yale center for customer insights or distribute

In partnership with

Stakeholder Capitalism:Does a new mindset require new management science?

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Modern business is being redefined.

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Marketing has an opportunity to redefine its role for this new future.

We can bring historic strengths plus new approaches and techniques to shaping the future.

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

What is that future?

Sustainability

Purpose

Business Roundtable

commitments

ESG

Stakeholder capitalism

Conscious capitalism

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

It is:

+ creating value for multiple stakeholders who impact the success of the enterprise+ activated through strategic and operational choices+ promises + actions

It is not:

+ a new economic theory+ about social responsibility only+ a communications strategy or platform+ without its critics

What is stakeholder capitalism?

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Why now?

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

The new workforce

Finding, keeping top talent is #1 stress point for executives.¹

82% of Fortune 500 executives don’t believe their company recruits highly talented people; 93% don’t believe they retain high performers.²

Millennials and Gen Z make up more than half the workforce today.3 Millennials will be 75% of the workforce by 2025.⁴

75% of Millennials want to work with people and organizations that share their values.5 83% would be more loyal to companies that allow them to contribute to social and environmental issues.6 75% would take a pay cut to work at a socially responsible company.⁷

71% of employees think it’s critically important for their CEO to respond to industry issues, political events and national crises.⁸ Almost 50% of millennials have engaged in employee activism through petitions and walk-outs.⁹

1 The Conference Board 2 McKinsey 3 World Economic Forum 4 INC 5 American Express 6 Forbes 7 Forbes 8 2019 Edelman Trust Barometer 9 Forbes

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

The new customer

About 70% of millennials actively consider company values when making a purchase.¹

42% of millennials say they have begun or deepened a business relationship because they perceive a company’s products or services to have a positive impact on society and/or the environment.²

38% of millennials have initiated or deepened relationships with a business whose products and services have a positive impact on the environment.3

80% of millennials would be willing to pay more for a product that is environmentally and socially responsible.⁴

1 Forbes 2 Deloitte Millennial Survey 2019 3 Deloitte Millennial Survey 2020 4 Deloitte Insights

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

The new citizen

70% of Americans want CEOs to take stands on important issues.¹

When a company is silent on an important issue, more than half of Americans believe that company lacks integrity.²

56% of Americans trust corporations, while 50% trust media and 48% trust the government.3

72% of Americans trust companies over the federal government to help find solutions related to the COVID-19 pandemic and racial equality movement.⁴

Millennials’ trust in religious organizations, national news media, is declining, while their trust in large corporations is rising.5

1 Axios + Harris Poll 2 Axios + Harris Poll 3 Edelman Trust Barometer-Spring 2020 Update 4 Axios + Harris Poll 5 Pew Research Center

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

The new investor

“The Great Wealth Transfer”¹ is underway: Millennials will inherit anywhere from $30² to $68 trillion3 over the next couple of decades.

In 2018, sustainable investing in the US totaled $12.0 trillion – 26% of total assets under management – an increase of 38% from 2016.

Globally, sustainable investments totaled $30.7 trillion, roughly 39% of professionally managed assets.⁴

Projections estimate sustainable investments will grow to $50 trillion globally over the next two decades.5

1 https://www.nytimes.com/2019/12/18/arts/design/great-wealth-transfer-art.html 2 Morgan Stanley 3 CNBC 4 2018 Global Sustainable Investment Review 5 CNBC

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Why. What.The How

Is new management science needed?

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Derive Value Propositions

+ Competitive Assessment+ Must Do/Choose to Do

2Define Impact Program

+ Materiality Assessment

3Measure Authenticity Gap: Promise/ Performance

5Design Impact Program

+ Write the Conjoined Brief+ Generate Conjoined Solutions

4Define StakeholderThesis

+ Purpose

1

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute







+ Purpose



3

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

“The trouble with such CEO advocacy is a lack of clarity about its motivations and impact—on the issues themselves, as well as on the businesses in whose name it is undertaken.

Although a lot of it is probably well-meaning, it is muddied by suspicions of hypocrisy and grandstanding.”

– THE ECONOMIST The Political CEO Yale

Cen

ter fo

r Cus

tomer

Insigh

ts

Do not

Duplic

ate or

Dist

ribute





+ Purpose





4

Write the Conjoined Brief

01De-select irrelevant stakeholders

03Capture constraints

04Identify conjoined constraints across stakeholders

Generate Conjoined Solutions

06Iteration

05Ideation

02Micro-select most critical stakeholders

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Design depends largely on constraints…Each problem has its own peculiar list.”

– Charles Eames

“

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Nike: Lowest Carbon Shoe Ever

Customer Supplier Shareholder SocietyWorkforce Community Government

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Customer Supplier Shareholder Society


Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

● Seamless combination of design, performance and sustainability

● Must meet the Swoosh Standards

+ Athletic Performance+ Durable+ Evokes potential, inspires+ For global taste+ Not one-size- fits-all solution+ Affordable

● Manufacturers must be near the trash

● Manufacturers must embrace a new Nike standard of perfection

● Manufacturable in volume

● Lowest carbon inclusive of packaging

+False constraint: Consumer expectations of ‘out of box’ Nike experience


● Profitable

● At scale

● Contribute to low carbon future

● Do more than popularize a shoe—start a movement

+ Change what consumers expect and ask of a shoe, including packaging


Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute







● Profitable

● At scale








Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute







● Profitable

● At scale

DESIGNER QUESTION

How to make a shoe out of trash that still meets the Swoosh standards?

MANUFACTURER QUESTION

How do you manufacture at scale, with quality, using trash?








Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

“Just because you have a noble purpose doesn’t mean the challenges of business will take care of themselves magically.

This requires great management. Great managers design systems for people to do great work. Business systems – supply chain systems, compensation systems that create the right behaviors – these are the result of hard core management.

Without great management systems, great leadership cannot be scaled.”

– Jim Citrin, Leader of North American CEO Practice, SpencerStuart

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

AMEX PHOTO

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

American Express: Small Business Vibrancy

Merchants/ Small Businesses

● Immediately generate foot traffic

● Help merchants help themselves

+ Enhance their business literacy

● False constraint: Do not favor Amex cards, services

Government / Regulators

● Demonstrate concrete action to revive economy

+ Focus on helping small, local businesses and communities

Consumers

● Build agency

+ Provide actions they can take to revive local economy

● Demonstrate actions to counter #OccupyWallSt sentiment

Partners

● Leverage Amex convening power

● Build agency— provide actions they can take to revive the economy

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Three wishes: Create a Highly Valuable Company in the Healthy Food Segment

Consumers

● “Three Wishes”

+ Grain-free+ High protein+ Low sugar

● Tastes likecereal

● Texture like cereal

● Affordable

Retailers/Buyers/Cereal Category

● Grow category

● Competitive margins

● High velocity

● Buyers must embrace grain-free

Investors/Potential Acquirers

● Profitable at scale

+ Outstanding margins

● Buying a great company, not just great product+ Great brand+ Great culture+ Great distribution+ Great products

Employees

● Culture is our X Factor

+ Scrappy+ Mission+ No jerks

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute





+ Purpose





4






Generate Conjoined Solutions

06Iteration

05Ideation

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Design Impact Program


4






Capture Constraints

● Problem Framing

● Active Listening

● Jobs to Be Done

● Jobs-Based Interviewing

● Empathy

Tools

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Design Impact Program


4






Tools Capture Constraints

● Problem Framing

● Active Listening

● Jobs to Be Done

● Jobs-Based Interviewing

● Empathy

Generate Conjoined Solutions Ideation

● Design thinking

● Crowdsourcing

● Functional Organization: Experts leading Experts

● ISRU: In-Situ Resource Utilization

06Iteration

05Ideation

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute









+ Purpose

1

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

Go deeper.

Participate in an interview

Prototype to learn.

Jon Iwata [email protected] Dhar [email protected]

01

02

03

Yale C

enter

for C

ustom

er Ins

ights

Do not

Duplic

ate or

Dist

ribute

yale center for customer insights or distribute

Documents