11 May Why Measure Ecosystem Resilience?
When the resilience of stakeholders is in balance, an organization benefits from pure efficiency.
- When customer commitment is high, belief in leadership is strong.
- When leadership is trusted, “backend” partners (independent contractors, and those who provide and service supplies and facilities which provide the resources which produce organization income) are more willing to risk time and money to exceed expectations.
- When “backend” partner reliability is high, employees waste less time trouble-shooting and handling complaints and more time being proud of what they do, improving morale.
- When employee morale is high, “frontend” partners (those who produce marketing & sales, and satellite facilities which represent the organization to the public) have more confidence in what they are selling.
- When “frontend” partners have integrity, committed customers influence others positively.
The chain is only as strong as its weakest link.
During the good times, we take for granted that all the links in the value chain are sustainable. Now, previously invisible vulnerabilities are becoming clear. Naturally, but especially during this divisive moment, each individual is inherently biased to see the ecosystem from their personal interests. To recover, we need a clearer picture of the impact of growth and decline on stakeholders in the ecosystem.
According to publicly available data, the resilience of stakeholders is not balanced.
McKinsey reports Customer Loyalists are only 13%.
Edelman 2019 Trust Barometer reports that 41% and 45%, respectively, believe business and NGO leaders have a vision for the future that I believe in.
During the pandemic, B2B International says 56% of companies are very or extremely concerned about the reliability of Inflow Partners which provide resources to produce income.
Gallup: Employee Morale 35%
Gallup reports only 12% rate advertising practitioners with very high or high honesty and ethical standards.
Our vision: organizations collaborating with motivated stakeholders to accelerate shared growth and prosperity.
In our experience, successful business leaders intuitively balance the interests of all stakeholders to motivate them to risk their assets for shared benefit.
For example, selling milkshake machines to owner-operators of many different franchise business models, gave Ray Kroc a front row seat to the negative consequences of franchisors which took kickbacks from suppliers instead of passing on the savings of aggregated buying clout to franchisees. He believed the McDonald’s Owner Operators would be more motivated to risk their assets if they paid franchise fees based on revenues instead. As he told the McDonald’s brothers – “When you find a good selfish reason for people to cooperate with you, you are pretty sure of their cooperation.” John F. Love (1986) McDonald’s Behind the Arches, pp. 64.
This insight of motivating stakeholders to invest assets by intuitively balancing their perceived risk isn’t taught in business schools. Balancing assets and liabilities to manage risk is. But balance sheets are limited in scope to what management can measure – their own assets, liabilities, income, costs. Stakeholder risk and assets are hidden to management.
During this pandemic, hidden risks are emerging. We are witnessing the unreliability of suppliers – which are just one of the “backend” partners. Human “backend” partners are independent contractors and their intellectual and physical capital – so called “gig” workers, which many organizations rely on to produce income on a variable basis, are more vulnerable to a crisis like this than employees. The Uber driver car may be out of commission or re-possessed. The AirBnb host’s mortgage hasn’t been paid.
The first step is to make the invisible visible.
The benefits are to identify who is motivated to collaborate and reveal a common interest to start a conversation, opening minds to collaborate.
Discover who is motivated because collaborating with these stakeholders will accelerate recovery & growth.
The stakeholders with high response rates care. Feedback will surprise you. As Debra Hotaling describes the Ford pivot to making protective face shields in the Wall Street Journal “Business leaders should pay attention . . . and notice who runs toward the fire. It might not be who you expect . . . We were like the characters in ‘Close Encoutners of the Third Kind’ (1977) – urgently drawn together and trusting that we understood our team by the sheer force of our question.”
That burning question is what you’ll learn from the COMRADITY Ecosystem Resilience Ratings tool. Just the first step to accelerating business recovery, the next will be to assemble a diverse team of those who care – those who “run toward the fire” to do what Debra’s team did – “we came as beginners, and got smart on the job.”
Believe it or not, people can come together. They changed their behavior to “flatten the curve” of the virus and it worked!
Ask stakeholders to help improve the resilience of the ecosystem they share with your organization.
Click on this button to contact us to make the first step to re-balancing ecosystem resilience. We’ll work with you to customize the survey and think about how to categorize your stakeholders – customers, employees, and partners.