It’s occurring to me that a number of our more interesting conversations – both past and present – might be best advanced by an attempt to draw “maps” of shareholders and stakeholders over the full life cycle of any firm. I don’t think anyone would care to dispute the notion the stakeholders and shareholders change over the life of a firm, but I’m not sure we’ve seen much work on how those changes come about – who maintains an interest and who divests (and when), distinguishing between “active” and “defensive” interests, understanding how existing stakeholders seek to recruit new members or remove others, and tracing when stakeholders hold “exclusive” interests in a firm and when they allow their interests to be more diversified.

To overstate the case a little, it should be possible to look at the growth trajectory of any firm and be able to identify the specific stakeholders and shareholders as well as the exact nature of their interest in the firm at any point on the curve. We should also be able to roughly predict how stakeholder and shareholder membership and behavior will respond to changes in growth and performance. Or, more modestly, we should at least be able to better understand the issues that stakeholders and shareholders are likely to confront during various points of the life cycle of a successful firm.

As a crude initial example, let’s go back to the wildly successful startup firms that our friends in entrepreneurial studies are so fond of trying to find. The initial impetus for this line of thinking goes back to the question you asked years ago about how long does a firm remain “entrepreneurial”? More specifically, you raised the point that there were a class of venture capitalists who were only interested in a successful firm during its initial period of rapid exponential growth, and would look to divest the moment the growth rate showed the first signs of slowing. So those people may now opt out, but that does not mean that the firm is unprofitable – there are likely to be other types of investors looking to get in, albeit with slightly different goals. As this firm settles into a more steady growth rate, it becomes more important to labor, the public sector, new firms that might grow out of its multiplier effect, etc. Perhaps the society starts to believe that the firm’s product or service needs to be integrated into public education. New stakeholders come in, whereas old ones begin to turn their interests elsewhere…

After a while, growth starts to plateau or decline. Perhaps the product or service has become commodified. Some investors begin to drift. The firm places inordinate interest in reducing labor costs or seeking structural advantages from the public sector. Previous labor stakeholders become more defensive and many drop out, replaced with new labor stakeholders in lower-wage areas or countries. While some older investors seek to protect their previous investments or drop out, new investors who see value in breaking off parts of the firm to incorporate into other concerns become attracted. The public sector seeks new ways to replace the jobs that have been lost.

An interesting variable in all of this is the original “owner” of the firm. Let’s assume for the moment that she started in her garage and tied most of her own personal assets into the start of the firm. Perhaps she was like the venture capitalist who got out early by selling the potential of the firm to another buyer at an enormous premium. If she stayed, there is likely to have come a point where a large percentage of her personal assets would be more rationally invested in some firm other than her own. Perhaps this led to significant interests in other ventures, board memberships in both the private and public sector and other developments that blur the boundaries of the original firm and countless others. By the time her original firm ceased operation, hardly anyone noticed – both the functions and assets had been seamlessly integrated into other concerns.

This is all skeletal and crude, but hopefully enough to provide a grasp of the idea. I think it might provide a more accessible framework to the “elements of entrepreneurial success” ideas we conceived years ago, and also begin to give some real teeth to the “blurring organizational boundaries” argument that everyone understands intuitively but have yet to formally identify or define. The strategy here is not unlike the one we used for our product-market taxonomy years ago – start back at where an organizational boundary may have been clean and identify the processes that begin to make it blurry.