This September 2024 proposal sets out an article drawn from the 2024 Impact Study. Its starting point is that leaders find it almost impossible to deliver against the competing interests of their stakeholders, while better informed colleagues, customers, community, and capital markets all demand more value.
The result is silence. Leaders stay quiet about their stakeholder initiatives for fear of being called woke or accused of greenwashing, while recognizing that the stakeholder genie is not going back into the bottle.
Key findings
- Overperformers, defined as companies growing revenue faster than their direct competitors, conclude that traditional shareholder value metrics do not capture the intangible value the business creates.
- Those intangibles now carry most of the value. Employee loyalty, customer data, brand equity, corporate trust, and community reputation are said to drive over 70 percent of overall value.
- Ninety percent of overperformers see stakeholder value creation as a business opportunity rather than a risk, against just under 50 percent of revenue growth underperformers.
- Measurement widens with the definition. Sixty-two percent of overperformers focus on financial and non-financial performance, against 38 percent of underperformers.
- Marketing in overperforming companies holds more effective relationships across the C-suite: an average of 3.1 highly effective partnerships against 1.3 at underperforming businesses.
The argument, and why it is not new
The proposal frames long-term competitive advantage as being as much about intangible value for all stakeholders as tangible profitability for shareholders, and it argues businesses have understood this for centuries.
The illustration is the factory owner who moved his family to the same town, shopped and ate locally, sent his children to the local school, drank the same water, and prayed in the same church as his stakeholders.
The mechanism proposed is a marketing approach applied across every function, used to understand, engage, and build differentiating solutions for all stakeholders.
Six functions that called marketing in
At Piedmont, Georgia’s largest healthcare system, the CEO turned to his CMO to build the first holistic stakeholder map and align stakeholder needs with organizational priorities. At Chipotle the CHRO asked marketing to develop the communication strategy and assets for a 2024 recruitment and retention campaign.
Sesame Street’s development team asked marketing to help build a new high-net-worth endowment and gifting strategy. Intel’s CFO worked with her marketing peer to reinvent how the company interacts with investors and the financial markets.
At McDonald’s the franchise team invited marketing to overhaul franchisee recruitment, building target personas and a digital acquisition model that delivered immediate results. At Haleon the CMO helped develop and roll out a Health Inclusivity Index to capture business performance more broadly.
What the article would tell managers
The practical claim is that creating value for all stakeholders is the only way to build sustainable competitive advantage, and that working more closely with the CMO and marketing colleagues brings new insight and opportunity.
The proposed article would carry examples and endorsement quotes from Avon, Haleon, McDonald’s, Sesame Street, Bayer, Suncorp, and Chipotle, across CEO, CHRO, CSO, and CIO roles.
Where the authority comes from
The 2024 Impact Study is described as the first global cross-suite study on the pivot from shareholder primacy to value creation for all stakeholders. Led by IRG and the Saïd Business School at Oxford, it covered more than 450 C-suite interviews and 750 online survey responses from 61 global markets.
The CMO partnering examples come from the IRG100 program, an independent not-for-profit CMO leadership program then in its sixth year with more than 600 alumni worldwide.
The proposed authors are Professor Andrew Stephen, who co-led the study and is L’Oreal Professor of Marketing and Vice-Dean of Research at Oxford, Angela Ahrendts, who led the study advisory board and formerly ran Burberry and Apple Retail, and Marc de Swaan Arons, who led the study and founded the IRG100 program.
Scope and limitations
This document is a proposal for an article rather than the article itself. It states the intended message and the examples it would use, and the study behind it draws on self-reported interviews and survey responses.
Source
This page summarises Should Companies give up on Stakeholder Capitalism? Or can taking a more humanized approach help drive more business growth?, by Andrew Stephen, Angela Ahrendts, Marc de Swaan Arons, September 2024.