Everything is connected. Businesses are not just about profit margins and product quality. Our customers increasingly hold us to account for our impact on a vast swath of social issues and the environment.
This shift in consumer expectations has put pressure on organizations to balance the needs of various stakeholders in their supply chain, from customers and partners to suppliers and beyond.
You may feel that supply chain matters are purely operational. But we share the view of author Milan Kundera who said that business is only concerned with two things: marketing and innovation.
This is a subject that neatly straddles both.
Who Are the Links in the Supply Chain?
- Customers
They’re sharply conscious of the social and environmental impact of their purchases. They expect companies to provide products and services that align with their values, such as sustainability, ethical sourcing, and diversity and inclusion.
- Partners
Collaborative partners, such as distributors, retailers, and service providers, play a crucial role in a company’s supply chain. They seek reliable, responsible and mutually beneficial relationships.
- Suppliers
They’re obviously vital to any supply chain, and their practices directly affect the reputation of anyone who supports them. Businesses must ensure their suppliers adhere to ethical and sustainable standards.
- Employees
These are the important internal stakeholders who drive any organization’s culture and values. They expect a safe and inclusive work environment and for their employers to support meaningful corporate social responsibility (CSR) and diversity, equity and inclusion (DEI) initiatives.
According to a recent study by Moody’s Analytics, 58 percent of employees are considering leaving their jobs in the next 12 months because their employer doesn’t share the same values as them.
Increasingly, your organisation’s attitude matters. From your stance on cultural drivers like sustainability and ethical practice, or on a deeper level, your approach to work-life balance, wellbeing, and social engagement.
Your employees are keen to be on the same page. So much so that, according to a similar study, more than half the people surveyed said they’re willing to take a pay cut to work at a company that shares their values. (Full disclosure: evidence is not easy to find.)
- Investors and Shareholders
Investors increasingly consider environmental, social, and governance (ESG) factors when making investment decisions. They may demand that companies comply with sustainable and responsible practices.
Strategies for Meeting Stakeholder Needs
- Transparency and Communication
Open and honest communication is key. You should communicate your values and efforts towards social and environmental responsibility clearly and consistently to all stakeholders. Regularly updated CSR announcements can be a valuable tool for this purpose.
- Stakeholder Engagement
Actively engage with stakeholders to understand their expectations and concerns. This can involve surveys, focus groups, or even advisory panels that include representatives from various interest groups.
- Setting Clear Values and Priorities
Define your company’s core values and prioritize them. This will help guide decision-making and demonstrate a commitment to values that chime with your customers’ expectations.
- Supplier Reviews and Accountability
Regularly audit your suppliers’ practices to ensure they meet ethical and sustainable standards. Implement mechanisms for holding suppliers accountable for any deviations from agreed-upon performance levels.
- Employee Involvement
Engage your employees in CSR initiatives and decision-making processes. Their insights and commitment can help shape a culture of responsibility within the company.
Scale is everything, of course. Nobody expects you to compete with the big corporations in any of this. Support local issues that your employees recommend once you’ve checked on their authenticity.
- Value Chain Collaboration
Collaborate with partners throughout the value chain on your shared values and goals. A collective effort can result in more significant positive impacts.
- Continuous Improvement
Sustainability and ethical practices are journeys, not destinations. Continuously assess your operations and seek opportunities for enhancement.
Managing consumer pressure
- Educate and Advocate
Share information about the challenges and complexities of the supply chain with consumers. Educate them on the steps your company and its partners are taking to address their concerns.
- Offer Choices
Where feasible, provide consumers with a range of products and services to suit different value sets. For example, if you sell cosmetics, have a range of organic products to appeal to younger customers. This allows them to make choices that reflect their values while supporting your brand.
- Transparency
Be clear and upfront about your supply chain practices, including the various challenges and limitations. In some circumstances, you may be unable to influence certain factors, but being open about it will help you to build trust and integrity.
- Adapt and Evolve
Commit to ongoing improvement in line with consumer expectations. Show that you’re actively working towards better practices and that supporting the values of your customers is your main focus.
A quick summing up
Balancing the needs of customers, partners, suppliers, and other stakeholders while meeting the insistence of consumers that all members of the supply chain conform to their values is a complex and ongoing process
It requires a commitment to transparency, open communication, stakeholder engagement, and continuous improvement. While challenges may arise, the pursuit of ethical and sustainable practices benefits not only the stakeholders involved but also the long-term success and reputation of the business.
In this evolving landscape, adaptability and a genuine commitment to values will be the cornerstones of a resilient and responsible supply chain.
