Become a Better Business Citizen

INTRODUCTION

We haven’t achieved true stakeholder balance

If you are leading any organization you have multiple levers you need to pull to create positive societal impact (or just as importantly, avoid negative ones). This simple framework (Article 1) provides a roadmap for maximizing your impact and overcoming the four major gaps (Article 2) that still stand in the way of achieving true stakeholder balance.

• 1Who is the 4th Stakeholder and what are these articles?
• 2The four big gaps we need to overcome

PART 1

Build positive societal impact into your core business engine (Article 3)

Some organizations, through their inherent structure (Article 4), are focused on creating positive social impact. And although the rest can’t necessarily claim an ‘inherently good’ foundation, that doesn’t mean they can’t do amazing things for society. Companies can attach a fractional benefit (Article 5) to their business model and they can also redirect profits or employee time (Article 6) to fund social initiatives.

• 3Tuning your core business engine to do more ‘good’
• 4Making your business and social impact one and the same
• 5Attaching social impact to your scale
• 6Redirecting revenue, profits, or resources to a cause

PART 2

Identify all high-impact first AND second-order business effects (Article 7)

Leaders must be accountable not just for the first-order impacts (Article 8) of their business but for the downstream second-order impacts (Article 9) as well—which can be even more damaging. Unfortunately, because second-order impacts involve distributed responsibility (Article 10), they require Collective Action (Article 11) and a simultaneous commitment from multiple companies (Article 12) to successfully mitigate them.

• 7No business is founded to harm society, but many end up there
• 8First-order business impacts defined
• 9Second-order business impacts defined
• 10Second-order effects and the Tragedy of the Commons
• 11Collective Action Step 1 - Mobilizing the collective
• 12Collective Action Step 2 - Mitigating the societal harm

PART 3

Identify the biggest impact swings the business can take (Article 13)

Too often companies dabble with multiple, smaller tactics vs. consolidating their energy and focusing on the biggest impact areas first. It’s a thorny problem because of the lack of a common denominator for social impact (Article 14). Attempts to use financial ROI as that unifying metric are fundamentally flawed and must be avoided (Article 15). Instead, all companies should create a prioritized, weighted attack matrix (Article 16) of what’s most important, taking into account all first and second-order business impacts. This is easier said than done, but it can absolutely be done (Article 17) as long as you are willing to change some fundamental mindsets about impact and responsibility (Article 18).

• 13The critical few vs. the trivial many
• 14The lack of a common denominator social impact metric
• 15Why we can’t use financial ROI as the prioritization metric for social impact
• 16A 4th Stakeholder prioritization metric matrix
• 17A real-world example of using the 4th Stakeholder Impact x Responsibility Matrix
• 18Changing your mindset to embrace an Impact x Responsibility Matrix

PART 4

Commit to an improvement plan and publish the progress, all with societal input (Article 19)

You cannot serve a Stakeholder without being in a two-way, trusted dialogue (Article 20). In order to do that with society, you need three things: 1) listening posts that are tuned to capture Voice of Society feedback (Article 21); 2) a dedicated and objective group that can synthesize all of that noise and turn it into real action (Article 22); and finally 3) an ongoing commitment to transparently publish your plan back to society (Article 23).

• 19The fourth major gap preventing 4th Stakeholder balance
• 20The voice of X
• 21A Voice of Society Engine Part 1: Listening Posts
• 22A Voice of Society Engine Part 2: A 4th Stakeholder Prioritization Group
• 23A Voice of Society Engine Part 3: Transparent Action