Why is meeting your stakeholders needs important?
Your business has no inherent right to exist. It derives its right through the products and services it provides to meet the needs of its stakeholders. If you think about it, you may produce the best quality typewriter in the world, but that won’t do you a bit of good in a computer driven world. Understanding this law of business is important to the success of your organization. So let’s define “stakeholder”. A stakeholder is an individual that has a vested interest in the success of your organization. If you are a publicly held organization you may immediately think of your stockholders. Yes they are a stakeholder. However, plenty of businesses fail because they are only looking at the stockholder as their only stakeholder. Take a moment and think about who else has a vested interest in the success of your organization. Some of the stakeholders that are typical to all organizations are employees, customers, community, suppliers, etc. Once you have articulated who they are, it is important to understand what they need from your organization. That could be things like quality, profitability, innovation, brand recognition, etc. If you are not meeting the needs of your stakeholders, they will go elsewhere for their business. Looking at the bicycle industry, one of the companies that has done a great job of listening to their stakeholders (though not the only one) is Specialized. A few examples I have seen from this company are: Ride Quality: Within the Tarmac, Roubaix, and Ruby lines they have really focused on geometry that fits the rider, and engineering that gives a better ride. Quality Service: They have a great warranty department if anything should go wrong. I have heard stories of lifetime warranties. Most other frame companies have 1-3 year warranties. Image: Let’s face it. We all want the bikes that the pros ride. There is something about standing over the same bike that the pros ride that elicits envy from the rest of the peloton. Having both Contador and Schleck riding Specialized bikes in the 2010 Tour did wonders for the egos of all Specialized riders. Full Service: Whether it is the wheels, clothes, saddle, cages, or helmet, Specialized has created innovative products to attract and keep customers. By manufacturing all the OEM and add-ons themselves, they wisely keep the profitability in their company. Growth: As a result of meeting their customer’s needs they have also met their employees needs. They have been hiring over the last few years while other companies have decreased their workforce. At least in my area, they have also grown their market share as their bikes are now close to half the bikes I see on my rides. Although they are privately held, with the results they are getting they have to be pleasing their owners and Sr Leadership as well. As you do your strategic planning for this year, I would hope one of the first things you do is to make sure what you do meets your stakeholder’s needs.