Financial well-being October 10, 2022 By
Today’s consumers have high expectations of the businesses and brands they support, demanding more ethical business practices and championing businesses with purpose. Likewise, businesses acknowledge the importance of adopting new operation models while moving away from the primary method of delivering results to shareholders by increasingly taking a more inclusive attitude that considers not just shareholders, but all stakeholders.
Businesses employing a stakeholder mindset understand that their business wouldn’t thrive without stakeholders. This understanding creates an ecosystem of interconnected groups where the business operates consciously, considering its entire business ecosystem, and works to maximize value for all stakeholders to ensure long-term success.
Who is a stakeholder?
Every business has many stakeholders beyond its employees or shareholders. A stakeholder is any person, business, or organization that has an interest in or is impacted by the activities of your business. Stakeholders include employees, customers, shareholders, partners, and your business’s community.
Having a stakeholder mindset is understanding that each of these stakeholders is essential to the success of your business and that when you optimize your business’s purpose and operations, you also maximize the value each stakeholder receives by helping you thrive. When they win, you win. And when you win, they win. In this model, everyone thrives from mutual success.
Creating your stakeholder framework.
The first step in adopting the stakeholder mindset is listing your stakeholders and learning how to interact with them purposefully. Here are some ideas on how to maximize your stakeholder relationships:
- Employees: When treated well, fairly compensated, and given opportunities for advancement, they will be more engaged in the workplace. Morale will improve and help grow a motivated workforce with improved individual productivity and boost your business’s productivity and profits.
- Customers: Customers are critical to your business’s success. Creating great customer experiences for them will foster loyalty and decrease the likelihood of them seeking the same products or services from other providers.
- Shareholders: This group has a definite vested interest in the success of your business. Their hard-earned money is on the line. Serving them with a stakeholder model outs the focus on financial prosperity instead of making as much money as possible in the short term. This places the emphasis on long-term growth instead of trying to hit quarterly earnings per share (EPS) figures by any means necessary. Help everyone who works to help your business thrive benefit from your overall growth and success.
- Partners: Your business relies on partners to provide the goods and services to maintain business operations. According to the stakeholder mindset, businesses should treat vendors like partners. Treat one another fairly and ensure they act ethically, and this will foster a positive working relationship while paving a path toward lasting relationships. And you are a vendor to someone else, right? Would you rather be treated as a vendor or a partner?
- Community: Serving the communities in which we do business is critical. Our customers and employees live and work in those communities. Fostering a positive reputation in your business’s community, neighborhood, or municipality by contributing to local charities, hiring locally, and treating workers well will nurture support and loyalty from local buyers.
An easy way to begin supporting your stakeholders is simply by sharing some ideas and resources with them. First United does this in many ways, including a recommended reading list of books that cover areas of Faith, Financial Well-Being, Health & Personal Growth.
Benefits of the stakeholder mindset.
Applying the stakeholder mindset can benefit your business in operational and practical ways. Here are some ways your business might benefit:
- Sustainable growth - If you alienate key stakeholder groups by ignoring interests, you may face hurdles in business operations. For example, ignoring the needs of employees might result in decreased morale, may lead to bad customer service, and diminished consumer loyalty. Prioritizing stakeholder interests creates opportunities for sustainability and growth.
- Long-term partnerships – Researching and onboarding new partners is time-consuming and expensive. Long-term partnerships allow your business more reliable operations. When you have partners you work well with and trust, you save money, time, and stress. Respecting your partner stakeholder’s needs and wants improves your business’s odds of fostering successful relationships.
- A purposeful culture – It’s no secret that consumers flock to businesses that serve a purpose beyond just profits. Besides higher revenue, research by Deloitte1 showed that purpose-driven companies are much more innovative and have higher employee loyalty. The stakeholder mindset can help your business build a purposeful culture by encouraging it to reflect on the needs of its diverse stakeholders.
- Industry influence – Businesses that exhibit stakeholder-driven business practices can establish themselves as influencers in their market. Consumers are quicker to recognize businesses that take care of their stakeholders. This trend is likely to grow, and businesses that have demonstrated a solid stakeholder-first approach can become leaders.
As a purpose-based organization, First United believes stakeholders are at the heart of any business’s success. The modern business world is evolving toward more ethical business practices, and we understand that the stakeholder mindset can serve as an excellent guide for greater inclusivity in your business operations. We are committed to supporting your business as you grow your stakeholder mindset and look forward to seeing the amazing impacts your business will make!