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Stakeholders, who cares?
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Transcript of Stakeholders, who cares?
1
Strategies
for maintaining
stakeholders
relations
2
Who are Stakeholders?
1. Anyone or any entity with an interest in
the organization.
2. The organization’s success or failure
will influence or impact the stakeholder.
3. The ability of the organization will have
an influence on the stakeholder.
?
3
Stakeholders relationship
Customers Shareholders
Employees Suppliers
Community near
organization
Local, national
and foreign governments
Other
creditors
Senior
lenders Family
members
The organization
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Degree of relationship importance
We will review how to
address each relationship.
1. Importance varies with situation
2. Type of relations and frequency varies
3. In uncertain or volatile environments, it
might be best to assume all stakeholder
relationships are importance.
4. No relationship is exactly equal.
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Rule #1 – There is always a message.
The message will
either be yours or
someone else’s.
1. The message defines and influences the stakeholder
relationship.
2. Who are the people involved?
3. What are their roles?
4. What is the commitment between each other?
5. What is their history together?
6. How will they go forward together from now on?
7. In a crisis situation, how will they respond?
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Rule #2 – You should have a clear message.
The message must be what
you believe in yourself.
1. The message should be true to your situation.
2. You should be able to defend the message.
3. It should be positive but not overly optimistic.
4. It should reflect your strategy and value propositions.
5. It should anticipate questions and skepticism.
6. The focus and details of the message should depend
on the interest of each stakeholder.
7. It should recognize that there are unknown factors.
8. It should acknowledge realistic stakeholder
concerns, fears and risks.
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Rule #3 – Credibility
Credibility is everything. So, do everything you can to ….
Avoid any big surprises!
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Sufficient
ongoing
cash flows
Profitability
and company
values
Supply risk
and ability to
competitive
Job security
and growth
potential
Volume,
continuing
business;
ability to pay
Tax base,
jobs,
donations
Security, wealth
creation, health,
working
environment
Creditors
Shareholders
Customers
Employees
Suppliers
Community
Governments
Family
Different focus & concerns of each stakeholder
Secondary
Primary All concerns are interrelated, but
the primary focus can be different.
Source: KDC & Associates, Ltd.
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Possible stakeholder relationship strategies
Offer little information, uncooperative
- You have lost control of the message and
relationship.
- Perception that you have something to
hide…..usually negative.
- The rumors start and accelerate.
Proactive
- Provide minimal information beforehand
- Provide appropriate information beforehand
- Provide as much information as possible
(over supply)
Reactive
- You have lost control of the message and
relationship.
- Perception that you have no sound strategy
or execution plan.
Defensive
Prepared
Surprised
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Common themes of successful strategies
1. There is proactive communications (before or as
soon as possible after a crisis).
2. The primary interests are addressed depending upon
the stakeholder.
3. The communications have credibility, but there are
no hard promises if possible.
4. The message is clear and stable.
5. Expectations are not over exaggerated or under-
exaggerated.
6. When there is a situation change, adjustments in the
message is made and presented quickly and clearly.
I just want to let you know our
status and that all is well.
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Issues to address - General
Current & future strategies in the current environment:
- Give reason why it should be successful.
- Present success factors
- Show the market’s and your needs to be satisfied.
Market and competitive environment:
Business levels and trends
- Competitive threats and opportunities
- Status, outlook of top 3-5 customers (70-80%) of the sales
volume and how they are monitored
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Issues to address - Financial
Cash flows:
- Overview
- Past 13 weeks
- Projections of next 13 weeks, 6 months, 12 months
- How your forecasts are determined
- List the primary drivers of your business
Balance sheet review:
- Current ratios
- Non-cash current assets
Profitability and company evaluation
Comparatives: YTD vs prior YTD
Overall outlook
13
Issues to address – People
- Skill audit vs. future needs
- Plans to address any gaps
- Plans for increasing or reducing headcount by skill
area
- Methodology
- Timing
14
Creditors
- Primary interest: security of the credit
- Secondary interest: growing the credit and services
- Important to be especially proactive
- Strategy built around cash flow and safety factors
- Address all contingencies before they do.
- Credibility is very important.
- Do not hide bad news…..address it.
- The more senior the creditor, the more frequently they
should be updated.
15
Shareholders
- Primary interest: Company value
- Secondary interests: anything that supports or diminished
the company value.
- Must be primarily proactive: first to know anything that
impacts company short-term and long-term value.
- Majority holders: detail status of all of the valuation drivers.
Frequency determined by policy, how fast things normally
change and are influenced by events.
- Minor holders: summary data, less frequently, unless a
board member.
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Customers
- Detail: Ongoing competitiveness. How?
- Only if asked or demanded:
- Balance sheet summary
- Access to cash & liquidity
- Senior lender relationship
- Equity back-up commitments
17
Suppliers
Major suppliers only:
- Supplier day gathering
- Individual meetings
Topics:
- The general environment and company needs
- Plans going forward and how they fit in to these opportunities.
- Balance sheet summary (if necessary)
- Access to cash & liquidity (if necessary)
- Senior lender relationship
- Equity back-up commitments
18
Employees
- Critical issues: Job security and growth potential
- Message: Tailored to different employee classifications
- State of the company and its environment
- Plans for dealing with the current and expected future
environment. Why we will succeed and how.
- Skills needed to successfully execute the plans
- Specific things the employees can do to help.
- Near term outlook on headcount and hours working
19
Governments, community, family
- Same message tailored to their specific concerns.
- Government & community presentations about twice a year.
- Give broad overview of operation in region
- Explain long-term commitment, job creation, support of
community concerns
- Publically announce that support for society and the
community will not be at the expense of the core business
and product quality. Studies have shown that community
service from a company with a very poor customer
satisfaction level can be very damaging.
- Family (ex-active employees or significant shareholders)
- Tailor information and frequency to the situation
- Give broad overview of operations and commitment
20
Review
- Prepare formal policies for major stakeholder classifications
- Be proactive as much as possible on current issues.
- Control the message in advance before a message you do not
want develops.
- Prepare as credible case as possible.
- Prepare an appropriate amount and type of information (not
too much, not too little)
- Tail the focus of the message (not the message itself
- Make adjustments as need be.
21
Strategies
for maintaining
stakeholders
Relations
Thank you