What Is Stakeholder Orientation & Why Does It Matter For The Family Business?
By Kyle Danner
Who has a stake in the family business?
Your first thought is probably the family that owns the business, and that’s certainly true. Then there are the employees or team members. Then, the customers of course.
But, for Conscious Capitalism, the view of stakeholders is much larger. It also includes investors, suppliers, and the communities where the business operates.
And it doesn’t stop there. Competitors, labor unions, the media, and all levels of government are also considered stakeholders. It even includes the environment. That’s a lot of parties to consider, each with their own agendas and their own priorities.
Understanding and appreciating the number of stakeholders requires systems intelligence. That’s a fancy way of saying that you’re able to see the big picture. Systems intelligence means not only knowing all the different parties involved but also realizing how they’re interconnected and dependent on one another. You can visualize how one small change can have an impact on everything that follows.
That’s a huge shift in thinking. It’s also a huge shift in problem-solving.
Why You Need To Know Your Business’s Stakeholders
Conscious Capitalism encourages business owners and their teams to move away from looking at problems as trade-offs or zero-sum thinking (where someone else has to lose in order for you to win). Instead, Conscious Capitalists look for win-win-win-win-win-win, or win to the sixth power, solutions. Even with your competitors.
Now, before your head explodes at the thought of helping your competition win, remember that you can learn from your competitors. You have the opportunity to learn from their mistakes or from what they do right, and to use that knowledge to differentiate your business. There are always ways you can stand out from the other guys and win over customers.
This big-picture approach with all these stakeholders may feel that it doesn’t matter for your family’s business. But, think about the hundreds of thousands (if not millions) of businesses that will be changing hands in the next 5 to 15 years thanks to the Baby Boomer retirement wave.
If those businesses do not transition well, for whatever reason, millions of jobs will vanish. Supply chains will be disrupted. Wealth will evaporate, the same wealth that supports so many good causes in our communities.
Let’s bring it closer to home. Do any of these businesses include your customers or your suppliers? What would happen if any of them closed their doors unexpectedly? Would you take a big hit in sales or would your supply chain be thrown into chaos?
This is why businesses in general, and your family’s business in particular, needs that big picture approach. As you consider the future of your family’s business, consider all the stakeholders in play. Ask yourself, “How can I create solutions where everyone wins?” Because the more willing you are to help them win, the more willing they will be to help you.
The Most Important Stakeholder In Your Business
Now, I wanna talk about one stakeholder that’s missing from the Conscious Capitalism model. You probably have already guessed it. It’s the family that owns the business. And why does the family deserve special consideration?
Well, going back to the Higher Purpose, the business was started to take care of the family so the family can thrive. In turn, the family’s shared purpose, its culture, and its values form the business and serve as its foundation. They drive the business.
If the family doesn’t stay healthy, it will impact the business, which will have a ripple effect on stakeholders that buy from, sell to, or benefit from the business. For this reason, it’s essential to resolve conflict before it leads to a major blow-up.
Is your family performing at its best in the family business? Sign up for my Peak Performing Family Team training program. In this program, the family will:
- Reach a new level of collaboration and productivity
- Learn what actions to take to prepare for what’s next
- Discover the strengths & role of each person on the team