Broaden Your Organization’s Understanding of Stakeholders

It is very difficult to meet stakeholder needs when most people in the organization don’t understand what these needs are or only have an abstract understanding that seems meaningless. This section provides an approach for cascading stakeholder orientation deeper into the organization. Depending on the size of the organization, you might integrate the approach into existing training programs for leaders and frontline team members, or you might create a stand-alone training module. The goal is to ensure that everyone in the organization understands stakeholder orientation and that everyone, regardless of specific role, can find ways to help meet stakeholder needs. There is an abiding commitment to co-prosperity; when stakeholders win, the company wins. That’s the beauty of interdependence.

Embedding Win-Win Thinking

We now dig deeper into stakeholder orientation and take a twofold approach to making win-win thinking come alive in your organization. We do this first at the individual level and provide exercises on how to increase win-win thinking for individuals. These exercises can be interwoven into existing training programs or used as stand-alone exercises with teams or large groups of people participating in an off-site meeting. Second, we will examine some issues that the leadership team needs to consider to ensure that the organization is supporting and reinforcing the right behavior in the organization.

Fundamentally, win-win thinking requires a mindset shift. We have been conditioned to think win-lose—that any discussion, negotiation, or business relationship necessarily comes to a zero-sum game. If you win, I lose, and if I win, you lose. Win-lose thinking has often been ingrained in our thinking at an early age. Vince Lombardi, the Hall of Fame coach of the Green Bay Packers in the 1960s, is often credited with the well-known expression “Winning isn’t everything; it is the only thing.” In Conscious Capitalism, the fundamental shift from this attitude is toward abundance and a growth mentality. Looking for mutual gain increases the size of the pie for everyone; together we can create more. Such thinking begins with an ability to deeply understand the needs of others. Only from this place of mutual deep understanding can we begin to work together to brainstorm and find solutions to meet both our needs in the long term.

Thinking win-win means that we instill several habits:

• See challenges as opportunities—how you can create more value in this situation by engaging deeper with your stakeholders.
• Identify the key issues, interests, and motivations (not positions) for each stakeholder.
• Reframe your perspective. In organizations, it’s easy to think that others know what challenges you face daily. Just remember, you only see your part of the system. We must communicate with each other to come to some semblance of the truth of the whole.
• See the challenge and opportunity from others’ point of view. How can they benefit?
• Seek to create results that would constitute a fully acceptable solution or increase in value for both parties.
• Identify possible new options to achieve those results. The more options you have, the more likely you are to find a win-win. Not all stakeholders can equally benefit at once. This process is dynamic and evolves over time.

Creating a Win-Win Outcome: The Ugli Orange Exercise

Whole Foods Market used the following stakeholder exercise in its leadership development program. The exercise aims to reinforce with team members that if people understand each other’s needs at a deeper level, they can find solutions that are more creative.

In appendix B, you will find instructions for a negotiation exercise involving two fictitious negotiators—Dr. Jones and Dr. Roland—who are competing for one resource: Ugli oranges. The pages are each to be copied and given to two halves of your group. Each side is asked to not share the instructions with the other side. The groups should be separated and given about ten minutes to discuss the questions they would like to have answered by the other team. In the end, the groups should have come up with questions that are respectful of the other team’s objectives without asking them to give up all their information.

As the facilitator, you will arrange a meeting between delegates (two people) from each group. The rest of each group should attend the meeting, listen to the delegates, and be available to consult with and help their delegate. The meeting should last about five minutes.

The groups then go back and discuss what they have learned and what options may exist for negotiating with the other side. They pick a preferred solution and write it up on a flip chart with a rationale for why this is the best solution.

Now discuss with the group what the win-win looks like—each group needs only part of the orange. Often, each team is so focused on getting all the Ugli oranges that it fails to see that the two parties in the negotiation are after different parts of the fruit. For many people, a simple and fair solution would be to split the oranges and give each group one-half. But this solution is not the best approach, because you did not ask why each one needed the orange. As a result, both parties might be throwing half their oranges away.

If the right questions are asked, the negotiators are headed for a win-win situation, which is at the heart of the stakeholder interdependence and orientation model. By fully understanding each other’s needs, groups can see that they if they work together, both groups will get all of what they need in this situation. We should notice the different level of conflict, from a domination position, to a compromising approach, to finally an integrated solution for the challenge.

Have each participant spend a couple of minutes writing down the key takeaways from this experience with their team. Then have them share these conclusions in pairs or triads.

When Win-Win Seems Impossible

Sometimes a win-win outcome seems impossible. However, applying a win-win approach explores the possibilities in the situation and can result in unexpected outcomes. The following exercise is meant to test the mindset that considers win-win impossible. As we have said, a positive-sum-game approach is all about our mindset and our approach to a problem or an issue. The following exercise illustrates how when we use a win-win mindset to follow a systematic approach on an issue, we may see an outcome that could not have been predicted at the outset.

For this exercise, have the group break out into smaller groups of three or four people. Each group should discuss and identify two or three situations for which the group agrees that a win-win approach would be difficult in a given situation with a stakeholder. After they choose these few issues, ensure that the groups are clear about what is involved in each situation. Do this by quickly capturing on a flip chart (a separate flip chart for each situation) the key issues involved in that situation. Now in the smaller groups, ask each group to pick two of the three situations and fill in a flip chart using the exercise below. Use separate flip charts for each situation. Give the groups ten to fifteen minutes to do this exercise.

Source: “The Conflict Resolution Network.”

Now bring the small groups back together. Have one member of each group pick one situation and spend two minutes describing to the others the key takeaway from the exercise. After all the groups have presented their two-minute takeaways, reflect as a group on taking a win-win approach to these problems. What has shifted for them? Why?

Developing Win-Win Capability in Your Organization

Embedding win-win thinking in an organization has several components (figure 10-3):

1. Establishing the value of win-win thinking in the organization—making sure everyone understands that this is how we do business and that the executive team acts as a role model for this approach to problem solving
2. Ensuring that people are trained and have the tools to understand how to implement win-win thinking
3. Embedding the idea of win-win thinking in the incentives and rewards system

Leadership must reinforce that win-win thinking is a core value and a key approach in the business and that it is the expectation and not the exception. Leaders must also set the expectations for win-win and model the win-win approach to value creation rather than focusing on short-term gains.

To give people the training and the tools to implement a win-win approach to stakeholder orientation, you can take these measures:

• Create checklists and other tools that people can easily use to remind them to follow this approach when they face challenging situations.
• Enlist trained experts on thinking win-win (use an outside training source if needed), and make them available to help coach people through difficult issues and to design and run your training sessions.

Finally, the evaluation and reward system needs to recognize and reward this behavior. Too often, organizations claim that they want a long-term stakeholder perspective and yet have in place internal systems that reward and recognize short-term financial gains in the business.

• Ensure that appropriate recognition of stakeholder-orientation practices is built into performance management. Are we evaluating and setting goals for people on this behavior? Do they get regular feedback when they do this well and when they have missed opportunities to think this way?
• Reward win-win behavior through formal and informal recognition programs. Consider holding a Stakeholder Academy Awards ceremony once a year.

Reflections for the Leadership Team

• What are we communicating about stakeholders and the win-win approach? Is this a constant theme in our communication?

   

   

   

• How are we reinforcing this message to our frontline employees? What could we do differently?

   

   

   

• What can we do as leaders to model this approach? How do we incorporate this thinking into our management meetings and decisions? When have we consciously decided to think win-win lately?

   

   

   

• Think of a recent case in which this team could have taken—but didn’t take—a win-win approach to a stakeholder issue. Point out what we could have done differently.

   

   

   

Leading from a Stakeholder Orientation

The final step in stakeholder orientation is to integrate it into how you manage the business. If you are going to lead with a stakeholder orientation, then you must monitor and report on how you are doing in this area. You need to be clear on the state of your relationships with your stakeholders. Given that whatever management focuses on is generally what management gets, there are a couple of key things to consider around stakeholders.

For example, you should put in place metrics that track whether stakeholder needs are being met and whether there is transparency in reporting. You are probably already doing some of these things, for example, the net promoter score for customers. Extend this practice to suppliers and other stakeholders. For example, Whole Foods Market uses morale surveys, team leader surveys, and customer comment cards. There is much work going on regarding integrated reporting, including measurements of environmental, social, and governance impact.

In addition, the leadership team should build in processes and mechanisms that will regularly collect feedback from stakeholders:

• Put in place a process for collecting, addressing, and sharing ongoing feedback from stakeholders—for example, surveys or yearly pulse-check calls by executive team members. One company has each senior leader make one stakeholder call a week. These regular check-ins are appreciated by the stakeholders and are an invaluable source of information on the dynamics of the business.
• Be sure to use this feedback to change your programs or to address quality or other concerns. If you collect the information and then do nothing with it, you will waste everyone’s time and lose credibility with your stakeholders.

Final Reflections

Stakeholder orientation is fundamentally about changing the operating system in an organization to focus on creating value and building competitive advantage in a fast-moving and evolving business environment. To borrow from the metaphor that it takes a village to raise a child, in a fast-moving and changing business environment, it takes an ecosystem to build an adaptable and agile organization. No company is smart enough, on its own, to know and see all the opportunities and threats in its business environment. Significant competitive advantage can be built through a stakeholder orientation. The bottom line is that, paradoxically, a stakeholder approach is how shareholders gain the most. In the twenty-first-century business environment, it takes twenty-first-century thinking and processes to succeed. Stakeholder orientation and its execution in an organization is a key part of this success. We should strive to do business in such a way that everybody matters and everybody wins.

Given the work we have done in this section, what are our three biggest stakeholder priorities, and why?

In the next section, we will discuss developing and sustaining a conscious culture in your organization.