Identifying the stakeholders in a business is not merely an academic issue, nor as simple as many might think. It is certainly not just the bank and the shareholders who are the stakeholders. There is actually a wide range of important influencers affecting not only the operational performance, but also the way in which the business is perceived. Every business needs to identify these and reappraise them on a regular basis.
Defining a value chain
Each and every transaction involving the business will have significance and this applies regardless of the size and type of business. Also, it is not possible to generalise. Each business will be different and the relativities will change over time. Some will initially seem more important than others due to size and immediate effect. In addition to ranking them, it is vital to identify them and their relationship with each other and the business, with particular emphasis on cause and effect.
Cause and effect examples
Some of the following examples, deliberately chosen to cover a diverse range of business types may appear simplistic or far-fetched, but are they? Again, cause and effect matters, both in the short and long term.
A small manufacturer will probably want to include not just the financial backers but also stakeholders that affect purchasing, technical and delivery issues. Fine, but what about the machinists who are not happy that a large proportion of components are now sourced from overseas, putting their employment at risk? Unless the business has a clear strategy, explains and assures them of their continued importance and considers their working environment and conditions, there is considerable potential for bad publicity on a scale that can quickly spiral out of control. These guys will talk to a wife who works at the bank, to a union rep, a supplier, a competitor, frequently in a campaign of negativity and disruption.
Big businesses like, say, supermarket chains think they have all the answers due to the money they spend on research and by changing the CEO or advertising agency on a regular basis. The buyer is scrutinised for financial performance, but is the significance of small-volume but strategically important lines considered? How many times does a shopper need to find that several of her favourite products have been deleted before she moves to the competitor? Multiply that by a hundred shoppers times a hundred stores and the effect is no longer irrelevant.
Another typical example is the importer/service agent for one or more international brands of equipment like, say, machines, instruments, or components. Most of these businesses want it both ways. They want to supply resellers - mostly small retailers, but they usually also want to sell direct to specialists like associations or government and perhaps the general public. The stakeholder mix is actually quite complex as are the cause and effect scenarios. Breaking the distribution or pricing models of the parent manufacturer is the quick way to lose the agency. Selling to the public is not likely to ender the agent to a reseller. Trade associations, magazine or online reviewers, compliance authorities and so on will need to be able to differentiate between a professional and a consumer version of the product so the communication of product positioning and values is abundantly clear to whoever needs to be assured.
Map the relationships for any business and that chain of stakeholders no longer looks so simple.
Message development
While there is no simple answer that fits all scenarios, the overriding consideration must be to understand the specific characteristics, motivations and information-needs of each stakeholder group, develop the value propositions to which each group will relate, then devise comprehensive communication strategy and delivery.
A fundamental requirement for strategy development is the objectivity to reject or revise cherished beliefs based on "we know our business best" and/or "this is the way we do it here" arguments. These must be taken into account, but they must not interfere with the need for change. The newly defined value propositions, presented in a matrix that includes and qualifies all stakeholders should suffice to convince the business management of their validity, especially if the process has involved discussions with selected stakeholders.
Communicating with stakeholders
It should now be obvious that developing concise and effective communication material is not as simple as it might first have appeared. Those value propositions, complete with supporting product selection guides, specifications, maybe testimonials, case histories and whatever else is appropriate to the needs of each stakeholder group must not only be developed, they must also be devised to suit each and every relevant communication tool, These might include one or more websites, an intranet or the use of staff and resellers, newsletters, direct mail, advertising for each distribution channel and so on.
In big business, the marketing director and a specialist team will probably have the resources and skills to conduct these tasks, but for smaller businesses, a do-it-yourself approach is unwise, wasting time and frequently causing more harm than good.
Extending the analogy based on the examples above, communications professionals do not manufacture, import or distribute, even though their career histories probably include some such involvement. Why therefore should industry managers consider they, or their friends and families have appropriate strategic and communication skills? If you want to bark, get a dog.
Defining a value chain
Each and every transaction involving the business will have significance and this applies regardless of the size and type of business. Also, it is not possible to generalise. Each business will be different and the relativities will change over time. Some will initially seem more important than others due to size and immediate effect. In addition to ranking them, it is vital to identify them and their relationship with each other and the business, with particular emphasis on cause and effect.
Cause and effect examples
Some of the following examples, deliberately chosen to cover a diverse range of business types may appear simplistic or far-fetched, but are they? Again, cause and effect matters, both in the short and long term.
A small manufacturer will probably want to include not just the financial backers but also stakeholders that affect purchasing, technical and delivery issues. Fine, but what about the machinists who are not happy that a large proportion of components are now sourced from overseas, putting their employment at risk? Unless the business has a clear strategy, explains and assures them of their continued importance and considers their working environment and conditions, there is considerable potential for bad publicity on a scale that can quickly spiral out of control. These guys will talk to a wife who works at the bank, to a union rep, a supplier, a competitor, frequently in a campaign of negativity and disruption.
Big businesses like, say, supermarket chains think they have all the answers due to the money they spend on research and by changing the CEO or advertising agency on a regular basis. The buyer is scrutinised for financial performance, but is the significance of small-volume but strategically important lines considered? How many times does a shopper need to find that several of her favourite products have been deleted before she moves to the competitor? Multiply that by a hundred shoppers times a hundred stores and the effect is no longer irrelevant.
Another typical example is the importer/service agent for one or more international brands of equipment like, say, machines, instruments, or components. Most of these businesses want it both ways. They want to supply resellers - mostly small retailers, but they usually also want to sell direct to specialists like associations or government and perhaps the general public. The stakeholder mix is actually quite complex as are the cause and effect scenarios. Breaking the distribution or pricing models of the parent manufacturer is the quick way to lose the agency. Selling to the public is not likely to ender the agent to a reseller. Trade associations, magazine or online reviewers, compliance authorities and so on will need to be able to differentiate between a professional and a consumer version of the product so the communication of product positioning and values is abundantly clear to whoever needs to be assured.
Map the relationships for any business and that chain of stakeholders no longer looks so simple.
Message development
While there is no simple answer that fits all scenarios, the overriding consideration must be to understand the specific characteristics, motivations and information-needs of each stakeholder group, develop the value propositions to which each group will relate, then devise comprehensive communication strategy and delivery.
A fundamental requirement for strategy development is the objectivity to reject or revise cherished beliefs based on "we know our business best" and/or "this is the way we do it here" arguments. These must be taken into account, but they must not interfere with the need for change. The newly defined value propositions, presented in a matrix that includes and qualifies all stakeholders should suffice to convince the business management of their validity, especially if the process has involved discussions with selected stakeholders.
Communicating with stakeholders
It should now be obvious that developing concise and effective communication material is not as simple as it might first have appeared. Those value propositions, complete with supporting product selection guides, specifications, maybe testimonials, case histories and whatever else is appropriate to the needs of each stakeholder group must not only be developed, they must also be devised to suit each and every relevant communication tool, These might include one or more websites, an intranet or the use of staff and resellers, newsletters, direct mail, advertising for each distribution channel and so on.
In big business, the marketing director and a specialist team will probably have the resources and skills to conduct these tasks, but for smaller businesses, a do-it-yourself approach is unwise, wasting time and frequently causing more harm than good.
Extending the analogy based on the examples above, communications professionals do not manufacture, import or distribute, even though their career histories probably include some such involvement. Why therefore should industry managers consider they, or their friends and families have appropriate strategic and communication skills? If you want to bark, get a dog.
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