) understand those stakeholders’ real and felt needs, and 3) have the power and resources to meet those needs. Failure with this task is most often related to that first item – knowing who the stakeholders are. If you don’t know who the stakeholders are, you can’t possibly know their needs or address them.

I have asked countless businessmen and women, “Who are the stakeholders of your enterprise?” The answer is almost always, “The customers and the financial shareholders.” I counter with, “That’s all? Does anyone else have a stake in your business?” Then I get a look that can be accurately interpreted as, Apparently I don’t know something that I’m supposed to know. Sometimes I let them stew a bit, sometimes I help out with, “Does anyone else depend on the success of this company?” That helps. That’s when they start talking about the employees and occasionally the vendors, but rarely the community itself.

These are all stakeholders of a typical business. However, the question remains, “Who are the most important stakeholders of your organization?

The usual answer to this question is either the customers or the financial shareholders. The answer I almost never hear is “the employees.” I have a two-point theory about these answers: 1) The customers and the shareholders hold the most power, so they are the most vocal. 2) The employees have the most to lose, so they are the least vocal. The squeaky wheel gets the grease, thus the vocal stakeholders get the attention.

Ironically, the employees are the most important stakeholders.

The argument for this position is rather simple. Let me ask a few questions to shed light on this: Where does the intellectual capital sit to conduct mission-critical activities in your organization? Who has the most direct influence on the quality of the product or service you produce? Who interfaces with the customer when they are upset? Who hears ideas from the field for new products and services? Who talks about your organization with family and friends almost everyday? (Unless your company is Apple, Inc. the answer is NOT customers!)

Are you getting the idea? Of course, the answer to all those questions is “employees.” It may sound cliché, but the truth is that nothing gets done in an organization without the employees. Not only do organizations depend on them to get the work done, they should go beyond this and engage employees for ideas to solve problems, create products, and evangelize for the company. Leaders understand how much they depend on the employees. Sadly, most do not capitalize on the intellectual and kinetic capacity of employees.

The idea that employees are the most important stakeholders is not new. In fact, if I did a survey of my readers, I’ll bet the vast majority of you have worked in organizations where leaders have said, “Above all, we value our employees.” (Perhaps you are one of those leaders.) As a leader, do you truly value your employees? Do you give them a say in problem solving and take risks based on their input? Do you recognize the contribution of specific individuals? When times are tough and competition is fierce, do you listen to people closest to the problems and opportunities?

Who is most important in your organization?

Update: A follow up to this article, Another Look at “The Most Important Stakeholders”, was posted December 28, 2015.

Dr. Scott Yorkovich is a leadership coach and consultant. He works with individuals, small and medium organizations, and ministries. Contact him at ScottYorkovich[at]LeadStrategic.com with your questions.

Credits
Photo by Chris Davis. Photo available at Unsplash under CC0 license. Image modified for size and space.

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