Total stakeholder satisfaction

If an organization or team is to perform, the people who have expectations or place demands on that system have to be satisfied.

Many organizations focus on one group of stakeholders at the expense of other groups.

For example, after the Second World War, many organizations in countries such as Australia, the USA, and Canada still had enormous resources, growing internal and external demand, and the commercial advantage of infrastructure still intact. There was little global competition and organizations could thrive by concentrating on shareholder returns. Other organizations in countries such as Japan, deprived of these competitive advantages, strived for financial returns by concentrating on customer satisfaction and quality.

Few organizations would remain competitive in today's world without satisfying rising employee expectations. More and more employees are demanding quality of work-life, greater meaning in their work, autonomy, and a small organizational team to which they can belong. This organizational team serves as the organizational equivalent of the family unit. By focusing on the needs of employees, the most competitive organizations have incorporated the best aspects of home life into the workplace.

Many organizations are replacing historically adversarial relations with their suppliers with a more committed, cooperative relationship. This can contribute to a sustainable competitive advantage and the achievement of major goals for both parties.

Government and regulatory groups are also stakeholders whose expectations and demands have been steadily rising, particularly in the areas of the environment and safety.

So, organizations are arriving at the concept of total stakeholder satisfaction. To optimize the organization system there needs to be an emphasis on the rigorously measured demands and expectations of all stakeholders.

The balanced scorecard is a structured way of building a performance measurement system that links outputs, measures, and targets directly to strategy. The development of outputs, measures, and targets are necessary to implement strategy and provide total stakeholder satisfaction. Once the stakeholders have been identified, the next step is to find out exactly what the stakeholders’ expectations are.

It should be emphasized that all stakeholders care about the welfare of the entire organization. So while stakeholders are identified with particular outputs, they are all generally concerned with the overall optimization of the organization as a total system.

The step of weighting the targets enables the strategic goals to be balanced and clarified so as to achieve the overall aim of optimizing the business system to achieve total stakeholder satisfaction. This will ensure that the needs of one stakeholder are not optimized at the expense of other stakeholders.

For more information, we refer you to our best selling book: What do I do on Monday morning?

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