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Strategy. It’s the art and science of allocating resources to create maximum value. We studied companies in the S&P 500 over a 10-year period, examining those that created the highest value for stakeholders―customers, employees, suppliers, and their communities―and those that created the highest financial value. We found that, on average, those that outperformed on both dimensions also had the highest shareholder returns.
That correlation won’t put chicken-or-the-egg debates over stakeholder capitalism to rest anytime soon, but this much is evident: The best strategies align the ambitions and desires of stakeholders to create value for shareholders―and vice versa. And while metrics for measuring customer satisfaction, employee engagement, supplier relations, and community impact used to be elusive, they’re now available and increasingly standardized. That makes it possible not only to measure and manage different types of stakeholder value but also to determine which will produce the greatest results and allocate resources accordingly.
Stakeholder Assets
When your customers, employees, suppliers, communities, and investors thrive, so does your business. A thoughtful strategy that achieves stakeholder and financial value delivers greater long-term total shareholder returns. Our Stakeholder Value System helps you build a stakeholder strategy with speed and confidence.