Every business today is under pressure to meet the needs of stakeholders beyond its customers and investors. Some organizations may view this as a burden, but others have successfully enhanced their value by meaningfully integrating employees, business partners, and communities into their strategies.
Reviewing these broader-based strategies using the framework outlined in our article “Changing How We Think About Change,” we found that strategies that consider the needs of nontraditional stakeholders often result in creative solutions that also benefit customers and investors. Some strategies effectively expand the addressable market, a key indicator of fit to purpose, which we define as the relevance and sustainability of the company’s value proposition. Other strategies primarily affect the company’s competitive position — its relative advantage, defined as its perceived distinctiveness and vulnerability to substitution — by either enhancing its ability to command a premium price or reducing its cost base.