What to consider in you firm’s strategic planning

Research over the past few years by Edward Freeman, Sergiy Dmytriyev, and Robert Phillips has shown that competitive advantage lasts only when a company treats its relationships with its customers, employees, suppliers, communities, investors, and regulators as central to the way it manages all of its resources.

In simple terms, the quality of your stakeholder relationships is not only a core asset but also the glue that makes the rest of your assets work together.

The study provides four clear ideas on the way forward. First, every serious strategy lives inside a complex web of shared values and social norms.

Read: How Kenyan businesses can thrive by embracing African values

In as much, contracts are always incomplete. There will be those moments when the written organisational rules are silent, and people must do the right thing anyway. If you ignore values and unique culture, then you leave a giant blind spot in how profits are actually created and shared.

Second, firm sustainability is not only about competitive rivals failing to copy your resources. But it is also about building relationships that endure over the longterm with stakeholders who choose to keep working with you and for you.

Those relationships are hard to imitate and take long to build. When they are strong, they provide you the cover of resiliency. In other words, they help you recover faster from negative shocks, and they keep knowledge and trust inside the firm.

Third, people are not merely headcount or abstract human capital. People are a focal point in and of themselves. They bring the skills, solve the problems, and decide whether to provide the firm their best effort or only their mediocre effort.

When a CEO treats people only as inputs, then they may squeeze short-term numbers but while quietly draining the very resource that produces tomorrow’s organisational wins.

Managing for stakeholders puts people at the focal centre and entity performance usually improves rather than declines.
Fourth, competition and rivalry are only half the story. Cooperation represents the other half.

Firms that over index KPIs on outscoring rivals often neglect the partnerships and shared wins that make complex intertwined work possible.

A smart leader learns when to push and when to partner so that suppliers, channel partners, and even community stakeholders move in step with the plan. That balance produces what the research call sustainable long-lasting cooperative advantage.

Here is a straightforward playbook for our Kenyan business leaders that puts the above ideas to work. Write your strategy with people in mind, not only products and plants.

When thinking of every strategic plan objective, go ahead and list the stakeholders who must say yes and what they must gain to be fully in.

If any group only bears costs as a result of the plan, then redesign the deal until there is a fair reason for them to support the strategic plan. That is how business leaders reduce the silent risks that show up when explicit and implicit agreements are incomplete.

Next, turn relationships into a specifically managed asset. Track the health of internal and external trust with the same care you track cash, inventory, and customer reputation.

Ask clients about fairness, speed, and honesty. Ask suppliers about reliability and timely payment. Ask staff about dignity, clarity, and whether their voices are listened to. When a score dips, fix the cause, not just the optics.

Some may erroneously view such attention as soft extras. But rather they are leading indicators of whether your resources will actually produce results next quarter.

Then revisit your firm’s view of people. In teams that carry forward your organisational mission, swap compliance and obedience talk for emotional commitment talk.

Explain the purpose of the work and why it matters. Clarify the real tradeoffs. Share the upside when the firm grows everyone wins. People who feel seen as partners usually act like owners.

That is good ethics and good economics both at the same time.
Additionally, balance compete and cooperate. Map where you must win alone and where you must win together with your firm’s stakeholders.

If quality in your product or service depends on a specialist supplier, invite them into early design reviews, share demand signals, and build a joint plan that rewards both sides for reliability and innovation.

If community goodwill is crucial for permits or distribution in your EPZ zone for example, then invest in local benefits that outlast a simple publicity ribbon cutting.

Read: Steps to unlocking real value in your business

These cooperative moves strengthen your advantage because they make your system harder to copy by future and current competitors.

Finally, keep two guiding lines in view at all times. Build and maintain sustainable stakeholder relationships because that is both the right thing to do and the smartest path to long-term performance.

Use the resource-based perspective to decide where and how to invest in those relationships so they create value for everyone involved, not just your organisation.

Companies that follow both lines think more clearly, move more smoothly, and face fewer ugly surprises that creep up. That is strategy that fits the real world rather than just a classroom.

Have a management or leadership issue, question, or challenge? Reach out to Dr. Scott through @ScottProfessor on Twitter or on email [email protected].