Balance Matters

Abstract

This chapter points out the importance of valuing all key stakeholders to a business. When leaders make one stakeholder group the only one they value, they often deliver results that serve that group well, but also often create undesired consequences involving other stakeholder groups. In this chapter, I underscore why the workforce has been traditionally undervalued as a stakeholder group and the consequences of that in terms of engagement and responsiveness in times of change. Undervalued people never become partners! Further, while I argue that a balanced stakeholder perspective is essential, I also introduce a “Circle of Growth®” argument that suggests a reasonable order to serving all stakeholders: people → customers → business. This notion provides a starting point for creating the kind of business where people are able and willing to serve their customers, who in turn deliver the business and financial results that all business leaders wish to produce. There are two Simple Truths covered in this chapter.

Application Activities

Look over the following questions and activities. In this chapter, they are designed to give you an insight into your mental model about stakeholder value and the model you use to manage and lead people in your business. If you are part of a leadership team, discuss and answer these questions together as a team. Talk about the issues raised in this chapter. Come to an agreement about how your team values people and the model you operate from as leaders.

Application Activity 5.1: Balanced Stakeholder Perspective

With your leadership team, answer the following questions. This is a crucial dialogue—it will give you and your team some insight as to whether you have a balanced view of the contributions of all stakeholders.

What’s Real?

• 1. Looking back over recent decisions, which stakeholder group (owners/stockholders, customers, employees) is really most important to you and your leadership team? How has that factored into your decision making?

• 2. When the numbers fall short somewhat, do you and your leadership team knee-jerk into making easy decisions (e.g., decreasing training budgets, freezing positions, benefit take-aways, reducing headcount) that negatively impact your workforce in order to get to the right bottom-line number?

• 3. When the numbers fall short somewhat, do you and your leadership team spend time looking for solutions that will minimize the impact on your people?

• 4. The last time you were faced with a tough decision that could affect your people, did you or anyone else on your leadership team point this out and ask, “Is this okay?” or “Is there any way we can minimize the impact of this decision on our people?”

Application Activity 5.2: Being Intentional in Our Decision-Making Processes

If we want to be intentional in considering the best interests of our key stakeholder groups, we need to ask the question: What impact will this decision likely have on our people (our customers, our numbers, etc.)?

We can take this further, by asking the series of questions, described above, all asked with the goal of being intentional about understanding the impact of our decisions on our employee (or any) stakeholder group.

• 1. Let’s try this. Consider any memorable management decision you and/or your team made that had a negative impact on your people. Answer these questions as though you were just now considering this decision and did not already know the real impact of your prior decision. See if this would have helped lead to a good decision that did not suffer from bad consequences.

• 2. Start by briefly describing the issue, the circumstances, the decision, and the consequences. Did anyone ask about the impact of that decision on your people before that decision was finalized and communicated?

  • Would a different decision have been reached if that question had been asked? Describe.

Go back and relive that decision-making process in more detail—answer the following four questions as though you don’t already know what actually occurred.

• 1. What impact will this decision likely have on our people?

• 2. Are we okay with that impact?

• 3. If not, what do we want to change?

• 4. If we are okay with that impact, how do we inform our people in ways that they’ll understand our reasoning?

Reflection

• Would a different decision have been reached if these questions were asked? Describe.

• If you would make the same decision, describe how you would communicate that decision to your people.

Application Activity 5.3: Circle of Growth^® (Fig. 5.2)

Fig. 5.2

The Circle of Growth^®

• 1. Does the Circle of Growth^® logic make sense to you? If not, why not? If not, what would “your” Circle of Growth^® look like?

• 2. If the Circle of Growth^® logic does make sense, describe how your typical approach to managing and leading supports this model? Are you getting the results you want and need from your people given this model?

• 3. If it doesn’t make sense, why not? What is missing for you? Draw and explain your model. Are you getting the results you want and need from your people given your current model?