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How to manage complex stakeholder interests? Think like a designer

How to manage complex stakeholder interests? Think like a designer

Our Practice Leader Jon Iwata co-authored a commentary on leadership with Nicolas Maitret and Lisa Maulhardt from SYPartners.

To its critics, shareholder capitalism’s flaws are many. But it does have one undeniable virtue: simplicity. The single-minded imperative of maximizing shareholder value is a North Star for making decisions, and, its proponents say, cleanly demarcates business interests.

By contrast, stakeholder capitalism (creating value for customers, employees, investors, suppliers, communities, and others) appears to complicate decision-making exponentially. With so many stakeholder interests and demands to consider, even the boundary of what is and isn’t relevant to a company becomes blurry, thus exposing it and its leaders to accusations of indifference, overreach, and increasingly, both. But this needn’t be the case.

Since 2020 we and colleagues at Yale School of Management have interviewed more than 100 CEOs, board chairs, and CxOs on the “how” of stakeholder capitalism. They had much to say. Most view a stakeholder orientation as a competitive necessity to win over talent, customers, investors, and the implicit license to operate in society. They view it pragmatically, as an effective way to succeed over the long haul. They also identified gaps in skills, training, and tools. In particular, they are looking for better ways to navigate the stream of stakeholder issues from climate change, social justice, and geopolitical conflicts, to gun control, voter access, reproductive rights, and more.