In the last few weeks, I’ve written about new directions modern organizations should consider. For instance, I’ve explained the importance of shoring up cybersecurity and the value of UX writing. Often, companies focus on these issues because of their stakeholders. Stakeholders inform the strategy, values, and direction of any organization. Engaging stakeholders is always important. However, in times of crisis, it’s essential.
So who are stakeholders anyway? According to this Forbes article, that would be anyone with an interest in your organization’s work. That might feel very broad. In fact, it is! You probably have more stakeholders than you’ve ever thought of.
For a simple example, let’s consider a small grocery store. Some obvious stakeholders might be the owners, employees, and customers of the store. You might even remember to include produce suppliers in your list. However, that’s not all. Other business owners nearby are also stakeholders. So are neighbors in the community. Local legislative bodies are stakeholders too, since they develop legal codes that impact this little store. As you can see, identifying stakeholders isn’t all that simple.
This article and this one list examples of stakeholders to consider. That includes owners, employees, clients, end users, distributors, suppliers, and regulatory agencies. Whew, that’s a lot! With so many entities to consider, it might feel overwhelming to keep track of everyone. Nevertheless, engaging with stakeholders is a valuable strategy for any company.
The Importance of Stakeholders
As this article on managing stakeholders explains, business success depends on the relationships you maintain. That’s not actually a new idea. You’re probably already familiar with this concept on an individual level. That’s why I’ve written about best practices for networking. Well, a business needs to keep up a network too!
This Forbes article notes that modern companies don’t just care about their profits. They also need to be concerned with satisfying their stakeholders. And in fact, stakeholder satisfaction predicts profit. For instance, if your employees are happy and speak positively of your company, attracting top talent will be easier. If your company is perceived by customers as trustworthy, you’ll keep their loyalty and business. To avoid stakeholders jumping ship, your organization will need to convince them of the value in new directions, investments, and risks, as this article explains.
B Lab has taken a creative approach to measuring companies’ responsiveness to stakeholders. It certifies “B corporations,” which are “leaders in the global movement for an inclusive, equitable, and regenerative economy.” B Lab’s assessment takes social and environmental impact into account because that’s what modern stakeholders value in addition to the bottom line. Thus, B Lab has to develop thoughtful approaches to certifying companies with controversial impacts, like bottled water companies.
The Stakeholder Map
Evidently, knowing your stakeholders is crucial to building success. That can be a large and daunting task, though. Use a stakeholder map to thoughtfully approach this challenge. This article describes the best ways to do that.
First, you’ll want to identify your stakeholders. Don’t just think about who’s already involved. Consider who should be involved, even if you’ve been avoiding them on purpose. Then, create a visual representation of all your company’s stakeholders. You can use whatever layout makes sense to you. Specify entities whenever possible instead of using broad categories like “customers.”
Once you’ve made your map, gain insights by assessing the strength of various relationships. Which relationships are you already actively cultivating? Which ones provide value? Relationships might be strong, weak, or neutral. Conducting this assessment should give you insight into new directions for growth. Whom have you overlooked? Where do you have an opportunity to strengthen ties?
Once you know where you can do better, set goals to improve. As I recommend in this earlier post, you’ll want to develop specific, relevant, and attainable goals. And then charge ahead! The stakeholder map should be a living document, so you can update it as you make progress. As this COVID-era article, you’ll also need to update the map whenever major changes occur. You can even stay ahead of the curve by monitoring new trends and anticipating how relationships might change.
Let Stakeholders Inform Your Future
This HBR article describes a crucial way that you can engage your stakeholders to impact your future. Historically, leaders have defined a company’s strategy by aligning their organization’s capacity with environmental context. However, that doesn’t work when the context is rapidly shifting. Of course, the recent pandemic has driven this point home.
In the modern world, executives need to take feedback from stakeholders to shape their strategy. It doesn’t work for them to make decisions in a vacuum anymore. Although that may feel difficult, it’s in alignment with my earlier recommendations for humble organizations. Executives should conduct interviews themselves instead of simply sending out surveys via mass email. This strategy, although time-consuming, will drastically increase their awareness of stakeholders’ values and perspectives. The data gathered from these interviews will make data-driven decision making possible.
Executives can ask stakeholders to engage in a SWOT analysis. This process identifies the strengths, weaknesses, opportunities, and threats unique to your organization. Though it may not feel great to hear about weaknesses, adopting a growth mindset can help executives use this feedback productively.
Navigating Change Through Communication
When you do decide to make new changes, how you communicate this to your stakeholders matters. That’s the topic this article is all about. In the past, I’ve written about best practices for virtual communication in general. Now let’s see how this applies to this specific situation.
The article suggests that communication strategies will differ, depending on their target. To address employees, for instance, a weekly newsletter could be appropriate. In this way, leadership can provide regular updates to keep staff informed of organizational changes. Leaders can also host virtual town halls to engage in dialogue with their employees. A lack of information creates fertile ground for speculation, rumors, and fears among the workforce. Sharing information as transparently as possible bolsters trust instead.
On the other hand, it’s also important to consider the public, which includes current and perspective customers. Think ad campaigns, press releases to the media, and thought leadership. Thought leadership can range from presenting at conferences to maintaining a current and informative company blog.
However your organization engages its stakeholders, know that this process is key to success. And whenever you need a seamless way to coordinate communication, collaboration, and productivity in this effort, trust Pyrus to help you move your work forward.