This session gives the background to the stakeholder value discussion, explains the Impact Study and its frameworks, and sets out the opportunity for marketing to help the organization drive more humanized growth.
The study was run by IRG and Oxford’s Saïd Business School with a coalition of C-suite leadership organizations. It is described as unprecedented in global scope, covering 61 markets and drawing on experts, academics and practitioners from companies large and small, B2B and B2C, representing the board and five C-suite functions.
Key findings
- The context is that companies are caught in the middle. Some are accused of doing too little, while some CEOs are pushed out early because shareholders think they are doing too much for other stakeholders.
- Legislation pulls in opposite directions. New European laws mandate ESG reporting, in some American states an ESG focus is now illegal, and in China government involvement has led some companies to leave.
- The analysis contrasts organizations that are good at value creation for all stakeholders with those that are not, top two box against bottom two box, and reports that this correlates highly with revenue growth overperformance.
- The first split is in how the question is read. 90 percent of over-performing organizations see stakeholder value creation as an opportunity, against 50 percent of under-performers, with the other half seeing it as a risk.
- The economic backdrop is the shift from tangible to intangible value. Buying a company in 1975 meant buying buildings, equipment, cash and inventory. Buying one now means buying patents, reputation, brand value, customer data and the loyalty of consumers and colleagues.
Ground and reimagine
Grounding means an aligned understanding of who the stakeholders are and what matters to them, reported as 76 against 17. Engagement widens the gap further, and stakeholder representation in decisions widens it most.
Representation is defined carefully. It does not mean every stakeholder gets what they want or sits in the room. It means the C-suite knows what the stakeholder reactions will be and is not surprised afterward.
Reimagine starts with the ability to take a longer-term focus, then to define a utopian vision of the emerging future. General Motors is the example, with a morning commute of zero crashes, zero emissions and zero congestion. Many companies contrast that with a dystopian vision of what happens if they do not act, as Arcelik does on sustainability.
Purpose is sorted into four sources, borrowing Hubert Joly’s use of ikigai: what the company is uniquely good at, where it creates economic value, what its people are passionate about, and what it believes the world needs. Cause-related purpose companies are less than 20 percent of the total.
Purpose only works if it is more than a plaque by the elevators. Nike standing by Colin Kaepernick worked because it was the company DNA, and employees stood with it. Bud Light and Pepsi’s Black Lives Matter promotion are given as marketing-led activities with no corporate foundation, which left no spine to support them when the backlash came.
Focus and organize
Focus means a holistic strategy with new KPIs. Prioritizing one stakeholder is acceptable as long as the company defines how it creates value for the others. Mars is a culture-led company that still spells out in its annual report how it delivers for every key stakeholder.
An AI analysis of more than 125,000 social media posts by business leaders shows over-performers treating growth, stakeholder value, profit, engagement and impact as two related classes, while under-performers treat them as four separate subjects framed around work, team, business, career and opportunity.
The payoff of an integrated perspective is that when something goes wrong you are not playing whack-a-mole but addressing short-term issues inside a long-term strategy, and you can define what to stop. CVS stopping tobacco sales, then acquiring Aetna, is the example.
Organizing is about interdependence, and the first recognition is that without systemic change initiatives will likely fail. Industry collaboration is the one data point with no meaningful difference between the groups: everyone understands that partnerships like Walmart and Patagonia on sustainable clothing are necessary. The gap appears with NGOs and is largest with governments.
Government work is treated as a capability, not a posture. It requires real investment and probably hiring different people from the typical employee, as with Lifebuoy working with the Indian government on handwashing during the pandemic. Over-performers also push decision-making down to colleagues closest to the stakeholder.
Unleash, and what marketing does with it
The fifth driver is the leader. The da Vinci profile was developed with Spencer Stuart and the B Team. The familiar half is right-brained and left-brained, analytical and creative. The less familiar half is that da Vinci was also one of the founders of the humanist movement, which supplies the empathy.
The traits are illustrated with cases. Future focus through the CEO of Intel, whose vision for chips in America won presidential support and investment. Courage through Uber, where half of colleagues did not feel safe and policy was changed loudly. And above all authenticity: showing stakeholders you are willing to create value for them and willing to learn how.
Listening is treated as a mechanism rather than a virtue. If we do not listen differently, we will not hear new ideas from the new colleagues we have brought in.
The session closes on marketing’s role, illustrated with CMO partnerships from the IRG100 program. Kate Metzinger of Piedmont is cited for working with HR on a new employee positioning and onboarding roadmap, alongside examples of partnering with the sustainability officer, the CFO, government and the CEO.
The stated learnings are three: over-performing businesses focus on value creation for all stakeholders, the Impact Study gives C-suite leaders a practical roadmap for the pivot, and marketing can increase its influence, impact and tenure by collaborating actively with other functions.
Scope and limitations
The document is the platform export of a session, so the videos and interactive elements are not part of the text. The presenter notes that the exact tangible to intangible figures remain a subject of discussion among academics and experts, even though the direction is not disputed.
Source
This page summarises TOPIC 4: Driving Humanized Growth, by Marc de Swaan Arons, 2024.