Stakeholder vs. Shareholder Capitalism: The Hidden Limits of Change for Consultants and Coaches

Have you ever poured your heart into a leadership development engagement or culture change initiative, watched it fall flat, and then beat yourself up thinking, “What did I do wrong?”

What if I told you it’s not you. You’re advising inside a system that is fundamentally misaligned with the very things you are hired to influence and support.

That is what we are unpacking in this article and video on Consulting Matters.

Why This Topic Matters to Purpose-Driven Consultants and Coaches

The best part of what I do as a brand positioning and messaging strategist is the vantage point it gives me.

I get to see up close the brilliance of my clients and where they truly fit and stand out in the market. I also get the wide view of the vision most of my clients share: workplaces that balance people alongside profits and systems that support humanity first.

We may come from organization development, Lean, leadership development, change management, or coaching. We may use different language. But the vision is the same.

And so are the struggles.

Leaders resist people-centered leadership even when it makes business sense.
Expertly designed change initiatives quietly die.
And in many cases, consultants and leaders are laid off despite delivering clear ROI.

As I tried to make sense of this and of what is happening in the United States that feels troubling to so many, I stumbled on something that finally brought clarity.

We are operating from a stakeholder capitalism mindset inside a world that has made a profound and committed shift to shareholder capitalism.

Once I saw that, my entire consulting career made sense.

Stakeholder Capitalism vs. Shareholder Capitalism Explained

Before the late 1970s, most organizations operated under stakeholder capitalism.

Business leaders saw themselves as stewards. They had responsibilities not only to investors, but also to employees, customers, suppliers, and communities. Profits mattered, but they were not the sole purpose of the business.

Then the late 1970s happened.

Milton Friedman published an essay arguing that the only responsibility of business was to maximize profits for shareholders. Over time, that idea became embedded in corporate law, executive compensation structures, and financial markets.

By the 1980s, shareholder capitalism had become the dominant model.

Executive pay became tied to stock price. Wall Street demanded quarterly earnings. Maximizing shareholder value moved from being one priority to the priority.

The 2008 recession accelerated this shift even further. Whatever balance remained was largely erased. Cost-cutting became survival. People became the easiest expense to cut.

Even organizations that once tried to balance people and profits found it increasingly difficult to do so.

Today, we live inside that system.

Even when organizations say they care about employees, communities, or the planet, the legal and financial structures still reward shareholder returns above all else.

And this mindset is not limited to publicly traded companies. It has carried into family-owned businesses, nonprofits, and institutions of all kinds. Shareholder capitalism has become not just a legal structure, but a way of thinking about how business works.

Why Your Change Work Keeps Hitting a Wall

When consultants and coaches walk into client organizations, we assume leaders have the freedom to choose the right thing.

But they are operating inside a system that legally and financially pressures them to prioritize shareholder returns.

That is why you can coach a CEO on servant leadership and then watch them lay off hundreds of employees to hit quarterly numbers. It is not because they did not understand the message. It is because the system demanded it.

This explains why short-term efficiency initiatives succeed while long-term people-centered transformation stalls.

Layoffs execute smoothly.
Cost-cutting works quickly.
Process improvements that boost efficiency get approved.

What fails is transformation that supports long-term success, employee wellbeing, and sustainable culture change.

Culture work becomes theater. Leadership development becomes aspirational. The real business happens somewhere else.

The Invisible Game Consultants and Coaches Are Playing

Most consultants and coaches are idealists. We believe in investing in people, balancing stakeholder needs, and creating environments where people can thrive.

Our fields were born from stakeholder values or created as a counterbalance to shareholder capitalism.

Yet we bring that mindset into systems that are incentivized not to address root causes.

When people are treated as costs, engagement drops.
When short-term profits dominate, innovation suffers.
When employees know they are expendable, resistance to change increases.

Change does not fail. It works exactly as designed.

What fails is transformational change that conflicts with the underlying economic model.

It Is Not You and It Is Not the Leaders

When this happens, consultants tend to fall into predictable traps.

First, we blame ourselves. We assume our influence skills were lacking or our communication was unclear.

Second, we blame leaders. While there are leaders who consciously choose harm, most are well-intentioned people caught inside a system that punishes them for doing the right thing.

The real problem is the system.

Shareholder capitalism is legally designed to prioritize profits, reward short-term gains, and maintain power imbalances where capital matters more than labor.

Once you see this, you stop personalizing resistance that was never about you.

What I Wish I Had Known Earlier in My Consulting Career

I wish I had understood this 30 years ago when I started my career as an OD consultant.

I would have managed my expectations differently.

I would have taken the wins instead of always pushing for more.
I would have guarded my heart when long-term recommendations were sacrificed for short-term results.
I would have chosen my battles more strategically.

This is not about giving up. It is about becoming more savvy about the system you are operating in.

If you are fortunate enough to work with a true stakeholder-driven organization, savor it. Those clients are rare.

For everyone else, manage expectations, de-personalize outcomes, and position your advice with a clearer understanding of what leaders are rewarded for.

Why We Need Each Other: The Common Good Consulting and Coaching Consortium

This realization led me to a bigger vision.

If we want to break down silos inside organizations, we must first break down our own silos as practitioners.

I began imagining the Common Good Consulting and Coaching Consortium... a way to bring together purpose-driven consultants and coaches across disciplines to learn from one another and partner more effectively around our shared mission to create workplaces that balance people alongside profits and global systems that support humanity first.

This cross-functional consortium is still taking shape, and I want to co-create it with others who share this vision.

This includes professionals in OD, Lean, leadership development, DEI, coaching, HR, and change management.

At minimum, we learn from one another. We share best practices. We partner across disciplines.

At best, we collaborate for greater influence and advocate together for systemic change.

None of us do much on our own. Together, we can become organized resistance for the common good.

Something To Think About

We are operating with a stakeholder mindset inside a shareholder system. That mismatch is not a bug. It is a feature.

Once you see it, you can stop blaming yourself, right-size expectations, guard your heart, and work the system with greater clarity.

And maybe, just maybe, we can begin shifting things back toward a model where business exists to serve people, communities, and the planet alongside profits.

If this resonates, I invite you to join the interest list for the Common Good Consulting and Coaching Consortium at betsyjordyn.com/common-good.

Next Steps

1. Embrace and celebrate your stakeholder mindset. Honor the values you hold dear and then right-size your expectations given the shareholder mindset world your consulting or coaching is swimming in. Take the wins, guard your heart and care…but not too much.
2. Consider being a founding member of the Common Good Consulting and Coaching Consortium. Go to betsyjordyn.com/common-good to get on the interest list.
3. Start the partnering now. Think about who you know in a different discipline who might be your partner. Reach out. Start a conversation.

Other articles you may enjoy:

• Why Generic Titles Like “Consultant” and “Coach” Create Confusion
• The 3 Types of Expertise Every Consultant and Coach Needs to Name and Claim
• Five Brand Positioning Lessons I Learned by Tearing My Process Apart
• The Brand Messaging Process Consultants Need for Clarity and Confidence

About me: Betsy Jordyn is a brand messaging strategist and business mentor for purpose-driven consultants and coaches. With a background in organizational development—including a consulting career with Disney—she helps experts clarify their unique value, position themselves strategically, and build businesses that deliver impact, income, and personal fulfillment. Connect with Betsy Jordyn to clarify your message, elevate your brand, and attract the clients you're meant to serve. Start here → betsyjordyn.com/services