Council Post: Five Ways To Go Beyond Customers And Serve All Of Your Stakeholders

Over the past several weeks, I’ve kicked off innovation projects with multiple clients. As usual, my clients are deeply engaged and enthusiastic. They’re eager to learn how to finally break through the barriers their organizations have erected and turn their ideas into real initiatives that generate real results.

Things were progressing smoothly during the first kick-off until a client asked, “Who’s my customer?”

I was shocked. To me, someone who “grew up” in brand management at Proctor & Gamble and whose career focuses on customer-driven innovation, this was a question to which the answer is so obvious that the question shouldn’t need to be asked. Taking a deep breath, I answered the question, and we moved on.

A few days later, the question was asked again by a different client in a different company. A few days later, it was asked a third time by yet another client in another company — and in a completely different industry. What was going on?

Each time, I gave an answer specific to the problem we were working to solve. When pressed, I tried to give a general definition for “customer” but found that I spent more time talking about exceptions and additions to the definition rather than giving a concise, concrete and usable answer.

That’s when it struck me: To be successful, it’s not enough to know and serve your customers; you need to know and serve everyone involved in your solution. You need to be “stakeholder-driven.”

What Is A Customer?

According to Merriam-Webster, a customer is “one that purchases a commodity or service.” At P&G, we referred to retailers like Walmart and Kroger as “customers” because they purchased products from the company. These retailers then sold our goods to “consumers” who used the products.

But we didn’t focus solely on serving customers, nor did we focus solely on serving consumers. We focused on serving both because to serve only one would mean disaster for the long-term business. We focused on stakeholders.

What Is A Stakeholder?

Merriam-Webster’s definitions of stakeholders include “one that has a stake in an enterprise” and “one who is involved in or affected by a course of action.”

For P&G, both customers (retailers) and consumers (people) are stakeholders because they are “involved in or affected by” P&G’s actions. Additionally, shareholders and employees are stakeholders because they have a “stake in (the) enterprise.” By creating an approach that prioritizes all of these parties, a company can become stakeholder-driven.

How To Become A Stakeholder-Driven Organization

Focusing solely on customers is a risky game because it means that other stakeholders critical to your organization’s success might not get their needs met and, as a result, stop supporting your work. Instead, you need to understand, prioritize and serve all your stakeholders

Here’s how to do that:

1. Identify all of your stakeholders. Think broadly and consider all the people inside and outside your organization who have a stake in it or are involved or affected by your work. Consider the following questions:

• Inside your organization: Who are the people who need to approve your work? Who funds it? Who influences these decisions? Who will be involved in implementation? Who will use it? Who could act as a barrier to any or all of these things?

• Outside your organization: Who will pay for your solution? Who will use it? Who influences these decisions?  Who could act as a barrier?

2. Talk to your stakeholders, and understand what motivates them. Go talk to each of the people identified above and seek to understand their point of view. What are their biggest challenges? Why? What prevents them from solving it? What motivates them? What metrics do they need to deliver against? What would get them to embrace or reject a solution?

3. Map points of agreement and difference among your stakeholders. Take a step back and consider all the insights from all of your stakeholders. What are the common challenges, priorities, incentives or barriers? What are the disagreements or points of tension? Are there priorities or barriers that, though they’re unique to a single stakeholder, you must address?

4. Prioritize your stakeholders by answering, ‘Who’s the boss?’ Challenge yourself to identify the “boss” for your work. For example, for medical device companies, perhaps “the bosses” are the surgeon who uses the device and the hospital executive who has the power to approve the purchase. For a nonprofit, perhaps the bosses are the donors who contribute a majority of the operating budget. For an intrapreneur working to improve an internal process, perhaps the boss is the person responsible for implementing the change. To be clear, you don’t focus on “the boss” to the exclusion of the other stakeholders, but you do prioritize serving the boss.

5. Create an action plan for each stakeholder. Once you’ve mapped, understood and prioritized the full landscape of your stakeholders and insights, create a plan to address each one. Some plans might focus on the design, production and other elements of your solution. Some might focus on the timing and content of proactive communication while others might outline how to respond to questions or a negative incident.

Yes, it’s important to understand and serve your customers. But understanding and serving all your stakeholders is required for long-term sustainability. So don’t just ask, “Who is my customer?” Ask, “Who are my stakeholders?” The answers might surprise you. Putting those answers into action through the solutions you create and the results they produce will delight you.