I was just referencing friend and colleague Stephen Denning, a Forbes contributor and author of The Leader’s Guide to Storytelling: Mastering the Art and Discipline of Business Narrative. Denning asserts in his Forbes post that:
a growing number of CEOs agree: shareholder value theory is stupid
Benioff offers the following as an initial list of stakeholders
- the environment
- and any other entity impacted by its operations
This more holistic, systems approach to thinking about business is crucial and necessary as businesses seek to understand not only their environmental impact, but the very human impact of poor business practices. It is not enough to look locally, which shareholder value encourages, but to truly look globally at the impact of a business, regardless of where its headquarters sit. A business’s employees, products and services reach across the globe, and the evaluation taking place in board rooms needs to go beyond revenue to sustainability, and that doesn’t just mean environmental sustainability, but market sustainability, knowledge sustainability and its related business continuity. Shareholders win when they sell their stock at a profit. And that goal often encourages poor practice. For institutional shareholders, the benefit usually derives from returns collected over many years — only if the business stays in business will this happen. Businesses then must focus on sustainability first, and growth second. Unsustainable growth may make money in the near-term, but it does so with costs born by stakeholders that aren’t reflected in the cost models of products or services. Near-term gains may ultimately result in dissolution. By baking in the broadest level of sustainability into corporate strategy organizations can find ways to navigate for survival, which in the long-run, is the only winning play.