Organisations lose respect for stakeholders for a range of reasons. They may have too little time, place too little value on their perspective or have too little interest in their wellbeing.
Stakeholders include any party impacted by an organisation and a growing number of organisations are using stakeholder research to find out how their organisation is perceived. Those that respond to these research findings are identifying opportunities to work closely with stakeholders and making informed decisions that help build a better reputation.
While every organisation will have its own unique reputational issues, the perspectives of hundreds of strategically minded stakeholders across dozens of major reputational research studies reveal some common themes.
Across these diverse surveys and sectors, key lessons were learned about what drives an organisation’s reputation, how some organisations develop poor reputations while others build much stronger reputations.
How poor reputations develop
Organisations with poorer reputations generally exhibited at least one of three common characteristics; they’re too busy, too bossy or too self-interested.
These organisations don’t seem to have time for all that stakeholder stuff. They operate in a dynamic sector, face many competing demands and find themselves too busy to engage with stakeholders. They display a strong preference to ‘run their own show’, even in areas which require collaboration to ensure the solution meets the needs of all. When they are dealing with stakeholders, it is often after an ‘event’, patching-up differences with a hurt party and invariably, not for the first time. Their stakeholder relationships are punctuated with damaging events, disappointments and a perpetual loss of trust. These organisations tend to be light-on for talented leaders, are generally less strategic in their leadership style, and spend a lot of time fighting fires. Stakeholders are likely to be viewed as another problem, rather than as a source of problem solving.
These organisations are often large or in positions of significant clout, they are absorbed with their own power, knowledge and goals. Their engagement with stakeholders can be ‘token’, they allow little time for listening and their communications with stakeholders are largely one-way, pre-determined and instructive.
Internally they consider themselves to be professional, hardworking experts, but externally they are seen as disconnected, narrow-minded and lacking humility because they fail to tap into the capabilities of their stakeholders.
Organisations which are defensive or avoid stakeholders, usually underestimate the productive role stakeholders can play. Their stakeholders would tell them: “In state-of-the-art sectors, true leaders take advice, they never have the full story.”
These organisations may well be considered a force in their sector, but are usually disconnected from that sector. This lack of respect is not lost on their stakeholders - who wish this sector ogre would recognise they are in a privileged position, change their style and begin to “lead the orchestra” and “to grow-up to be a formidable member of our community.”
These organisations often make choices which demonstrate that they place their own self-interest ahead of community best-interest. The products and services they develop are often designed to meet their needs more than those of their clients, their performance reporting is often more self-serving than it is informative and their dealings with stakeholders are sometimes opportunistic. In extreme cases they may break laws, but more often they communicate secretly or keep a low profile, securing their gain out of the public view, leaving others worse off. The behaviour of leaders of these organisations is followed by their peers and subordinates, all driven to meet their KPIs and attract rewards, but when these behaviours finally come to light, the community loses significant trust in the organisation and its social licence to operate is often withdrawn.
How better reputations are built
Organisations with healthy reputations are connected to their stakeholders. They spend time getting to know the stakeholder organisation, what they do and what their priorities are, meaning they understand the stakeholder’s perspective.
They have designated leaders to act as key points of contact with those key stakeholders and these points of contact proactively communicate and maintain a dialogue with them. These conversations are not always happy, but they are constructive, respectful and ongoing.
These organisations face many challenges that have the potential to impact the stakeholder, but they don’t wrestle with these on their own. They use the regular constructive conversations to collaborate with the key stakeholder. They believe in the capacity of the partnership to solve the problem.
Best-interest over self-interest
Effective key stakeholder relationships place best-interest of the sector ahead of self-interest. These types of organisations recognise that their clients and stakeholders represent valued partners over the long-term. Clients and stakeholders may describe the relationship as ‘joined at the hip’, because the organisation is proactively engaged and makes time to understand their business drivers, strategic goals and plans. There will be occasions when the give and take of the relationship goes both ways, and these occasions serve to reinforce the respect they have for one another. They both endeavour to generate solutions which serve the shared best-interest rather than one party’s self-interest.
Imperative to act now
If your organisation isn’t solving problems through collaboration with key stakeholders, it could be time to ask yourself why.
Are you too busy, too bossy or too self-interested? Your key stakeholders are an informed, interested and strategic thinking source of possible solutions to challenging problems.
Fail to listen and you may be wrestling with those problems alone.