Putting Stakeholder's Interests First

by Seth Sinclair, Member

Recently, author and consultant Jack Springman wrote a blog post for the Harvard Business Review’s website entitled “Implementing a Stakeholder Strategy.” (You can read it here.)  Mr. Springman began his argument by summarizing the work of a previous poster named Nathan Washburn, who stated: “Making the bottom line your top priority may not be the best way to improve profitability.  Recent research shows that CEOs who put stakeholders’ interests ahead of profit generate greater workforce engagement—and thus deliver the superior financial results that they have made a secondary goal.

Mr. Springman offered a number of steps for companies who are interested in following this revolutionary guidance:

·      Identify your company’s stakeholder groups.

·      Create a value proposition for each stakeholder group

·      Determine what you are seeking from each group

·      Compare the capabilities you need with those you already have

·      Create a profit model to manage the trade-offs among your stakeholder groups

·      Determine a set of key performance indicators.

We apply a similar philosophy in our strategic planning work with our federal clients.  Federal agencies, of course, are not driven by the need to make a profit for the benefit of shareholders.  However, in place of shareholders, we encourage our federal clients to focus strategy development around the needs of customers. 

We believe that all government entities have customers, and that their expectations should heavily factor into any strategic planning effort.  This approach is in contrast to traditional planning methods that focus exclusively on meeting regulatory and budgetary requirements.   Take the example of an internal management office responsible for supporting finance, HR, and IT services within an organization.  If the primary goal of the office is to be efficient in operations, success will be measured in terms of cost effectiveness, possibly at the expense of customers. 

In contrast, if the stated goal of the office is excellence in customer service, the office staff will design its processes and success factors around responsive and timely service to the agency’s employees.  This may ultimately enable greater efficiency and savings throughout the entire organization.

In this time of budget cuts and increased scrutiny of government expenditures, we believe strongly that federal agencies must not cut back on, or abandon, their customer service efforts.  Such cutbacks may appear to save a few dollars in the short run—but in the long run, they are likely to cost the organizations far more, in both actual dollars and in the damage to their reputations that will inevitably occur.