Stakeholder Theory, the concept originally developed and championed by R. Edward Freeman in his 1984 book, “Strategic Management: A Stakeholder Approach,” holds that the idea that business is about maximizing profits for shareholders is outdated.
In fact, Freeman says, “The task of executives is to create as much value as possible for stakeholders without resorting to tradeoffs. Great companies endure because they manage to get stakeholder interests aligned in the same direction.” What if the theory were applied to for-profit third-party trade shows?
Identify the Stakeholders
In order to use Freeman’s theory to discuss trade shows, one has to identify the stakeholders of an exhibition. Although Freeman admits that the definitions (in a corporation) can vary, stakeholders in this discussion will include:
Determine Your Purpose
In order for exhibition organizers to get stakeholder interests aligned in the same direction, they have to first determine the direction. In other words, Freeman says, they have to ask themselves about their purpose and for whom they want to create value.
While there could be many answers to a question about purpose, one possibility for the sake of this discussion is “to create a unique marketplace for buyers and sellers.” With that purpose in mind, organizers can begin thinking about specific strategies to maximize the value for each stakeholder group.
Deploy Specific Strategies
A comprehensive strategy to provide value to each stakeholder group would likely fill a book. Here’s a sample of the types of strategies an organizer could use for each group.
Shareholders— Offer a diverse array of products and opportunities to a specific group of individuals in a manner that maximizes profits while adding value for customers.
Exhibitor/Sponsor—Expose exhibitors and sponsors to the largest number of potential buyers for their specific products so that they will return to exhibit year after year.
Attendee—Expose attendees to the largest number of products that meet their specific purchase/interest criteria so they will return year after year.
Supplier—Give your suppliers opportunities to earn a competitive margin on services so that they are incentivized to optimize the experience for exhibitors, sponsors, and attendees so that the latter will return year after year.
Venue—Negotiate fairly and ethically with venues with the goal of providing optimal service to exhibitors, sponsors, attendees, speakers, suppliers, and show staff, prompting the latter to return and/or perform year after year.
Employees—Provide staff with rich and valuable industry and market information to enhance their professional objectives and enable them to provide superior customer service to all stakeholders so that the latter will return and/or perform year after year.
These strategies are simple but also very general. True dedication to Freeman’s Stakeholder Theory would include in-depth analysis of value creation and alignment for all groups and a consistent reworking and shifting of resources to stay true to those strategies.
In the end, it’s important to remember, Freeman explains, that stakeholders are not products, accounts, assets, or liabilities. They are living, breathing human beings. And in the face-to-face business, relationships, all relationships, matter.