How many of you know what makes an organization sustainably competitive? Some of you may think that a great product/service, great logo/brand, or a large bankroll makes for a sustainably competitive organization. Well, I would agree that all of the above can contribute to the creation and maintenance of sustainable competitive organizations, however, there is one key ingredient missing from this list that trumps everything on it. What’s that you may ask? Why, it’s the people of course. People meaning all of the stakeholders involved with the manufacturing, marketing, and selling of a given organization’s product or service. Stakeholders include customers, employees, suppliers, wholesalers, and retailers. All of an organization’s stakeholders must work in unison if it is to remain sustainably competitive (5-10 years of Tier 1 competition in its industry).
Now, who is responsible for making sure that an organization’s stakeholders work in unison? You got it. Starting from the CEO who espouses the organization’s culture, vision, and immediate goals, it is management’s responsibility to make sure that the human element of the organization is running in tip top shape. However, in many instances this is not occurring. In many of the American companies that I have studied, the management teams have been primarily focused on the product/service, logo/brand, and assets, paying little attention to the state of the organization’s stakeholders. And when they do turn their attention to the organization’s stakeholders, they often use coercive tactics to meet organizational objectives. This practice of using coercive tactics to meet organizational objectives may work in the short term, but not in the long term as it breaks down the relationships between management and their stakeholders.
Well, I am here to tell you that if American organizations intend to remain competitive in the world they must pay more attention to their stakeholders. The product/service, logo/brand, or assets are not enough to keep an organization sustainably competitive any more. Therefore, American organizations need to retrain their management workforce to better interact with their stakeholders. This retraining process must focus on maximizing the human element of the organizational process by implementing and/or improving positive two-way communicative processes between management and stakeholders.
By implementing and/or improving the communicative processes between management and stakeholders, a learning environment can be fostered and supported, allowing for increased cooperation throughout the organization. This process can open up dialogue that had been broken down because of management’s use of coercive tactics, allowing all involved with a given aspect of the organizational process to freely share their ideas. This sharing of ideas can lead to new and/or better organizational processes, increasing the organization’s ability to innovate and remain globally competitive.
Now, I know some of you might still be saying that it is the product/services, logo/brand, or assets of an organization that makes it sustainably competitive. I agree that in the short term those things may appear to matter most, however in the long term its the manner by which a given organization’s management team handles its stakeholders that determines its viability as well as its sustainability. I wont name names, but I am sure you can think of organizations/companies that were at the top of their industries years ago that no longer exist, or are now relegated to the bottom tier of their industries. Why did that occur? Their may be many reasons of course, but I would argue that how these organizations/companies’ management team handled its stakeholders played a significant role in deciding these organizations/companies’ fate.
To create and maintain a sustainably competitive organization, management has to properly address its stakeholders. Utilizing positive two-way communicative processes is one way of making sure that those that are involved in the process of providing or receiving a given product or service has a voice that is heard, acknowledged, and valued. This is the mark of an organization that plans on having sustainable success.
Neglect your stakeholders at your own peril.