Are Evolving Stakeholder Expectations Affecting Your Business, Its Products, and Its Leadership?

In January, Raj Aseervatham published a thought-provoking book entitled Leading Tomorrow: How Effective Leaders Change Paradigms, Build Responsible Brands, and Transform Employees, which addresses the evolving expectations of the stakeholders -- such as, customers, investors, society, governments, and employees -- regarding businesses and their products and how leadership must respond.  These stakeholders are increasingly making choices about if or how they support businesses – through the purchase of their products and services, shareholdings and financing, regulatory approvals, and even experiences working for them – based on not just what a business does, but how it does it.

Raj's book considers how the emerging generation of leaders must change paradigms and transform their employees to do more than just operate a business. It examines how to effect culture shifts that are necessary to innovate businesses so that they simultaneously meet market needs while meeting stakeholder expectations on concerns as varied as ethical business conduct, labor practices, climate change, responsible use of diminishing natural resources, and contribution to socio-economic challenges in their market catchments.

When I spoke with Raj this month, I asked him: "How are stakeholder expectations changing regarding supporting businesses? What paradigms must leaders change to meet these new expectations?" 

Here is his complete answer:

The three most significant support groups for successful businesses are customers, investors, and employees. These stakeholder groups are part of a larger ecosystem; our increasingly interconnected, increasingly knowledgeable society, and the communities of which we are a part. 

Societal awareness of the environmental, social and governance (ESG) problems that society faces grows daily. As the world’s population increases, these problems grow and exacerbate each other. Climate change, ecological breakdown, water contamination, air pollution, pandemics, corruption, infractions of human rights in the supply chain, gender and cultural discrimination, and many others take a compounding toll on society. 

Unsurprisingly, an increasing proportion of stakeholders demand to know what businesses are doing to diminish these problems. They disassociate from those businesses that worsen the problems and migrate to better-performing competitors. Their insights improve continually. Greenwashing and PR are more easily seen through. 

As this awareness extends across and deepens within society, customers, investors and employees are making more informed choices about who they will buy from, who they will invest in, and who they will purposefully work for. These trends amplify as older generations give way to younger generations and new values supersede old ones. Commodity markets, money markets, and human resource markets adapt to these inexorable trends. 

Business leaders are seeing these ESG issues as the new frontier of strategic management. Responsible businesses are more likely to sustainably prosper. 

Leaders must now understand the myriad issues and own the most important ones in the context of their business stakeholders and business strategy. Then they must authentically lead their employees to meet or exceed rapidly changing stakeholder expectations of responsible business practice. Growing and harnessing such societally attuned business cultures will increasingly define successful business leaders. 

Like any journey of authentic and transformative leadership, the first steps are taken within the leader. This book provides illumination to guide those first critical steps to leading tomorrow.

What do you think of Raj's perspective? Have you seen a shift in your customers' and stakeholders' expectations? What steps are you taking to address these new expectations? 

How Do You Grow and Sell a Successful Consulting Firm?

This past month, Raj Aseervatham, published an important resource for consultants titled You're the Boss: Growing and Selling a Successful Consulting Firm. The book is segmented into nine distinct lessons charting the journey of a successful consulting firm—from inception to sale.

I just recently spoke to Raj about the book and asked him: “What are the most common mistakes business owners make when they try to grow and sell a consulting firm?” Here is his complete answer:

Most people are familiar with this statistic -- eight out of ten businesses fail. Paradoxically, most entrepreneurs firmly believe they will be in the 20% that succeed. Do they really know why they believe that? Let’s look at the knowledge that consulting entrepreneurs who actually made the 20% reflect on:

1. Failed consultancies often lack a clear strategy. Having a concept is not the same as having a strategy. Being very specific about your business – what it does, how it’s structured, what maturity looks like, what your sale looks like – help fill in strategy. As the head of your company, no detail is too small for you to contemplate.

2. Failed consultancies often have poor planning discipline. Having a plan is the same as preparing to execute a strategy. Abraham Lincoln Abraham Lincoln once commented that if he had six hours to cut down a tree, he would spend the first four hours sharpening the axe. Invest your time in detailed six-monthly or annual plans, test your assumptions, iterate the plan frequently. Don’t treat it as an administrative chore. Your planning is your preparation and dress rehearsal.

3. Failed consultancies often die of cash starvation. Watch your cash. This is not the same as saying "get your accountant to watch your cash." You are intimately familiar with your strategy and your plan, not your accountant. Cash flow is like the blood flow in your business; you need it to carry out your plan and execute your strategy. You need to know how much you need and when, and you need to know that your business operation will deliver it. So be intimately familiar with your cash flow.

4. Failed consultancies are often inconsistent with their quality. If you promise something, deliver it to the standards expected. Do not compromise the quality your clients pay for. As you hire more consultants into your business, your quality standards might be prone to variation, and to dilution. If this happens, your brand erodes while you grow.

5. Failed consultancies often forget what made them contenders. Don’t let your principles erode with time. The consulting entrepreneur may start with strong ideals – from client service through to cash management, through to the ethical decision making, to how employees are treated. Often, small companies are formed around a core of pride and value, built on principles.  As they grow, that core can become less distinct and the culture can change. Be firm on how you retain and strengthen the principles that allowed you to first break successfully into a market.

6. Failed consultancies forget that their people make up nearly 100% of their tangible assets. Hire slowly and deliberately. Treat every hiring decision like it is your first excruciatingly important one, and you are more likely to build a consulting firm of people who can create lasting value.

7. Failed consultancies do not have a consistent focus on business development. Practice business development even when your business is booming; and especially when your business is booming. The worst time to dust off your business development skills and deploy them into the market is when business is bad. The best time to grow your business is when business is good, so get out there and market in the best of times like it’s the worst of times. In fact, practice business development all the time if you really want to grow.

8. Failed consultancies allow their overheads to get away from them. This is not the same as running your enterprise like Scrooge; you may find that no-one will want to work for you! No, this is about knowing what a manageable overhead structure looks like at every stage of your growth, and ensuring you run your business according to that structure. It’s about considered discipline.

For the consultants reading this post: What do you think of Raj’s points? Does one of these points stand out from the rest? Did he miss any important areas?