Making the Most of Key Stakeholders

Making the Most of Key Stakeholders

We hear time and time again that stakeholders are a crucial but often overlooked aspect of the success of any venture and the reality is that as you explore your social enterprise you will inevitably come into contact with a number of stakeholders that will either be engaged in, affected by or have an opinion about your venture. These voices, even those who express less than positive views, can be a valuable source of information as you develop or expand your venture. This blog introduces a number of groups and types of stakeholders that you may come in contact with/ have to respond to as develop or grow your social enterprise.

Customers and beneficiaries: Often organizations struggle in understanding the difference between a customer and a beneficiary:

  • Beneficiary: the person who derives the main social benefits arising from your venture
  • Customer: whoever pays for the product or service you are selling.

It is important to note that your beneficiary and your customer could be the same person or could be two completely different groups. To determine if your customer and beneficiary groups are different, look at the two situations below:

  • While a customer always seeks to benefit from buying something and may even benefit from your social mission, if they aren’t the main reason you are doing your social work, they aren’t the beneficiary.
  • If the beneficiary is not paying for what you are selling, they are not your customer.

For more information on this, check out our blog:

Who Do You Serve? Differentiating Beneficiaries and Customers

 

Key Tip: When teams disagree

 Ask your team to challenge any number, fact or assumption they feel uncomfortable with, provide an alternative, and offer their rationale for the alternative they propose (Gunther McGrath 159). Then apply the principles described in the “A New Way to Evaluate Options” bullet above. 

Your team: A team is such an amazing asset to many organizations– it’s a microcosm of different talents, experiences and skills that can all be utilized as you work towards a common goal. However many of these assets are often underutilized and the likelihood is that you are not using your team, Board and connections to their full potential. Be sure to explore all your options and capitalize on your existing resources within the staff involved in your venture and your Board members.

Advisory groups: Depending on your venture, the industry you are entering and the experience of your team and Board, it may make sense for you to look into setting up an advisory group/ team. This group could be comprised of individuals who have experience related specifically to your offering (for example, an owner of a construction company who is willing to share his expertise as you set up a venture focused on employing individual with employment barriers in the construction field). Advisory groups have the advantage over a Board so far as they are easier to assemble and change as needed. As well, being separate from the Board, Boards often appreciate the additional and independent input.

Industry Experts: We know it’s hard to listen to someone who does not initially support your idea, but what if you could view that person as an asset and use their input to better your offering? Seeking constructive feedback from an individual who knows the industry you are working in and is willing to voice redflags/ things can help you overcome blind spots and prepare you for the tough questions that outsiders may ask. This is important because if one person is questioning aspects of your venture, you can count on there being others. Therefore having an opportunity to minimize those concerns sooner rather than later is a valuable asset someone familiar with the industry you are entering can provide you with.

One key relationship that  is often overlooked is the ‘outside expert’. We suggest you look for experts who are friendly, wise, skeptics:

  • Friendly: Willing to be candid, they also genuinely care about your success;
  • Wise: Not only are they smart, they have the specific wisdom your venture needs;
  • and Skeptical: They are not contrarian for the sake of being contrary, but have a ‘prove it to me attitude’ that forces you to really think things through in a productive manner. Also avoid people that root for you so much they don’t have it in them to be skeptical or candid.

The phrase ‘outside experts ’is used here, not because they all should be outside your organization– after all, insiders are crucial and should be consulted too- but to remind you that at least some of your friendly, wise, skeptics should be outside your organization. The different vantage point and perspective should be invaluable.

Competition: Your social enterprise offering will not exist in a vacuum and it is important to have an understanding of the competitive market you are entering as your product/ service will be compared based on quality and price to the other options available. It is important to note that in some cases there may be an easily identifiable competitor, but in others your offering may be pitted against the status quo/ how individuals currently cope. Make sure the focus is on who/ what provides the best solution to the problem facing your beneficiaries and/or customers rather than simply tracking against competitors for the sake of tracking against competitors.

Analyzing the most competitive alternative is really another way of looking at your targets’ needs and the degree to which they are being satisfied. Again, it’s about progress, not products, and truly understanding what causes people to make the choices they do – only now through the lens of why they are choosing something else to resolve or cope with the problem.

Who you identify as competitors is also a sign of how you understand your targets’ needs and the solution you are providing. For example, even though they are a drink, the makers of V8 didn’t see their competition as other beverages, they saw it as vegetables. They realized the customer problem they were solving wasn’t the need for a refreshing beverage per se (liquid vegetables would typically be on the losing side of competing against Diet Cokes or cappuccinos), it was customers who wanted to eat vegetables but didn’t have the time (V8 gives you your daily vegetable intake in a quick, easy, refreshing way) (Example from: Competing Against Luck: The Story of Innovation and Customer Choice, Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan, 2016, HarperCollins, p. 179-80).

While never losing sight of the needs and experiences of your target beneficiaries and/or customers, when thinking about your competition, it may be useful to consider:

  • The Power of Elimination: Are there any elements of the product or service your competition offers that can be eliminated because they are not key to the user’s experience?

Key Tip: Feature Focus

 Any time (!) your competitor is doing something different from you ask why, and what insights it can give you as to your ability to meet your customer/beneficiary needs. Eliminate any feature of your product or service that is irrelevant to the learning you need for the stage you are at. 

  • The Power of Reduction: Similarly, are there elements that should be reduced well below what is currently offered?
  • The Power of Enhancing: Are there elements that should be raised well above what the competition is offering?
  • The Power of Addition: Which elements should be created that the competition has never offered?[1]

As you develop or grow your social enterprise be sure to keep an eye on your competition and the other products/ services that are available to your desired customers. There is a vast amount of intel to gather from these organizations and learning from their previous iterations/ evolution presents you with the ability to avoid the same pitfalls and missteps they have dealt with.

For more insights on the importance of learning, check out our Key Mindsets blog

 

Identifying stakeholders and how to engage them in your social enterprise is no easy task, if you have any questions about the content of this blog please contact us at info@tricofoundation.ca.
This blog is part of the Trico Foundation’s effort to capture what it learns as it works to close gaps in society by building capacity and innovation in social entrepreneurship. The flagship effort in this regard is our A.S.E.S.S. TLC (Tools, Links and Coaching) page where you can find most of our thinking on these issues and worksheets designed to help advance your social enterprise idea. Stay tuned for further blogs on the entrepreneurial mindset (including crossing the chasm, effective learning, and overcoming cognitive bias) and the mechanics of successful social enterprises.

We are excited by the progress we are making, but know we still have much to learn. We would value your perspective and feedback. Please join the conversation on twitter.

Resources Utilized:

Maurya, Ash. Running Lean: Iterate from Plan A to a Plan That Works. O’Reilly Media, Inc., 2012.

Aulet, Bill. Disciplined Entrepreneurship. John Wiley & Sons, 2013.

Christensen, Clayton M., Taddy Hall, Karen Dillon, and David. S. Duncan. Competing Against Luck: The Story of Innovation and Customer Choice. HarperCollins, 2016.

Collins, Jim. Good To Great: Why Some Companies Make the Leap…And Others Don’t. HarperCollins. 2001

Dyer, Jeff; Gregersen, Hal; Christensen, Clayton M.. The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators. Harvard Business Review Press, 2011

Gunther McGrath, Rita, and Ian C. MacMillan, Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business Review Press, 2009.

MacMillan, Ian and James Thompson. The Social Entrepreneur’s Playbook. Wharton Digital Press, 2013.

Michelman, Paul. “Why Eric Ries Likes Management.” Strategy + Business Online, 15 Jan, 2014, accessed www.strategy-business.com/article/00224?gko=82198

 

[1] Blue Ocean Strategy, W. Chan Kim and Rene Mauborgne, 2015, Harvard Business School Publishing Corporation, p. 31.

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