Stakeholder Centricity- The Heart of your Business: Wendy van Tol & Olivier Sueur
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Transcript of Stakeholder Centricity- The Heart of your Business: Wendy van Tol & Olivier Sueur
Stakeholder centricity:the heart of your business
Explained by financial sector case studies
Barrett Values Centre
2014 International ConferenceBuilding a Values-Driven SocietyStockholm, 12 June
www.pwc.nl
PwC
Ambition
• High performingorganization
• Purpose driven, valuesled
• Behaviour as thedifferentiator in the‘moments that matter’
We see two drivers for stakeholder centricity
External burningplatform
• Trust is all time low
• Shifting public moral
• Complying to the rulesis no longer enough
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Edelman Trust Barometer 2014
PwC
Financial services continues to be the least trusted industry globally
• Financial institutions have been working hard on restoring trust, the impactof these efforts is not significant
• Globally trust in financial services industry is only one percentage pointhigher in 2014 vs 2013 (Edelman Trust Barometer, 2014)
• Trust in EU Financial Services is lowest
This calls for change in how financial institutions are restoring trustand building confidence.
Trust is a must in the financial services industry
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PwC
What builds trust?
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Research shows four key elements
• Be clear on what you stand for and why you are relevant
• Show you understand the needs, interests and expectations of others
• Integrating stakeholder needs and their (long-term) goals into services,products, processes and behaviours
• Reporting open and transparent about financial and non-financial valuecreation towards a broad stakeholder group
PwC
PwC’s stakeholder centricity approach
5
Relay to stakeholders what path youwalk through integrated reporting
Assess, evaluate and adjust tobring the walk closer to thetalk
Support the walk with theright processes
Walk the talk
Be clear on purpose & valuesand how you are relevant toyour stakeholders
ACCOUNTABILITY
CONTROL
EXECUTION
LEADERSHIP
STAKE-HOLDERS
PURPOSE& VALUES
June 2014Stakeholder centricity: the heart of your business
PwC
Financial institutions steering on stakeholder centricity:
1. Define and have clarity on their purpose & key values
2. Define their direct & indirect stakeholders
3. Organize permanent dialogue with these stakeholders to know andunderstand their needs
4. Take careful consideration of the possible conflicting needs:
◦ Step 1: Formulate all financial andnon-financial needs and their impactshort/long term effect
◦ Step 2: Needs are weighted forkey stakeholders relevance andaccording to the purpose & keyvalues using a materiality analysis
Transformation towards an open system
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PwC
Moments that Matter are the moments that createvalue for stakeholders
Culture is build in Moments that Matter (MtM).
MtM:
• has unparalleled impact on the performance andthe value creation process
• exists in interaction with stakeholders
The right behaviour in MtMs:
• provides more control in restoring trust andbuilding confidence of stakeholders
• triggers a positive effect on a change in culture &behaviour
• can be embedded in the organization by steering onKBI’s (Key Behavioural Indicators)
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PwC
Quantifying and qualifying stakeholder interestsis key towards sustainable value creation
Fact based, definedby logic using data
analytics
What we know isthe right thing to do
Moments thatMatter
Defined by emotionand feelings
What we feel is theright thing to do
“The difference between emotion and reason is that emotionleads to action, whilst reason leads to conclusions”.
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June 2014
PwC
Example of an insurer: moments that matter
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PwC
Transformation towards a stakeholder orientedculture requires integration of three leadership styles
10June 2014Stakeholder centricity: the heart of your business
SOUL – inspirestakeholders based ona belief in the purpose,values and strategy ofthe organization.
SYSTEM – show theneeded changestowards a stakeholderoriented culture bysystems, processesand structures.
STAMINA –embeddingstakeholder centricityin the culture bysteering on it in dailydecision making andbusiness operations.
PwC
Stakeholder Centricity: Putting it into practice
BRAIN bank N.V.
• BRAIN bank is a global financial institutionof Dutch origin, heavily impacted by thecrisis.
• The purpose of BRAIN bank is: meaningfulfinancial advice to prepare for the future.
• The key values of BRAIN bank are:responsibility, partnership andprofessionality.
• To become a more robust company BRAINdecided to focus on profitable and strongclients and for the less profitable (non-target) clients, like some middle marketclients, a discouragement policy is defined.
• Employees feel uncomfortable applying thepolicy, because they feel forced to breakcontact with clients they have been servingand have known for many years.
• Employees also complain about the almostimpossible load of new national andinternational banking regulations and theimpact of these regulations on their dailyjob.
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PwC
Stakeholder Centricity: Putting it into practice
Discussion in subgroups
We have 6 subgroups representing thedifferent stakeholder groups of BRAINbank:
1. Clients: specifically entrepreneurswith medium sized companies
2. Employees
3. Management
4. Shareholders
5. Regulators
6. Society
Round 1: What are your 3 key needs?
• Brainstorm all possible needs of yourstakeholder group (5 min).
• Discuss output within subgroup (5 min)
• Please write the 3 key needs on post-itnotes and share them plenary.
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June 2014
PwC
Stakeholder Centricity: Putting it into practice
Discussion in subgroups
We have 6 subgroups representing thedifferent stakeholder groups of BRAINbank:
1. Clients: specifically entrepreneurswith medium sized companies
2. Employees
3. Management
4. Shareholders
5. Regulators
6. Society
Round 2: Prioritize the long list of keyneeds according to the purpose andvalues
• Vote on the items of the long list bydividing 2 green stickers and 3 red stickers.
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PwC
Stakeholder Centricity: Putting it into practice
Discussion in subgroups
We have 6 subgroups representing thedifferent stakeholder groups of BRAINbank:
1. Clients: specifically entrepreneurswith medium sized companies
2. Employees
3. Management
4. Shareholders
5. Regulators
6. Society
Round 3: Define the MtM in respondingto the needs
• Brainstorm on the MtM’s for the needsprioritized in round 2
• Pick one MtM and define what behaviour isneeded
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PwC
PwC’s Sustainable Business Modeling toscientifically underpin stakeholder centricity
Eg. Effect of intervention on sick leave by increasing fruitconsumption
Reachable population
92% of Dutch population doesn‘t consume sufficient fruit
Maximum effect
2.4% of sick leave is caused by insufficient fruit consumption
Chance to succeed
Intervention will reach 80% of population which doesn‘t consumesufficient fruit
Impact
An investment in fruit reduces sick leave by 0.1%
Towards stakeholder centricity in the Financial sector20
May 2014
Contact
Wendy van TolPartner – Change & Leadership
Olivier SueurDirector – Risk & Compliance
See also www.pwc.nl/goodmarketconduct