How to Lead in the Stakeholder Era - Deepstash
How to Lead in the Stakeholder Era

How to Lead in the Stakeholder Era

hbr.org

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The Purpose of Business Is to Contribute to the Common Good

For business to be part of the solution to our collective challenges, we leaders must see companies not as soulless moneymaking entities but as “human organizations” made of individuals working together in support of a shared goal. This goal must contribute to the common good by making a positive difference in people’s lives — what author and consultant Lisa Earle McLeod calls a “noble purpose.” In this approach, making money remains an imperative, but profits are not the ultimate objective; rather, they are the outcome of a successful strategy rooted in purpose.

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Unleash Human Magic

How can we as leaders transform companies into places where all employees are willing and able to give their very best, not only to customers but to each other, to suppliers, to their communities, and to shareholders?

The foundation or spark of this magic is to treat work as an essential element of people’s humanity and as a way of finding meaning and fulfillment in life. Start by asking yourself and people across your organization, “What drives you?”. The answer helps people discover a sense of personal purpose, which in turn determines how they relate to their work.

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The End of Zero-Sum Leadership

Leaders' role changed in three fundamental ways:

1) it is no longer about maximizing shareholder value; it is about making a positive difference in the world. 

2) the leaders' job is to maximize performance not by choosing among stakeholders but by embracing, mobilizing, and serving all of them in line with a noble purpose, and refusing zero-sum games along the way. 

3) the purposeful human organization cannot flourish with the traditional top-down model of the powerful and infailible hero-leader. What is required now is a leadership approach that puts purpose and people at the heart of business.

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