Stakeholders: What's in it for them?

Excerpt from a 2017 podcast with Dr. Chad McAllister at The Everyday Innovator

Chad: Like the title of your book, [Re]Create the Organization You Really Want, I see a key benefit is making the organization you want to work in, and everyone else wants to work in.

WIIFM?

John: That’s the “what’s in it for me,” or the WIIFM part, right? It’s your opportunity to create the organization you want to work inside and be a part of. All too often, we end up in organizations someone else designed. Entrepreneurs get to create their organization from scratch, but they often don't do it consciously, so the book is useful for recreating or redesigning it. It’s also helpful if you’re designing it for the first time. You’ve got a viable product and sales, and you have to scale up and create a real organization. The same blueprint in this book will help you do that. It’s about creating the one you want and the one you would like to work in.

Empathy

But it’s not just about you; it’s about you having empathy for all those stakeholders and what it’s like to be them inside your organization. It is essential for product design because we’re trying to provide solutions customers want and will pay for. So we know that empathy’s essential there. But from a business designer perspective, if you’re the owner or a senior leader, the design is often for your personal 401(k), your retirement, flipping it, or whatever your objective is; you may not care about all those other stakeholders. Our focus is on a situation where you care about creating a sustainable company, even if you’re going to sell it. You should be able to get more money for a sustainable company than one that’s doing boom-bust cycles and where the future is uncertain. It should be more valuable to everybody, including the investors.

System

We’re starting to realize how much risk is tied to poor social and environmental performance, including the financial implications. Many of our ecological challenges also involve waste, which costs money. That’s good news. All too often, we see some of these as trade-offs. But this isn’t about a zero-sum game of making trade-offs. It’s about redesigning things so that they create value for multiple stakeholders. That’s why a systems view is so essential to good design: you have to understand that better supply or partner performance and better workforce performance, when you combine those with better systems and processes, produce better products and services and create happier customers who buy more from us and bring their friends with them: referral business. So you get repeat and referral business that grows the top line and makes the investors happy.

This is a dynamic system, and good design requires you to view it as one. Otherwise, you’ll make design decisions based on unnecessary trade-offs. As organizational designers, we still face trade-offs. Sometimes we have to make them because our imagination isn't good enough yet, or our creativity hasn't come up with a solution that lets us deliver value to all stakeholders in every situation. I’m not saying trade-offs don’t happen and aren’t required. We have constraints, have to make trade-offs, and do it all the time, but the notion is that we make those when we can’t figure out a better way.

The video is an excerpt from a 2017 podcast with Dr. Chad McAllister at The Everyday Innovator. For more podcasts on innovation and product development, check out the podcast on his website and iTunes.