Stakeholder Relationship Management: A New Idea in Marketing

This past January, Time magazine developed a special report, "Getting Smart at Being Good ...  Are Companies Better Off for It?”  Partially answering that question in the article’s subtitle, the report observed, “Not everyone says yes, but a growing phalanx of CEOs thinks that, done right, corporate caring bolsters bottom lines.”  Click here to read the full report.

Five months later, the June 12 edition of Advertising Age carried a special report, The New Samaritans” that observed, “Corporate social responsibility grows as marketers find that doing good is good business.” 

More recently the June 26 issue of Business Week carries an article entitled, “Charm Offensive; Why America's CEOs are suddenly so eager to be loved.”

Not everyone looks on the trend towards more humanistic enterprises in a positive  light. Stephen Bainbridge, a corporate-law professor at the University of California, Los Angeles said in the Time special report, "In a nutshell, the problem with CSR (corporate social responsibility) is that managers who are responsible to all of their constituencies are accountable to one."

But Mr. Bainbridge is dead wrong. He represents the either/or mindset that provides a sharp binary focus, but that restricts creativity. It is a mindset born in Newtonian physics where every event in nature has a predictable cause. But humans are not as predictable many would like, and business corporations as extensions of human personalities similarly resist deterministic explanations of their behavior. Advocates of CSR tend to have a more adaptive view of matters: "There is only so much we can change, but we almost always can adapt."

The number of articles devoted to the subject of corporate social responsibility is rising rapidly. CSR has reached the critical mass of a full-blown movement. One of the casualties of this movement is the silo view of organizational structure. In the companies that we researched for the forthcoming Firms of Endearment (January 2007) there are few if any marketing departments in a traditional sense. Marketing is a company wide function in which in the grocery business even checkout clerks are part of the marketing team.

Interestingly, few of the companies we citedas exemplars in Firms of Endearment have much of an advertising budget. They are masters at creating buzz on a low cost basis. A number of the brands we feature in the book have an almost cultish quality about them. In fact Commerce Bank founder Vernon Hill unabashedly tells his employees, “You are all cult members. And if you can’t buy in, this isn’t the place for you.”

Harley-Davidson, Whole Foods, Patagonia and others we identify as exemplars of CSR hold a special place in the hearts of a large segment of their consumer constituencies. This is true also among their employees, the communities in which they operate and, of course, their shareholders.

Looking at these developments in a marketing context, as the future unfolds, marketing will be  less about creating award-winning ads and more about harnessing the residual energies in all stakeholder groups to shape company success. This is why we prefer the term stakeholder relationship management (SRM) to corporate social responsibility. In fact, we believe that SRM will replace CRM (customer relationship management) as a strategic tool. CRM’s value will be in its use as just another tactical tool used in marketing.

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Reader Dinty Moore hasked me to run a notice on behalf of a new book he is writing:

WANTED: STORIES ABOUT OUR LONGER LIFE SPANS

Seeking stories and people to interview for a book project exploring all aspects of the ways in which we now age, and how folks are adapting to increased lifespans. Themes in the book will include keeping fit enough to enjoy the 70s, 80s, 90s; saving enough for a longer retirement; innovative paths for those post-65; post-retirement careers, jobs, activities, larks; marriages that go on, and on, and on, and on; quirky approaches to the senior years; where to live; senior tourism; organ regeneration; the importance of attitude; and whatever else those planning for or enjoying a long life can tell me.  Interested in stories (and the people with the stories to tell) both happy and not-so-happy, funny and difficult.  If you have a story or know of someone I should interview/profile, please e-mail me at Dinty W. Moore, lifespans@gmail.com

Comments

[John Dodds]

January 2007! No wonder my local bookstore has been professing ignorance.

Has there been a delay because it's been a very long gestation since we exchanged comments back on your Self-Actualising Corporation post? I continue to read the blog avidly though and it informs my own writing.

[Marianne Richmond]

David,

What I have found interesting in my work with corporations,especially in light of your post title, "A New Idea in Marketing" is that many corporations don't look at Stakeholder Relationship or Corporate Social Responsibility as a marketing function or strategy...perhaps the first step to understanding the "new idea" is to understanding the "in marketing" part.

Looking forward to your book.

Marianne

[David Wolfe]

John,

The publisher wanted more time to build anticipation for the book and neither the second half of November nor December are good times to come out with a biz book -- so January it is.

Marianne,

"perhaps the first step to understanding the "new idea" is to understanding the "in marketing" part" -- indeed that is so. Thanks for your interest in my next book.

DBW

[John Dodds]

Not having your email, let me use this method to forward a question - the following is a quote from maurice saatchi of saatchi & saatchi fame that I'm not sure I believe.

"according to neuroscience ... the digital native's brain (by which he means under 25s) is physically different as a result of the digital input it received growing up. It has rewired itself. It responds faster, It sifts out. It recalls less."

Does this sound true and would it be limited to people who have grown up in the digital age - what about heavy users over the age of 25, surely their brain will rewire to some degree?

[David Wolfe]

John,

Take a look at The New Brain: How the Modern Age Is Rewiring Your Mind by Richard Restak. It gets right to the point of your question.

Also coming out in September by Restak, The Naked Brain: How the Emerging Neurosociety is Changing How We Live, Work, and Love. Restak, a prominent neurologist, is an excellent and accessible writer about the brfain.

Best,

David

[joared]

Thanks for the book references -- Restak is excellent.

Am just now catching up with some of your older posts.