EEA Stakeholder Management Class 1: Introduction to the Foundation of Stakeholder Capitalism
This is the introductory session of the newly updated Enterprise Engagement Alliance Human Capital Management curriculum uniquely focused on addressing and aligning the interests of all stakeholders in organizations. All recordings will be available to all for about four weeks from publication, and then most will be available to Enterprise Engagement Alliance members only for optional preparation for Enterprise Engagement certifications.
This class focuses on Stakeholder Management, the foundational principles of Stakeholder Capitalism and an enterprise approach to human capital management. Click here for a recorded video available through July 2022.
Contrary to the negative attention the Stakeholder Capitalism is receiving in the conversative and progressive media conflating it with “Woke Capitalism” or fig-leaf marketing, Stakeholder Capitalism focuses on creating value for customers, suppliers, employees, communities and for the people with the money to invest. This first class in the new Enterprise Engagement Alliance curriculum focuses on the fundamental principles underlying Stakeholder Capitalism through an interview with Ed Freeman, Professor, University of Virginia Darden School of Business, author of Strategic Management, A Stakeholder Approach; Managing for Stakeholders, The Power of And, and other books.
Below are key takeaways from the first course of the completely updated 2022 Enterprise Engagement Alliance Stakeholder Management and Enterprise Engagement curriculum focused on helping organizations implement a strategic and systematic approach to human capital management, measurement, and reporting across the enterprise. This starts with purpose, leadership, and systematic approach to culture.
The recording with questions from the audience will be available for a limited time on the ESM how-to library and then will only be available to EEA paid or academic members.
This session focuses Stakeholder Management practices, which advocates for a strategic management approach that addresses and accounts for the needs of all stakeholders, including not only shareholders but employees, customers, supply chain and distribution partners, and communities.
1. What is Stakeholder Management?
Freeman uses the same definition for Stakeholder Management and Capitalism, a philosophy rooted in the principle that successful businesses create value for customers, employees, supply chain and distribution partners, and communities, and the “people with the money.”
He had no other motive in writing the Strategic Management: A Stakeholder Approach in 1984 other than to help coalesce the work of earlier thinkers on the role of stakeholders into a practical process any organization could implement.
According to Freeman, “the task of executives is to create as much value as possible for stakeholders without resorting to tradeoffs. Great companies endure because they manage to get stakeholder interests aligned in the same direction.” Stakeholder Capitalism is all about having profits but in a way that is admirable to people, instead of reviled, as is often the case.
Implementation is not rocket science. It means rethinking what we are already doing but rigorously considering the interests of other stakeholders affected by that action and what can be done to enhance the connectivity and alignment.
2. Key Principles
Organizations need to start with a clear purpose that is not just a poster on the wall or on a business card but principles that get baked into the organization’s culture and operating system—easier said than done.
Clear principles set the stage for discussion; good judgment is required to find solutions that address the interests of all stakeholders.
It’s not necessary to turn an organization upside down to test the principles of Stakeholder Management: a good place to start is employee engagement, which is a significant issue for many organizations, or sales engagement--how can the organization improve the customer experience and achieve better results? The best solutions are based on purpose and are strategic, systematic, and measurable, not bells and whistles and widgets du jour.
To make these connections, it’s necessary to break down the silos between departments to replace confusion, inefficiency, and unnecessary distress with cohesion, efficiency, and less stress.
3. Skills Required of CEOs and all management in Stakeholder Capitalism
Creative thinking—the ability to imagine new solutions that defy the old notion that organizational resources are limited.
Communications and negotiation—the ability to convey key messages clearly and find common ground between stakeholders and the organization’s purpose, mission, and values.
Emotional intelligence—understanding how each person wishes to be treated, appreciated, what their needs are, rather than rolling them up into a statistic.
Purpose, Values, and Feedback—the ability to articulate and manage through feedback the give and take of organizational purpose, values, and stakeholder interests.
4. The Future of Stakeholder Capitalism
Freeman believes that the shift to Stakeholder Capitalism is well into the fourth if not the fifth inning in US baseball parlance, because there are many practitioners who have achieved success without necessarily using the Stakeholder Capitalism nomenclature or seeking special attention. These include companies such as Microsoft, Motley Fool, Container Store, John Mackey’s Whole Foods and practitioners of Conscious Capitalism, B-Lab companies, and, and many others, he points out.
The shift away from Shareholder Capitalism is inevitable, he believes, because Stakeholder Capitalism is just better business.
Click here to learn about the Enterprise Engagement Alliance membership program, which provides complete information on the practical implementation of Stakeholder Management principles across the enterprise.
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Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at TheEEA.org is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
Training and Thought Leadership
- Founded in 2008, the Enterprise Engagement Alliance provides outreach, learning and certification in Enterprise Engagement, an implementation process for the “S” or Social of Stakeholder Capitalism and Human Capital Management and measurement of engagement across the organization.
- The Enterprise Engagement Alliance provides a training and certification program for business leaders, practitioners, and solution providers, as well as executive briefings and human capital gap analyses for senior leaders.
- The EEA produces an education program for CFOs for the CFO.University training program on Human Capital Management.
- Join the EEA to become a leader in the implementation of the “S” of ESG and Stakeholder Capitalism.
Engagement Digital Media and Marketplaces
- The ESM information portal and The Enterprise Engagement Advisors Network solution provider marketplace cover all aspects of stakeholder engagement, and the EEA information library lists dozens of resources.
- The RRN information portal and Brand Media Coalition marketplace address the use of brands for gifting, incentives, recognition, and promotions. The BMC information library provides information and research resources.
The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
- Enterprise Engagement for CEOs: The Little Blue Book for People-Centric Capitalists. A quick guide for CEOs.
- Enterprise Engagement: The Roadmap 5th Edition implementation guide. A comprehensive textbook for practitioners, academics, and students.
Enterprise Engagement Advisory Services
The Engagement Agency helps:
- Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
- Human resources, sales and marketing solution providers profit from the emerging discipline of human capital management and ROI of engagement through training and marketing services.
- Investors make sense of human capital reporting by public companies.
- Buyers and sellers of companies in the engagement space or business owners or buyers who seek to account for human capital in their mergers and acquistions.
For more information: Contact Bruce Bolger at Bolger@TheICEE.org or call 914-591-7600, ext. 230.