Stakeholders orientation (part of the HPO Factor: Long-term Orientation) is defined as ‘the aim to benefit all parties that are affected by the future success or failure of an organization.’ People in an HPO find shareholder thinking too limited and therefore make sure they maintain good and long-term relationships with all stakeholders, creating win-win relationships. They understand the needs of key stakeholders by staying in close contact with them, and they continuously align stakeholder needs with the organization’s needs. They are generous to society by demonstrating significant financial commitment to local economies and environments by regularly investing in these. They develop a good corporate reputation by focusing on corporate social responsibility (CSR), making this a real living activity.
One of our strengths is the way we treat everybody who has dealings with us, be it clients, suppliers, or our neighbors in this area. We regularly take stock of our stakeholders and think about the way we interact with them: what do we want to achieve with them, which way do we need to go with them, how can we improve our cooperation. We like to involve our stakeholders in what we are doing, ask their opinion, solicit their ideas. We don’t do this in a quick and dirty way, we really take our time to interact with them. What helps is that many of our people, including management, live in the area so they are immersed in the local community and thus well-informed about possible sentiments toward TATA Steel. This attitude of ours developed in the 1960s and 1970s when Hoogovens was the largest employer in this area, which comes with a huge responsibility as management realized that many families were dependent on the company for their livelihood. We must have done something right because our people are not job hoppers and tend to stay long, and we have good relationships with people representatives organized in, for instance, the works councils. Investing in your stakeholders is not only a moral obligation but also makes perfect economic sense: it is a very good, pleasant and therefore productive environment here!
IDEAS TO GET STARTED TO FOSTER A STAKEHOLDERS ORIENTATION
- You can do the following to foster a stakeholders orientation in your organization:
- Create an organization with a coherent identity and a common purpose.
- Develop a long-term perspective that justifies short-term financial sacrifices in order to achieve that common purpose and to endure over time.
- Articulate a purpose broader than making money, thereby letting people think about new sources for innovation.
- Create public-private partnerships, in which societal interests come together with business interests.
- Give people room to express personal values in their everyday work.
- Apply co-creation with stakeholders, by inviting them to participate in the dialogue around new products and services of the organization.
A good manager at Unilever has both a to-do list and a to-be list. In business we are focused on hard-nosed achieving targets and creating shareholders value so we tend to be led by to-do lists. We focus on what we need to do and forget what we want to be. But in business you also have a corporate social responsibility which is value driven and this provides you with a to-be list. So it is a combination of what you want to achieve and why you want to achieve it, and you have to manage both well. It is easy to manage on results, but it is much more difficult to manage on values because you first have to answer difficult questions like: Who do we want to be as a company? What do we stand for? What is our point on the horizon, what do we want to achieve for society? At the same time you have to achieve your targets, you have business goals to achieve. Many people say that shareholder value and corporate social responsibility are mutually exclusive but they are not, not when you deliberately manage them together simultaneously. That’s why you need two lists, one ‘to-do’ for business and one ‘to-be’ for social responsibility.
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