1

Strategies

for maintaining

stakeholders

relations

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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

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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

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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.

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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

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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

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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

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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

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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.

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Strategies

for maintaining

stakeholders

Relations

Thank you