Healthy organisations are creating value for their stakeholders (customers, employees, shareholders, partners, society, …). This is what brings them sustainability, prosperity and legitimacy.
Sooner or later organisations will suffer if they fail to deliver value to some or all of their stakeholders. Eventually, they will pay a price in terms of sustainability, prosperity, or legitimacy.
As much as they need to create value for their stakeholders, healthy organisations need to receive value from them. The inability to get adequate value from their stakeholders can affect sustainability and prosperity.
“High-value organisations” optimise the value they create for their stakeholders as well as the value their receive from them.
In a fast-changing environment with unprecedented challenges, yesterday’s value may quickly fade out. Value actualisation is key.
Some organisations are thriving not because they are creating value for their stakeholders, but because they are exploiting them. We believe however that organisations that deliberately mislead, exploit, or abuse will eventually pay a hefty price for it, in terms of legitimacy, sustainability or prosperity. We believe that value-based business models are more resilient and certainly more inspiring that exploitative business models.
Organisations need to embrace the concept of “systemic value”, where value to and from all stakeholders is taken into tconsideration. Creating value for one category of stakeholders at the expense of the others is the negation of systemic value. Exclusive focus on shareholders’ value, client centricity or employee well-being is myopic. Organisations embracing systemic value can broaden up their horizon to the concept of “eco-systemic value” where they consider their impact on the global eco-system in which they operate.
Creating systemic value is complex. Organisations are themselves complex systems and are facing conflicting demands from their stakeholders. They are subject to multiple, often contradicting constraints. Things are not black or white.
To become a high-value organisation (or to grow even further in that direction for organisations that already qualify), organisations must focus on five key areas: leadership, strategy, organisation and processes, human and social capital, and communication. When these five elements are aligned to create value, magic happens.