The New Strategist summary

If you asked an executive at Nippon Telegraph and Telephone –  the world’s top company in 1990 – what its purpose was, the answer you’d be most likely to hear is profit. What else could it possibly be? 

Nowadays, companies like Apple and Google are at the top. And the combined value of the top 3 in 2018 was actually eight times higher than in 1990. But for the new big names, success is about much more than the financial gains.  

The key message here is: Strategists in today’s world have to consider values and meaning, not just profit.

Maximizing profit alone just doesn’t cut it anymore. People increasingly expect social responsibility from companies. And strategy has to reflect that.

So before even getting to the specifics of the business, the first thing to consider is the underlying philosophy – which has to be a humanitarian one in today’s world. That means it has to start from the idea that the purpose of companies is to serve people.

That’s because no one really believes anymore that material wealth alone is what motivates us. As humans, we all have a desire for dignity and equality, and we expect our work environment to reflect that. We want companies to provide us not just with nice things, but with meaning and a vision of the future.

Consider companies like Google or Lego. It’s not just their colorful interior design or attractive architecture that account for their success. The difference is in the spirit. People who work there feel fulfilled by their jobs; it makes them feel like a part of something bigger – and even that they’re making the world a better place.

That desire for meaning can’t be ignored.

And for strategists, it means optimizing the benefit created by the company in line with these values. How can this happen? 

Well, a useful first step is to get clear about the purpose of the company in concrete terms. To help with this, the strategist can ask: to whom is the company responsible and what benefit do we want to create for them?

And a good way to structure the answer is to apply the time-honored stakeholder management approach. The idea behind it is that companies should be led in line with the interests of their stakeholders.

Who are your stakeholders?

They are the people or groups who get something out of the company and who influence it in return. The list goes on from the obvious like owners and customers to employees and suppliers and even to society as a whole. The question for the strategist is how these groups can be prioritized.