Stakeholder Capitalism: Turning ESG into Revenue Growth

Engineer wearing a white hard hat on a site taking notes with solar panels in the background. Cora pink and purple gradient in the background and a black gradient on the left.

Twenty or thirty years ago, the assumption was that companies had a choice. You could either do the right thing and address climate concerns and social issues. And then take the financial hit that resulted. Or, you could simply focus on making your business as profitable as possible.

But that was then, and in the intervening years the whole world of business has completely reorientated itself. It’s no longer either or, it’s and. You need to generate profits and do the right thing. Because doing the right thing is what makes you more profitable.

What’s changed is the way people perceive the world of business and commerce. Of the 34,000 people surveyed for the 2020 Edelman Trust Barometer,

“56% believe today’s capitalism does more harm than good in the world.”1

The result is the rise of stakeholder capitalism.

Stakeholder capitalism

In a word, stakeholder capitalism says that the trap many businesses fall into is to focus on short-term revenue goals. Genuine profitability is only possible when your revenue growth is sustained into the medium and long-term. And companies that fail to appreciate this will operate at a competitive disadvantage, and will eventually go out of business.

As Bruce Simpson concludes, in the study he and Dame Vivien Hunt produced for McKinsey,

“Companies with a long-term view outperformed the rest in earnings, revenue, investment, and job growth.”2

And that,

“Happy employees, collaborative suppliers, satisfied regulators, and devoted consumers deliver higher benefits over a longer-term period.”3

Focusing exclusively on the bottom line might have been all right in the past, but for genuine, long-term profitability you need to be as focused on the people around you as you are on your short-term margins. Because we are all customers and workers, and know and are related to people who work along a supply chain like yours.

And many of us are as concerned that what we do and buy, and the services we use, are produced in a way that we’re comfortable with, as we are that they are good value and easy to access. If we’re not happy, we’ll go elsewhere.

ESG metrics

So today’s most successful companies are all focused on doing what they do as responsibly as they can, not just because they want to make the world a better place. But because they understand it’s this that will improve their long-term margins and guarantee their revenue growth.

You reduce legal costs and regulatory interventions, your workers are happier and hence more productive. You make more efficient use of your resources and assets, so you produce less waste. Which then makes you more attractive to investors. All of which, crucially, can be measured.

Your environmental, social and governance (ESG) metrics allow you to demonstrate that you’re not just talking about making changes, you’re actively changing the way you do business.

The right software

So you need to employ a sophisticated software package to manage all your data. It will centralize all that data so that you have immediate access to any of those metrics whenever you need them. And it will keep those metrics permanently up to date, and in real time.

By pulling all your data together and presenting them in easy-to-understand graphs and Gantt charts, you’ll be able to demonstrate the changes you’ve been making, and the results that they’re producing.

And by streamlining your processes, and standardizing the way everyone works, your software package will further improve all those metrics. Because as often as not, waste and cost overruns are as much a result of bureaucratic mismanagement as they are of operational inefficiencies. Your metrics will improve just by being better organized and managed.

Stakeholder capitalism means better margins

Stakeholder capitalism is not a momentary fad. It describes the change that has already taken place in the world of business. Thinking about your customers and workers as people, and about the things that matter to them, improves your bottom line. Because ultimately, it makes the way you do business more efficient.

Your ESG metrics are how you demonstrate that to the people around you. And the right software will provide you with the tools to be able to do that reliably and efficiently.

Watch this project controls video to see the practical ways Cora’s software solution improves your bottom line.

Sources

  1. https://www.edelman.com/trust/2020-trust-barometer/special-reports
  2. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/the-case-for-stakeholder-capitalism
  3. https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/putting-stakeholder-capitalism-into-practice

Related Insights

A team of people having a meeting around a table discussing. Pink and purple gradient lens graphic in the background.
Feb 21 2024

What Are OKRs, and What Are Their 3 Elements?

OKRs are used extensively by everyone from Google and LinkedIn to Adobe and Spotify, and they’re made up of 3 elements. Table of Contents Objectives Key Results...
A large cargo ship carrying containers across the ocean. Pink and purple gradient lens in the background.
Feb 20 2024

Supply Chain Management: The 3 ‘P’s  

There are three areas that efficient supply chain management depends on: Physical resources and operations, Processes and People. 

Civil engineer on a site wearing a high visibility jacket looking at a construction site with a yellow crane. A pink and purple lens icon in the background.
Jan 25 2024

Document Management for Enterprise Organizations: 3 Crucial Areas

There are 3 areas where reliable document management is crucial for enterprise organizations, regardless of the industry.

Human and robot fingertips touch and lightbulb lights up.
Jan 10 2024

AI and Project Management

AI is transforming project management and is changing how PMs operate on three levels: automation, assistance and augmentation.

A man is conducting a meeting with his team in an office.
Jan 09 2024

Change Management: The Key to Digital Transformation

Successful digital transformation depends on two factors; the technology you invest in, and the change management program you devise for your workforce.

Man and a woman wearing glasses discussing work in an office. Both looking at an iPad.
Jan 03 2024

What is Earned Value Management (EVM) and How Does it Work?

Earned Value Management (EVM) is a project management methodology that enables you to integrate scope, cost and schedule.

4 people having a meeting in an office
Dec 06 2023

Project Controls: Deliver Projects on Time and Budget

Project Controls are a set tools that allow you to track costs and schedule to ensure your project comes in on time and on budget.

white TEI report book with navy background
Nov 16 2023

Forrester TEI™ Study Finds Increase in NPV of $30.05M and an ROI of 187%

Forrester’s analysis finds Cora produces efficiency gains worth $25M, improved visibility saving $6.5M, a $7M revenue boost and $4.4M in time savings.