The 6 business stakeholders
Summary
Every business has the same 6 stakeholders: employees, customers, the broader community, your business, suppliers, and owners. You can't ignore any of them and you have to make tradeoffs on a daily basis. Also, be honest with yourself: pretending to serve all stakeholders equally is intellectually dishonest and will lead to ineffective and inconsistent decision making.
The priority order of this list is not set in stone; it's up to the founder, CEO, or leadership team to determine the priorities and consistently act on them. This is a numbered list, take the time to prioritize it. Over time, a lack of clear prioritization becomes painfully obvious to all stakeholders. How you engage with others is so foundational that failing to plan ahead is ultimately planning to fail.
Your stakeholders
- Employees & contractors
There are two broad groups of employees: people that do the work and people that manage those people. Boards and founders need to recognize this distinction and have different expectations for each group. If employees don’t know what’s expected, aren’t paid fairly, or feel like nobody has their back, things will break. Unfortunately, these relationships, like all human relationships, take time. Trust isn't granted — it's earned through actions, not words. Some types of work naturally require more trust than others. If you work in a restaurant you'd like to trust your colleagues but if you're literally going to war you really have to trust your colleagues. - Customers & users
Without customers, there’s no business, so staying close to them is non-negotiable. Personas, industry segments, and ICPs aren't actual customers though. Individuals are trying to solve their specific problem(s), and their unique circumstances are what matter to them. Your role is not to constantly react to every customer issue that arises, but rather to ensure your team has the clarity, support, and systems needed to solve problems for these individuals and support the organization's strategic vision to ensure you're building a sustainable business. - Community
Your community includes all other impacted, non-transacting parties. Ignore this group and eventually someone with more time, influence, or lawyers will make your life harder. That includes regulators, neighbors, advocacy groups, or even just a viral Twitter thread. Don’t wait for a crisis, operate with decency, foresight, and be a good neighbor. - The business, products & services
You can't scale people, only systems. When your internal systems are slow, inconsistent, or manual, it diverts time to lower value tasks, drains your team, and kills margins. Early decisions here compound fast — get it right, and everything moves easier; get it wrong, and you’ll pay for it every day. The best companies earn a premium because they build for scale (just) before the pressure hits. - Suppliers & partners
Every business relies on others; this includes vendors, platforms, partners, distributors, manufacturers, and anyone else that helps you build or sell your products & services. Building trust with suppliers and partners is crucial. You aren't building in a vacuum and you are dependent on others to ensure your success. - Owners, investors, and creditors
These are the people who took a bet — this may be you, VCs or angels, or debt lenders. If that includes outside capital, take the trust seriously. What they expect isn’t complicated: honesty, clear communication, focus, and hopefully results. Ironically, the best way to serve this group is to put them last, more specifically, to put short-term shareholder returns last. When the other pieces of the business also fit together, more durable long-term returns follow.
In this article, we’re referring to broad groups of people, so stakeholder seems more appropriate. Just don’t lose sight of the human impact of the decisions you make — your stakeholders certainly won’t.
Prioritizing stakeholders
Prioritizing stakeholders is an ongoing exercise that requires regular consideration. The value lies in understanding how each stakeholder influences your business and making decisions that reflect your priorities. How you prioritize this list should shape how you allocate time and resources and the kind of company you build.
For example, when employees are supported, empowered, and trusted, customers notice. When customers are happy, the business grows. That growth benefits the community around it, strengthens partnerships with suppliers, and rewards investors. There's a flow to this, and ignoring it can lead to declining morale, customer churn, and reputational damage.
You can choose a different order than above — many do, especially public companies. The tradeoffs are very apparent with each round of layoffs and less apparent with each smaller tradeoff you & your organization make. But the results aren't theoretical; they show up in how employees engage with their work, how customers experience your business, the quality of your product or service, and eventually, in your financial performance. Boards and leaders who consistently invest in stakeholder experience, especially employee experience, and back it up with action will outperform their peers over the next decade.
You're not done
Every decision you make balances competing interests. Some tradeoffs are obvious and others are less visible until they pile up. Have a customer threatening to churn unless you get a feature built this week? Did you ask your engineering team to go overtime to keep the customer? That's a customer > employee tradeoff. In isolation there's nothing inherently wrong with that decision but you need to consider the long-term implications of that choice with other tradeoffs, we don't make decisions in isolation.
The purpose of this article and exercise isn't so you can make perfect decisions – it's to improve decision making by building the habit of thinking about who benefits in the short and long term, who doesn't, and what that means for each of your stakeholders, your business, and the ecosystem you operate within. This isn't a one time strategic offsite exercise, making decisions is the job. By strategically and consistently prioritizing the needs of your stakeholders, day in and day out, leaders and companies will build stronger, more resilient teams, create better products, and ultimately drive long-term business success.
Disclaimers
- This stakeholder list isn't mine. I once worked for a fast growing restaurant tech company and became familiar with Union Square Hospitality Group as well as their wonderful founder Danny Meyer. This post applies his insights and adds a some flavor.
- This article includes Amazon affiliate links: if you click on one of these links and purchase a product, I may make a small commission.
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