The 4th Stakeholder Framework

Article 17

A real-world example of using the 4th Stakeholder IR Matrix

2-3 minute read

CAPSULE SUMMARY – Applying the 4th Stakeholder Impact x Responsibility Matrix forces you to examine your business impact holistically and provides clarity on where your finite resources will have the greatest leverage.

17.1 In order to move from abstract framework to something more tangible, I’d like to share a real-world example of the framework in action.

17.2 Between 2014 and 2021, I had the privilege of serving as the CEO at Evite, the world’s largest invitation platform for bringing people together face-to-face. I call it a privilege because Evite to this day stands as a rare example of one of those businesses where the core business purpose aligns with a positive social outcome. By helping to bring people together in person to celebrate life’s most precious moments, Evite creates stronger emotional connections and downstream ripples of happiness. In terms of second-order business effects and harms—it really doesn’t have any.

17.3 Given this lack of significant first or second order harms, I was able to focus the vast majority of the team’s energy on creating positive impact (a luxury for sure). Of course as a large-scale online network reaching 100M+ individuals, the opportunities for potential impact were varied—and we had to prioritize our energy.

17.4 Below you can see what Evite’s Impact X Responsibility matrix looked like during that period from my perspective. I’d like to call-out four things:  

• 17.5 Using this framework allowed us to clearly identify that building scale in our core product, because it was de-facto aligned to a social benefit, was the single greatest lever we could pull. We focused the vast majority of our organizational energy on simply growing the business—a perfect example of having your business and social impact blending into one and the same (Article 4).

• 17.6 However, we didn’t stop there. The team pushed the envelope further and asked “How can we attach even more benefit to our core user-flow?”. We landed on non-profit donations and added a simple one-click method to allow hosts to collect donations from their guests for any non-profit or social cause. The result: $30M raised for non-profits over the course of 5 years. This dollar amount far exceeded any potential profit donation we could make ourselves and is a perfect example of attaching impact to your scale (Article 5).

• 17.7 We also used our billion+ marketing e-mail footprint to highlight important social causes or issues and the non-profits that supported them (during Hurricane Katrina, for instance). Although we were just one of many companies at the time helping to build awareness for those organizations, the effective marketing dollars we provided were significant. 

• 17.8 Finally, because the overall impact couldn’t compare to these other levers, we did not pursue things like carving out revenue or profit to help special causes, planting a tree for every X invitation sent, and many other more tactical ideas. The levers above tapped directly into our scale and carried much more impact weight, and therefore they rose to the top of prioritization.  

17.9 As you can hopefully see, although the flushed out end-state of the matrix looks simple, using this approach forces your organization to examine all first- and second-order impacts, consider benefit creation as well as harm reduction, and identify and prioritize the biggest swings. It’s an approach that every company, regardless of size, needs to embrace. In the next article I will dissect this matrix in more depth and expand on some of its less obvious characteristics.