Stakeholder Value Can Multiply Exponentially

Every organization has three key stakeholders with whom they need to create value if they are to succeed-- employees, customers and investors. However, all organizations also are part of an environment with multiple stakeholders who also have needs and interests. Every stakeholder has the potential to derive, create or destroy value for the organization, particularly when we think of value in perceived value terms.

Marketers are finding that focusing only on customers is limiting. A customer increasingly turns to information in social media to make decisions of what to buy. Someone in cyber space can influence, enhance or destroy the perceived value. Employees, often the forgotten link to value creation, can destroy good marketing and PR efforts through their own lack of willingness or ability to support the company. A bad investor report can keep not only investors but also customers away and can hurt employee recruiting efforts.

The companies that excel will be those who not only manage stakeholder relations well--meaning that they exceed the expectations of stakeholders--but that they also focus on creating value with various stakeholders. The value creation with one group can influence another. Perceived value, then, can increase exponentially, not just arithmatically. Network effects take over. When this occurs, the organization is perceived as being differentiated and distinguished from its peers.

We have always looked at innovation as a key element in value creation. I believe that we will find that truly great companies will have core competencies in innovation and stakeholder engagement.