What Are Stakeholder Strategies?

Stakeholder strategies are a way to grow value for a company’s full business system (including shareholders, customers, employees, suppliers, and communities). While traditional strategies aim to maximize economic value for shareholders, stakeholder strategies create common purposes and mutual benefits among stakeholders so that the entire system thrives and sustainably generates greater value.

Companies with strong stakeholder strategies increase engagement and transparency about the company’s purpose, how it creates value, and how it contributes to society. They embrace the exchange of ideas, asking stakeholders to help them understand the right way to meet their needs. Social responsibility and purpose are at the core, not the periphery, of stakeholder strategies. Nonfinancial reports (e.g., social, environmental, and sustainability reports) are the tools companies commonly use to formalize a firm’s purpose, mission, and values, to drive accountability, and to become an open and responsive organization that harmonizes the interests of various stakeholders.

How Are Stakeholder Strategies Implemented?

Companies that leverage stakeholder strategies turn debates about corporate purpose into meaningful action. This process typically involves the following steps:

• Start by understanding objective third-party ratings of the company’s current performance with stakeholders
• Develop your own model—using proprietary insider data—of the company’s current performance with stakeholders
• Develop deep understanding of stakeholders and their needs
• Create an improved stakeholder strategy and a business system to support it, including:
  • A leadership team and culture that develop and champion the stakeholder strategy
  • Management systems—including strategizing and budgeting—to prioritize stakeholders, establish goals and metrics, and allocate resources to opportunities with the greatest multiplier effects across stakeholders
  • Organizational structures and accountabilities that increase cross-stakeholder collaboration
  • Talent strategies that attract and utilize people with deep and diverse insights into the needs of targeted stakeholders
  • Business processes that focus on holistic stakeholder outcomes rather than individual components
• Mobilize against improvement areas including agile testing, adapting to unexpected effects and side effects, and scaling up solutions that affordably enrich the lives of stakeholders

Related Topics

• Stakeholder Management

• Corporate Social Responsibility

• Purposeful Business

• Shared Value

• Environmental, Social, and Governance Programs

What Are Common Uses of Stakeholder Strategies?

Stakeholder strategies develop innovative business approaches that can generate greater benefits for the company and for society. Direct financial impacts include risk mitigation benefits (e.g., fewer labor problems, lower costs of litigation) and greater growth opportunities (e.g., more customers, greater customer spending). Indirect financial impacts include easier access to capital, better supplier relationships, more welcoming communities, and retention of quality talent.

• Selected references (click to expand)

  Benioff, Marc, and Monica Langley. Trailblazer: The Power of Business as the Greatest Platform for Change. Currency, October 2019.

  Fairfax, Lisa. “Stakeholderism, Corporate Purpose, and Credible Commitment.” Virginia Law Review, Volume 108, Issue 5, September 26, 2022.

  Henderson, Rebecca. Reimagining Capitalism in a World on Fire. PublicAffairs, 2020.

  Kaplan, Robert S., George Serafeim, and Eduardo Tugendhat. “Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality.” Harvard Business Review, January–February 2018.

  Kaplan, Sarah. The 360° Corporation: From Stakeholder Trade-offs to Transformation. Stanford Business Books, 2019.

  Mazzucato, Mariana. Mission Economy: A Moonshot Guide to Changing Capitalism. Harper Business, 2021.

  Porter, Michael E. and Mark R. Kramer. “Creating Shared Value.” Harvard Business Review, January/February 2011.

  Rigby, Darrell, Sarah Elk, and Steve Berez. “Purposeful Business the Agile Way.” Harvard Business Review, March/April 2022.

  Rigby, Darrell, Zach First, and Dunigan O'Keeffe. “How to Create a Stakeholder Strategy.” Harvard Business Review, May/June 2023.

  Rigby, Darrell, Zach First, and François Faelli. “Three Steps for Creating and Implementing a Stakeholder Strategy.” HBR.org, May 22, 2023.

  Stout, Lynn. The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public. Berrett-Koehler Publishers, 2012.

  Strebel, Paul, Didier Cossin, and Mahwesh Khan. “How to Reconcile Your Shareholders with Other Stakeholders.” MIT Sloan Management Review, July 13, 2020.

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