First of all, I was not ready for the first definition of what a stakeholder is:
So now instead of thinking of some sterile boardroom with no windows where stakeholders go to argue, I'm going to think about gambling in saloons in the wild west like one of my favorite shows: Deadwood.
The stakes are high. Luckily they aren't life-or-death (unless you're shopping for toys around Xmas).
Entrepreneurs try to satisfy multiple groups of people at the same time. They of course try to satisfy customers of their fine establishment. They claim to offer a fair deal in exchange for what the customer needs and wants.
Behind the storefront of the entrepreneur are both the suppliers of materials and skills, and the investors in the business venture itself. While we tend to look at the suppliers through the lens of a business, we need to keep in mind that the entrepreneur's business is also a customer of the supplier. And that supplier is a customer of its suppliers. And this goes on all the way down to the person who owns the title to the land.
Let's take a look at how different groups of people relate to the three core business functions:
And if that's too loud for you:
|Inside The Business||Function||Outside The Business|
So the stakeholders of a business are those that have 'money on the table'. Prospects may want to get in on the game, while customers have their money on the table. Suppliers' stake in the game of business is providing businesses with the services and tools (resources) the employees of the business use to satisfy customer wants. And owners borrow money from lenders to start and grow the business.
So now what?
You can use this to understand not only what's going on with your competitors and your suppliers. Who are your competitor's suppliers? Are your suppliers better than their suppliers? Competition isn't just inside the walls and network of your competition, it's linked with who supplies them too.
If you have a critical supplier, communicating with them regularly, and not just their sales team, is important.
In Clockspeed Charles Fine reported that a major American auto manufacturer was visiting its supplier's suppliers and learned that one of them was going out of business. The problem was that this supplier made a critical piece of their cars, and if that supplier went belly-up, no. more. cars. While that's an extreme case, call your suppliers and lenders quarterly.
Well, there's not many 'actionable' things that we can do with this knowledge of stakeholders. As entrepreneurs, the best we can do is dedicate some time in our schedules to make sure we're satisfying all of our kinds of stakeholders. By slowly but surely giving each of these more of what they want, we can grow our businesses in a balanced way.