CEOs: don’t let your stakeholders cry foul

CEOs: don’t let your stakeholders cry foul

It’s hard to see football’s proposed European Super League as anything but a public relations disaster for the 12 football clubs involved as fans, players, politicians and even Prince William, in his role as President of the FA, lined up to condemn the move.

While I’m not here to judge on the merits of the proposal – I’ll leave that to others better versed in the game – it serves as a timely reminder of what can happen when leaders fail to take all their stakeholders along with them.

I have first-hand experience of making that mistake.

As a relatively new leader of a big organisation 20 years ago – it was my first plc board appointment – I tried to push through a modernisation of the supply chain for newspapers and magazines. Though we had the backing of those who we considered to the principal power players – the retailers and our major shareholders – we had naively assumed that support would be enough to drive through the change and the remaining stakeholders would go along with it. I was wrong and it ultimately led to me having to leave a job I loved.

If you don’t consult with all your stakeholders…
It was a harsh lesson for me that, as a leader, if you don’t consult widely and keep all your stakeholders on-board, then you can find yourself on a sticky wicket (if I’m not to mix my sporting metaphors). This has become even more important over the last decade. Last year, at Alexander, we conducted a survey amongst business leaders on the changing role of the CEO – A view from the boardroom. One of the core competencies identified for long term success was the ability of a CEO to build relationships with their multiple stakeholders.

Critically that means moving beyond keeping just the shareholders happy. The era of CEOs being secure in their roles as long as they hit their financial targets is long gone. And it is not just customers and colleagues who need to be on-board, CEOs have to pay attention to the welfare of the complete supply chain, local communities, regulators and wider society. You also have to be on top of the environmental, social and governance (ESG) agenda. As one former CEO told us: “The role of a CEO in the current decade is going to be even more about the wider diversity of stakeholders.”

Back to the European Super League then. As I write, the project is now, according to the Chairman, “on standby”. Some have said the initiative was a negotiating tactic on behalf of the most powerful clubs to squeeze more out of UEFA, but if it’s a genuine attempt to break away, they have patently failed to consult with their wider stakeholders to bring them along on the journey. They are now on the backfoot with fans calling for the heads of chairmen and pushing for a change of ownership at some clubs. The lack of consultation in the first place will come back to haunt them and the long-term collateral damage will take a long time to repair.

Share your vision
The lesson for CEOs working on a major strategic change (which is most CEOs currently) is that they must spend as much time sharing their vision outside of the business as within it. Consult and communicate widely with all stakeholders from the board through to colleagues, but also to customers (fans) and the many and varied constituencies outside that an organisation absolutely relies on for its long-term success. If you don’t, and as I found out myself, the first casualty is likely to be you.