“I never—no matter how annoyed or angry I may be—I never, ever shout at a waiter,” says Dan, the strange, haughty character in Wallace Shawn’s classic 1985 play, Aunt Dan and Lemon. She adds: “I never shout at a porter or a clerk in the bank or anybody else who is in a weaker position in society than me.” Why? She fears that treating frontline employees with disdain will provoke them into being indifferent to the quality of their work, which will eventually, in her (rather eccentric) mind, lead to chaos and revolution.
It’s a bit much… but one can’t help thinking of Dan on reading the recent stop-the-presses announcement from the Business Roundtable, a group of powerful CEOs helmed by JP Morgan Chase’s Jamie Dimon: “While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Are these stakeholders the kind of people Aunt Dan would never yell at? Some of them, absolutely. Does this mean that the Business Roundtable is envisioning a future of furious consumers and employees, ones who will punish companies that abuse them and their trust? Possibly.
This is a remarkable about-face. If the Business Roundtable is no longer putting shareholders at the center of their endeavors, we’d better pay attention. You can be as skeptical as you like—skepticism is reasonable—but this rhetoric is such a different key from the Milton Friedman song the Business Roundtable has been long humming that you can’t ignore it.
The movement toward stakeholder value is a leveling mechanism. To have a stake in a given situation doesn’t require any capital… only human involvement. The Business Roundtable is talking, whether they realize it or not, about human-centered design. EPAM Continuum has been practicing human-centered design for over three decades, so we might have some advice for Dimon and Co.
To provide true stakeholder value, leaders will need to begin by honestly asking themselves some important questions.
To do business that positively impacts stakeholders requires acting on several levels at once. This is precisely the kind of democratic design one sees sketched out in Lincoln’s Gettysburg Address, and it would be an ideal state for businesses to evolve to.
But if the Business Roundtable’s words are to mean anything, they need to be manifest in the real world. This will be a challenge. A perfect example of this can be found, right now, in India. The New York Times recently reported on how restaurant owners, who belatedly discovered that food-delivery apps were taking too big a bite out of their profits, are rebelling against the apps with the #Logout movement.
Once upon a time, this story might have been merely about the brilliance of the app makers and how they disrupted—to employ the once-popular word that has begun to sour in the mouths of the general public—legacy restaurateurs. But consumers, journalists, and readers now understand more about how digital business works, and while the hungry are interested in efficient, and cost-efficient, means of eating out, they aren’t complete insensitive to the damage a certain kind of business model can do.
Can there be a way in which all the stakeholders in the Indian restaurant world thrive? Is there be some kind of fair balance that will serve hungry consumers, entrenched restaurateurs, and food-delivery app-sters? It would likely be a very smart thing for all the stakeholders to get together and cook up a solution that works for all parties.
The bigger point here: To provide true stakeholder value, leaders will need to begin by honestly asking themselves some important questions. Such as:
Are you considering the relationships between the various stakeholders? Stakeholders affect each other. You must take seriously the idea that no stakeholder lives in an isolated environment and that understanding the interrelation is your responsibility.
Is this work being done by networked and/or multidisciplinary teams? If you want to serve the ecosystem you need diversity of thinking, skills, and culture in the people that are servicing them.
Are you humble enough to work with partners? Understanding that no one company can, on its own, understand all stakeholders is central here. To develop the mindset to solve problems together with other organizations is a beginning. Are you there yet?
What steps are you taking to ensure that you truly do the work here? To go beyond mere rhetoric, you need to ask some questions and create definitions. Who exactly are the key stakeholders? What do they need? How do you know you’re providing it? It’s essential to define metrics of stakeholder service, develop a dashboard to monitor these, and then incorporate them into your regular business processes.
How will you keep an eye on the human cost? What’s the impact on the everyday humans—customers, employees, community members, and, of course, shareholders? Are you thinking about the future implications of what you’re doing? Are you regularly reviewing the effects? Sending researchers into the field, to understand stakeholders in context, seems an important idea here.
What’s the timeline for adopting—truly adopting—a stakeholder mindset? If you don’t envision how to navigate to stakeholder-centric future, you’d never get there. We can highly recommend the idea of backcasting as a means of planning for transformative change.
Putting the focus on stakeholders is a good and noble idea. The trick, for the Business Roundtable—and every company operating in the 21st century—is to ensure that they’re actually engaging with the relevant people and building beyond a zero-sum solution. If they fail to do so, it will come back to bite them in the final act.