Don’t Confuse the Rare with the New

March 06, 2024
By Lori Teranishi
illustration of people walking

For years, a small number of business leaders have understood that long-term, sustainable business success is a function of managing a complex web of stakeholders. Understanding, prioritizing and managing the various interests of employees, customers, investors, business partners, community leaders, suppliers, policy makers, regulators and others is enormously challenging. And that challenge is only increasing with declining trust in institutions, climate change, geopolitical isolationism, the proliferation of social media and the rise of artificial intelligence.

In a previous blog post, I described one of the takeaways from the Yale School of Management program I recently attended on CCO Leadership in Multistakeholder Value Creation. Another takeaway is this phrase that the amazing Jon Iwata, a co-founder of the program, said several times: “Don’t confuse the rare with the new.”

 

Lori Teranishi and Jon Iwata giving a shaka.

With Jon Iwata, a co-founder of the CCO Leadership Program at Yale School of Management.

 

The most successful businesses fundamentally understand that consistent, long-term profitability is not at odds with good corporate relations; on the contrary, the two are inseparable. Understanding and responding to the full complement of stakeholder interests is exactly what’s required to succeed financially. While it’s not a new concept, it’s unfortunately rare to find companies that embrace this approach.

Too often, stakeholder relations (and corporate communications more broadly) is viewed as a cost of doing business — a sort of tax incurred reluctantly to mitigate downside risks like regulatory changes, employee activism and customer dissatisfaction.

 

"Understanding and responding to the full complement of stakeholder interests is exactly what’s required to succeed financially. While it’s not a new concept, it’s unfortunately rare to find companies that embrace this approach."

 

Yet that view ignores the value that’s created when stakeholders support the business — reducing friction and enabling it to reach its objectives more quickly. This is why the world’s highest-performing companies use their purpose and values to define their market space, not the other way around. This the way of the future, we have the opportunity right now to make the rare a mainstream business practice.