Review: Doing business with integrity

"Stakeholder Power: A Winning Plan for Building Stakeholder Commitment and Driving Corporate Growth'
By Steven F. Walker and Jeffrey W. Marr
Perseus Publishing, 257 pages, June

By Porter Anderson
CNN Career

(CNN) -- "Although it is not that difficult to envision a stakeholder focus in running a business," write Steven Walker and Jeffrey Marr in "Stakeholder Power," "it is exceedingly difficult to implement such a focus."

This must be true. Because the market seems evergreen for books recommending one common business point -- the better relations you have with your customers, employees, suppliers and investors, the better your corporate performance will be.

Seems simple enough. And recent books taking one or another tack on the topic have included "Slack," "Creative Destruction," "The Boss's Survival Guide," "Enlightened Office Politics" and "Business as Unusual."

The community of constituents in your business -- those folks called "stakeholders" in Walker and Marr's new book -- may not be of use to you, they write, unless you can get those people's commitment. "Corporate principles such as 'safety first,' 'customer satisfaction' and 'treat employees fairly' are often touted on plaques and in annual reports," they write, "but this book goes straight to the heart of meaningful relationships, which means earning people's commitment."

QUICKVOTE Do you buy the emphasis on "stakeholder" relationships in business? Yes. Corporate success is dependent on good human relations. I'm unconvinced. Sounds correct, but I can't see practical approaches. No. This is well-meant, but ultimately not profitable. View Results

When Walker and Marr's company -- Walker Information, based in Indianapolis, Indiana -- surveyed 1,027 executives from large corporations, they found that 93 percent of those execs said customers and employees are, indeed, stakeholders in their operations. They gave customers a slight edge in terms of importance. In the United States, Canada and South Africa, employees were rated nearly as important as customers in decision-making issues.

And yet what Walker and Marr know and wrestle with here -- like the authors of so many other books -- is the peculiar resistance that corporate cultures seem to have to making commitments to these people and thus securing their loyalty in return.

Clearly, the brass ring is "customer relations management" -- or "CRM" as its acronym is buzzed in these post-"leadership" days of business. Isn't it odd that at a time when good service seems as hard to achieve as nirvana, everybody's talking about being nice to customers? Obviously, there's a disconnect here somewhere.

Setting aside some thorny questions of privacy being debated in Congress this week, Walker and Marr recommend companies consider Jiffy Lube's system. Once a single visit has been made to a shop, any of hundreds of the company's employees can simply enter a customer's license plate number on the next visit and know the car's service history, what work is normally performed on it, etc. With adequate respect for privacy, the authors suggest, knowledge of your customers is power.

The employee gap

"It is always a mistake," write Marr and Walker, "to operate as if employees are dispensable or easily interchangeable, because they are not. By definition, we cannot have an organization without the right employees -- people who fit our cultures, who bring the right combination of talent, experience, and personality to our organizations. These people are never easily replaced. Further, how humanely they are treated when they leave has a lasting impact on those who stay. It certainly sends a clear message about the company's commitment to workers."

Steven F. Walker, left, and Jeffrey W. Marr

It's especially interesting to read that passage amid the summer's new spike in jobless claims indicated by Thursday's U.S. Labor Department figures. Walker and Marr seem keenly aware of the dynamic rumbling across the employment landscape today.

"Employees of organizations whose leaders took golden parachutes, cashed in enriched stock options, or received major bonus or salary increases following layoffs will not soon forget the experience," they write. They go on to quote employment analyst Peter Drucker from 1997 in Forbes: "Few top executives can even imagine the hatred, contempt and fury that has been created -- not primarily among blue-collar workers who never had an exalted opinion of 'bosses' -- but among their middle management and professional people. I don't know what form it will take, but the envy developing from (the top executives') enormous wealth will cause trouble."

So how to regain lost trust? United Parcel Service and its post-strike "new loyalty" contract with employees is used here as an example of how to go about it. CEO James Kelly in 1998 outlined it, saying that a measure of employee loyalty "deserves a place on the balance sheet, right next to other key assets."

Among benefits cited by Marr and Walker as being offered employees by Fortune's Top 100 companies to help engender loyalty:

•   Thirty-six of the 58 publicly held firms on the list offer stock options to all their employees

•   Fifty-three firms provide on-site university courses; 91 have tuition reimbursement, with 24 reimbursing more than $4,000 per year

•   Forty-five firms offer reduced summer hours

•   Seventy-two firms have job-sharing options available

•   Eighty-seven firms offer telecommuting positions

•   A compressed workweek schedule is offered by 89 firms

Marr and Walker go on to use a compelling range of hard-experience examples of stakeholder-developing approaches. There are references to Sunbeam, General Mills, Cisco, Sears, MBNA, Novaris, NCR Corporation, Levi Strauss, Lockheed Martin, IBM, LensCrafters, Home Depot, Coca-Cola, Ben and Jerry's, many others.

One answer doesn't fit all, of course. But Marr and Walker can be commended for getting a handle on the issues and offering a range of responses from various companies' efforts in the new-economy upheaval.

"We must commit ourselves to 'wrestling' with this stakeholder stuff," the co-authors write. "Only a brave leader explores what the troops really think. ... But to be a true leader in the new economy, we must earn the trust of all our key stakeholders by learning to place faith in people and by weighing their needs and opinions into our business decisions. If we as managers use tools to listen to them, then collaborate with them fairly and intelligently, we will take care of the business and its constituents and, as a result, take care of ourselves as well."