Shareholder versus Stakeholder, and the Rise of Social Business.
Feb 8, 2010
Blogs and online communities, crowdsourcing, Twitter and Facebook, SEO and real-time search. They’re more important than ever as part of a
marketing business strategy. (Yes, marketing, too… but bigger than marketing.) The case is laid out nicely by Indra Nooyi, CEO of PepsiCo in this Marketplace interview. Here’s the snippet that sums it up:
Kai Ryssdal of Marketplace Corporations are obliged to do the best for their shareholders, they’re obliged to maximize their profits. The public sees that and they say, “Ah, they’re just out for themselves and to make money. And what about the little guy?”
Indra Nooyi I think that’s the old definition of the corporation. I think the new corporation is, in fact, thinking stakeholders, and not just shareholders, because they all look at the financial crisis. And I think the financial crisis came about because there was a maniacal focus on the shareholders. And everybody’s now got a dose of religion and realizes that a maniacal focus on the shareholder will hit you up against the wall. So people are now beginning to embrace, faster than you’d ever imagine, that the stakeholder is the right person to focus on, because companies can do well, long term, only if the societies in which they operate also do well.
Notice that Ms. Nooyi draws an important distinction between a shareholder and a stakeholder. Some may use these terms interchangeably, but the reality is they are far from synonymous. “Shareholder” implies ownership, while “stakeholder” implies interest. A shareholder is looking for a monetary return on an investment. A stakeholder may want that, too… but they are just as likely to want to be a part of something “good,” which could mean an aspiration to be part of a group or movement, or just wanting to feel they aren’t making a purchase from a company that treats them like a number on a P&L statement.
Whatever the reason, conventional wisdom dictates that the way to appeal to the shareholder is by announcing you’re big, strong and making money. That sounds suspiciously like advertising to me.
However, the way to appeal to a stakeholder is by making them a part of the success. That sounds much more like a conversation.
If you haven’t already, grab one of the tools from the first sentence (or another from the growing list) and get focused on the stakeholder.
Watching TV as a kid, I used to run to the bathroom during the shows so I could make it back for the commercials. Those days launched me down a path that included layout and writing for the college paper; communications strategy for political campaigns; marketing strategy and graphic design for Gensler (a global design and architecture firm); and the implementation of new programming, animation and design techniques for Centerline. Today I specialize in content marketing strategy and building digital deliverables to execute those strategies. But it’s about more than just creating killer digital content. At Centerline, we help clients succeed in the digital marketplace using a three-pronged approach: strategic (message creation, brand strategy), tactical (design, development), and analytical (measurement and adaptation). This experience-tested approach allows me to build campaigns that are both well-designed and effective for clients like IBM, GE and National Instruments.