In this video, presented by The Spiritual Capital Project at Yale University, Jean Blackwell, former CEO of the Cummins Foundation and former Executive Vice President, Corporate Responsibility at Cummins Inc., explains why Cummins listens to stakeholders as well as shareholders.
Her message is simple: companies that only focus on short-term shareholder returns can miss the people and relationships that make long-term success possible. By listening to employees, customers, suppliers and communities, organisations are better able to build trust, identify risks, recruit talented people and make decisions that support sustainable growth.
Video - Why Cummins listens to stakeholders
Why listening to stakeholders matters
Listening to stakeholders means more than asking for opinions. It means understanding how decisions affect the people, groups and organisations connected to a business, project or change initiative. Stakeholders may include employees, customers, suppliers, local communities, investors, regulators, project sponsors, users and delivery teams.
The key message from Jean Blackwell’s video is that a company focused only on shareholders can become too short-term in its thinking. Shareholders are important, but they are not the only group that determines whether an organisation succeeds over the long term. A business that wants to be successful decades into the future also needs talented employees, loyal customers, reliable suppliers, supportive communities and a reputation for acting responsibly.
Stakeholders vs shareholders
A shareholder is a person or organisation that owns shares in a company. A stakeholder is any person, group or organisation that can affect, or be affected by, the decisions and actions of a business or project. All shareholders are stakeholders, but not all stakeholders are shareholders.
For example, employees may depend on the company for income and career development. Customers depend on the company for products or services. Suppliers may depend on the company for orders and long-term partnership. Local communities may be affected by jobs, environmental impact, traffic, investment or corporate behaviour. These groups may not own shares, but their support can be essential to long-term success.
The Cummins stakeholder model example
In the video, Jean Blackwell explains that Cummins adopted a stakeholder model many years ago. Her argument is that organisations make better long-term decisions when they consider the full range of stakeholders, rather than focusing only on short-term shareholder returns.
She gives examples linked to employees, customers, communities and international growth. If a company wants to recruit the best people, sell to diverse markets, build strong supplier relationships and operate successfully in different communities, it needs to think beyond the next quarter. It needs to build trust over many years.
This is one of the central ideas in stakeholder theory: organisations create long-term value by understanding and balancing the needs of the people who make success possible.
What project managers can learn from the stakeholder model
The same principle applies to projects. A project that only listens to the sponsor, the budget holder or the most senior stakeholder may miss important risks and requirements. Users, support teams, suppliers, operational staff, finance teams, compliance teams and customers may all see problems that senior stakeholders do not see.
Listening to stakeholders helps project managers to:
- identify requirements earlier;
- spot risks before they become major issues;
- understand resistance to change;
- improve communication and trust;
- build support for the project;
- make better decisions about priorities and trade-offs;
- avoid delivering a solution that works on paper but fails in practice.
How to listen to stakeholders in practice
Stakeholder listening should be planned and active. It is not enough to send one email or hold one meeting at the start of a project. Stakeholder views can change as the project develops, especially when people see more detail about the solution, timeline, costs or impact on their work.
A simple stakeholder listening process is:
- Identify stakeholders - list everyone who can affect or be affected by the project or decision.
- Group stakeholders - consider categories such as employees, customers, suppliers, users, managers, regulators and community groups.
- Prioritise stakeholders - assess influence, interest, impact and level of support.
- Ask useful questions - find out what they need, what they are worried about and what success looks like from their point of view.
- Record feedback - keep a clear record of issues, concerns, requirements and decisions.
- Respond visibly - show stakeholders what has changed, what has not changed and why.
- Review regularly - revisit stakeholder needs throughout the project or business cycle.
Questions to ask stakeholders
Useful stakeholder questions include:
- How will this decision or project affect you?
- What are your main concerns?
- What would make this successful from your point of view?
- What risks do you think we may have missed?
- Who else should we be speaking to?
- What information do you need from us?
- How often would you like to be updated?
- What would cause you to resist or reject the change?
Common stakeholder listening mistakes
Common mistakes include listening only to senior stakeholders, confusing communication with engagement, asking for feedback too late, ignoring negative feedback, failing to explain decisions, and assuming that silent stakeholders are supportive. Silence often means stakeholders are too busy, unclear about the impact, or do not believe their views will make a difference.
Good stakeholder management is not about pleasing everyone. It is about understanding different interests, making informed decisions and building enough trust for the organisation or project to succeed over the long term.
Listen to stakeholders - video transcript
Transcript lightly edited for readability.
Title screen: Cummins, Inc. Embracing the Stakeholder Model.
"Cummins many years ago adopted the Stakeholder Model. Luckily, as we are headquartered in the state of Indiana, Indiana passed one of the more progressive corporate laws that allows people to not just think about shareholders, but to think about the full range of stakeholders.
When you only think about shareholders and that's it, you tend to think very short-term. But when you think, I want to be here ninety or a hundred years from now, you have to think about who you are going to be recruiting, you have to think about who you are going to be selling to, you have to think about what communities you are going to be involved in, not just a year from now, but twenty years from now.
And so if you don't build an inclusive environment, if we hadn't started building an inclusive environment thirty years ago for African Americans to work in our company, how could we expect to sell to African Americans?
If we hadn't started building our Chinese employees into our system and employing them in our plants and training them in leadership, how could we expect to be well over a billion dollar company in China right now?
So we're a big believer in, it's a big world, and we have to think thirty or forty years out, not one quarter out, and embracing that full stakeholder model helps us do that.
You also listen better. When you're thinking about your impact on your customers, on your suppliers, on your community, on your employees and trying to listen, you will hear things you need to hear.
And if you only listen to, did you have a good quarter, you're not going to get the best people, you're not going to get the best suppliers who are with you in good times and bad, you're not going to have customers in the long run.
So it's good for us and it's good for them."
Video references and further reading
- Spiritual Capital Media - YouTube channel.
- Stakeholder theory - in this video Edward Freeman explains stakeholder theory and why it is important for doing business.
- Stakeholder analysis templates in Word, Visio and Excel.
- Stakeholder Definition
- Generic stakeholder list.
- Happy Stakeholders - Pleasure and Displeasure List. An innovative approach to managing stakeholders from Herding Chickens: Innovative Techniques for Project Management, by Dan Bradbary and David Garrett.
- Internal stakeholders - how to identify them.
- Stakeholders who are Key Players - some stakeholders are really important. How do you find them and get them on your side before they can do any damage?
- Stakeholder mindmap
- Project stakeholders - typical stakeholders on a project