Category: Stakeholder Management

Flawed Decisionmaking is Dangerous


Every decision that an organisation must make has four broad sets of implications. The obvious three sets of implications are operational, financial and legal.

Namely:

  • Is it legal?
  • How much will it cost?
  • Can we implement it?

The fourth set of implications is generally either ignored, delegated or included in the process only on the basis of the "gut instinct" of one of the participants.

This fourth set of implications is reputational.

The reputational implications of a business decision can be defined as those that impact the way in which an organization is regarded by those with whom it interacts, including shareholders, customers and employees, as well as suppliers, government regulators, the media and even competitors (and any other stakeholder).

Any organisation is dependent on its stakeholders for support and the strategic importance of any stakeholder depends on how dependent the organisation is upon it. And this relationship can change over a period of time or due to indiscretions.

It is important to realise that a decision has reputational implications if it has the potential to affect the relationship between the company and any of these stakeholders. In other words, it is difficult to think of a decision that does not have reputational implications.

Reputation, most managers today would agree, is an asset, even if only a perceptual asset (or, if mismanaged, a liability). It certainly is not optional. Every corporation, organization, institution, individual has a reputation. The only option is whether to manage it or allow it to be inferred.

If it is to add value, it should be managed with the same care and attention as any asset. It should be obvious that if a decision has four broad sets of implications, and only three are formally and routinely considered, the potential exists for flawed decision making.

After all, the role of a manager is to manage all the assets under his or her control effectively. Tangibles and Intangibles.

Research has clearly shown that risk increases in patterns of decisionmaking. Those patterns can often easily observed in a boardroom situation. This risk increases when there is a lack of asking these types of questions:

  • Who are our stakeholders? (This is not a given. Stakeholders change position based on interest or need)j0426621
  • What are our stakeholders’ stakes? (Is it legal, moral, economic, public interest or self – interest?)
  • What opportunities and challenges do stakeholders present?
  • What economic, legal, ethical, and social responsibilities does our organisation have?
  • What strategies or actions should we take to best manage stakeholder challenges and opportunities?
  • Do we have a system for managing relationships with stakeholders?
  • How do we measure results? What metrics do we use to assess and gauge stakeholder relationships?
  • In a crisis how quickly can we communicate with our relevant stakeholders?
  • Do we know the various methods to engage with stakeholders and when not to use it?
  • Do we know how much we are spending on each stakeholder group and what the ROI is?
  • Have we developed a set of rules and guidelines on how best to manage the process of building stakeholder reputation with each stakeholder group?

Unless you can answer these questions, you cannot assess the fourth set of implication of a decision, and your decisions will at best remain skewed.

The question I want to ask is whether managers will make certain decisions if they have been sensitised to the answers to these questions?

(To learn the answers to these questions and many more, attend the Stakeholder Reputation Master Class at the Hotel Apollo in Randburg from the 20th – 21st January 2010. Go to http://stakeholderreputation.invite43.com/ or e-mail reputationeducation@icon.co.za for a brochure and registration form)

You better be Awake: Searching for Vulnerabilities


Business vision

A major activity of reputation management is surveillance of the internal and external environment. 

That’s what journalists do to report on the news. The chief reason reputation managers need to do it is to search for areas of vulnerabilities. To search for potential issues, trends, patterns or events that might harm the organization’s reputation.

To protect your organisation’s reputation, managers need to be interested in certain kinds of information about their organization’s environment, including some of the following information:

  • What are the burning issues in your industry?
  •  Which stakeholders are in a position to help or hurt the organization? The list should include conventional stakeholders, e.g., stockholders, employers, community citizens, government officials, as well as activist groups in the so-called third sector that seek to change corporate behaviour.
  • What opinions do these stakeholders -and the general public-hold toward the organisation?
  • Are attitudes generally favourable or unfavourable? What are their expectations of the organization? Do they feel the organizations measure up to these expectations?
  • If not, how strongly do they feel about the gap between expectations and performances?
  • What actions, if any, are they likely to take?
  • What is the media saying about your organization and industry, etc? 

In addition to monitoring the external socio-political environment, reputation managers should examine data from a variety of internal feedback systems. These data may be collected by the public relations department or by a lateral staff organization such as the personnel/industrial relations, consumer affairs, or investor relations department. For example, employee relations indices could include a high number of grievances, a high turnover rate or even litigation cases.

To close the gap or feedback loop I would certainly urge Reputation managers to establish close links with the Risk Department, Internal Auditors and Compliance Officers in the organisation. Often these are the individuals that uncover areas what I would call smouldering crises – any serious business problem which is not generally known within or without the organisation, which may generate negative news coverage and reputational damage if or when it goes "public" and could result in fines, penalties or unbudgeted expenses, loss of business and destruction of relationships.

You should also create checklists of the questions you want to ask. Here is a partial checklist example:

  • Create checklists for sensitive spots where anticipation can help prepare your organization to combat trouble.
  • Do your homework on current events. Check your organization for the troubles besetting other companies in the news. 
  • j0430721Scanning online and other media aggressively, and in adversary mode, looking for areas on which your company can be attacked, including possible actions, attitudes and policies. 
  • Keep updated on, and check your vulnerability on new laws, regulations, SHE developments, BEE developments, stakeholder expectations, market trends, financial trends. I use tools such as Google’s News Alerts and various search engines especially meta search engines like Pandia Powersearch to keep myself update.
  • Use Social Media monitoring tools such as trackur and others
  • I also use a brilliant program called FeedDemon that in my mind is the best RSS Newsreader program available. It enables me to set up feeds of my interest sites so that I am always up to date with what is happening out there.

What are you doing to stay aware?

Years ago, Watts Whacker, the futurist was asked more about his profession in the Fast Company magazine (Dec & Jan 1997 issue). This is what he said:

"A traveller encounters the Buddha on the road and asks him. "Are you a deity?

Buddha says no. "Are you a saint? Buddha says no.

"Are you a prophet?" Buddha says no. Exasperated the traveller says:

"Then what are you?"

Buddha answers:" I’m awake"

How awake are you? Do you know the latest trends in your market?

What about your company’s reputation? What smouldering crises are there in your business, ready to destroy your careful crafted reputation?

You better be awake.

Face to Face remains a Vital Tool


Despite the rise in virtual meetings, business executives prefer face-to-face meetings, according to the results of a recent Forbes Insights study.

The study, ‘’Business Meetings: The Case for Face-to-Face,”” was based on a June survey of 760 business executives. It found that 84% prefer in-person
contact to virtual because face-to-face meetings enable them to build stronger relationships (85%) and provide greater opportunity to “read”
another person (77%).

Nonetheless, teleconferences, videoconferences and Web conferences have grown as 58% of respondents said they were travelling less for business now
than in January 2008.Those that preferred virtual meetings cited the time savings (92%) and the financial savings (88%).

This is further proof that a person’s use of any tools needs to be carefully weighed against advantages and disadvantages.

A Communication “Bill of Rights”


clip_image002

I recently had to facilitate an improved service level agreement between two parties in the IT field. The particular project was about to be shelved by the client due to severe scope creep.

I quickly assessed that one of the root causes of the scope creep was caused by the lack of defining interpersonal and organizational communication proccesses before the start of the project.

To help them solve this problem, I got them to draw up a communication ” bill of rights”. These guidelines will now form the basis for future dealings and relationships.

A Bill of Rights is defined as the formal summary of those rights and liberties considered essential to a people or group of people:example – a consumer bill of rights.

In this instance it was useful to develop such a communication bill of rights to govern the communication processes between the client and the supplier.

This is what the group decided upon:

  1. Agree on a glossary of terms. Always check for understanding.
  2. Communicate without an element of commercial interest at first.
  3. Any form of communication that impact in terms of time; scope or money must be formalised.
  4. Be specific. Relate this to standards specification.
  5. Listen! Listen! Listen!
  6. Always give feedback – Respond appropriately i.e. If you receive an e-mail with an idea, at least acknowledge receipt.
  7. Proper communication upfront at the start of a new project or phase with the whole team is essential.
  8. Establish channels of communication at the beginning of each new project.
  9. Communicate the Bill of rights – structure, purpose and method upfront.
  10. Separate personal issues from professional issues

You may find this technique useful the next time there is inter-departmental or client conflict. Facilitators often use it another form, such as establishing ground rules for a meeting.

Stakeholder Reputation Management Master Class Registrations Close Today!


Deadline

Your chance to register for next week’s Stakeholder Reputation ends this afternoon – Thursday, the 15th October at close of business.

This is an ideal opportunity to join friends and colleagues to learn about the important strategic subject of managing stakeholders and their impact on organisational reputation.

Here is a quick test for you. Can you answer the following strategic questions:

  • Who are our stakeholders?
  • What are our stakeholders’ stakes?
  • What opportunities and challenges do stakeholders present?
  • What economic, legal, ethical, and social responsibilities does our organisation have?
  • What strategies or actions should we take to best manage stakeholder challenges and opportunities?
  • Do you have a system for managing relationships with stakeholders?
  • How do you measure results? What metrics do you use to assess and gauge stakeholder relationships?
  • In a crisis how quickly can you communicate with your relevant stakeholders?
  • Do you know the various methods to engage with stakeholders and when not to use it?
  • Can you state how much you are spending on each stakeholder group and what your ROI is?
  • Have you developed a set of rules on how best to manage the process of building stakeholder reputation with each stakeholder group?

To learn the answers to these questions and many more, attend the Stakeholder Reputation Master Class next week at the Hotel Apollo in Randburg, Johannesburg, South Africa.

To learn more about the program, go to http://stakeholderreputation.invite43.com/ or e-mail reputationeducation@icon.co.za for a brochure and registration form.

This is the last Stakeholder Reputation Master Class event for 2009 so register now.

Hope to see you there and share valuable learning experiences with you !

P.S If you are interested in learning more about professional services and consulting practice marketing, check out my workshop for consultants and interested individuals – Monday 10 November : Market your Consulting Practice: http://marketingaconsultingpractice.invite43.com/

Learn How to Think like an Activist


image

Many managers cringe when they hear the word activist. Because, activists as a stakeholder group can potentially damage an organisation’s reputation if relationships with them are not carefully built, understood and maintained.

I have always been intrigued how in movies, psychologists trying to track a serial murderer, try and become that person. They study that person’s motives, habits, appearance, background, etc. So, One of the best ways is to learn to be an activist yourself. By learning to become an activist, you will prepare yourself to handle potential reputational crises and campaigns against your organisation.

The Graduate School of Business at the University of Cape Town call this the immersion principle. Immerse yourself until you fully understand all there is to be an activist.

Trouble is that these days, activists are no longer a plural word. A single person today has tools at their disposal to start a one person crusade. Technologies such as Blogs, Twitter, Facebook and other social networks have increased the potential power of an individual, and companies should prepare themselves for online campaigns and other means of mobilisation.

Here then is a link to a free online course called The Virtual Activist – http://www.netaction.org/training/v-training.html – The course needs updating, but if you are a Twitter user, Facebook or MySpace follower, then you will learn a lot from this course.

The Virtual Activist illustrate why the communications efforts of social activists, including nongovernmental organizations, are so successful. Activists provide their supporters with both information and strategic and tactical tools. The combination of information and tools empowers people to take action, including communications or PR activities.

To further equip yourself, I can recommend the following site which should bring you up to speed: http://mashable.com/category/how-to-web/ with the latest Social Media tools and approaches.

Key Questions to ask about Managing Reputation


As reputation is most often considered a collection of perceptions and opinions, past and present, about an organization which resides in the consciousness of its stakeholders‘, it appears absolutely necessary to get a better grasp of the main drivers.

Managing that reputation is becoming increasingly important, according to Charles Fombrun, professor of management at New York University‘s Stern School of Business. He says that reputation is becoming central in the language of strategy and competition, rather than in the old language of public relations.

He states that a strong reputation can help a company: attract resources (e.g., new employees, customers, and investors); improve employee loyalty and morale; secure customer retention and loyalty; develop a competitive advantage; and increase sales and income. Executives around the world overwhelmingly agree that, when several companies‘ products or services are similar in quality and price, corporate image often determines which company customers do business with ―The majority of executives also agree that companies with strong reputations can charge more for their products and services.

Here are some key questions to ask about managing reputation in your organisation:

  • What kinds of proactive steps should companies take to augment their reputations?
  • What aspects of reputation risk are unmanageable?
  • Who are the key players in managing a company’s reputation? (The need for a systemic approach)
  • How should a company’s organization reflect its interest in preserving and enhancing its position? What level of risk assessment is expected and how should companies approach this task?
  • How can a company identify key risks, analyze their root causes, and take proactive steps to preserve the corporate reputation?
  • How can a company’s regular risk assessment process help to point out particularly critical areas that could affect reputation?

If reputation risk is any action, event or circumstance that could adversely or beneficially impact on an organization‘s reputation‘, the drivers of reputation, and sources of potential risk, need to be identified, analysed and managed.

To learn how to do this attend one of our training seminars.

Congratulations to Jacko Maree – the most trusted CEO in South Africa


An article in the Business Day today states that MORE than 200 directors and executives of JSE-listed companies believe Standard Bank’s Jacko Maree is the most trusted CEO of a listed company, according to results of a recent survey on corporate reputation management.

The annual Trust Barometer study by Ask Africa draws a link between strong leadership qualities of the head of a company and its ability to attract talent, customers and investors.

What better way to have your performance and behaviour measured than by your peers in a transparent manner? (This a good example of a 360 degree feedback survey and its value).

The annual Trust Barometer study by Ask Africa draws a link between strong leadership qualities of the head of a company and its ability to attract talent, customers and investors. The Trust Barometer is a corporate reputation benchmark survey that ranks listed and non listed companies across a range of reputation drivers such as innovation, leadership and social responsibility.

“The link between reputation, trust and CEOs are clear, considering that winning companies have winning CEOs and executives,” it says. The study says leadership** is the strongest driver of reputation , and that the responsibility for leadership rests on the shoulders of the CEO, “making his role crucial to the trust and reputation of a company”.

But Ask Africa director Sarina de Beer says reputation management in many companies is not being taken seriously at either board or management level.

Companies only seem to spring into action when their reputation is under threat from a crisis, such as a strike . Management of corporate brand reputation is a distinct management and operational imperative, she says. She faults some listed companies for having a narrow view of who their stakeholders are, limiting them to shareholders and customers.

Read the full article at: http://www.bday.co.za/Articles/Content.aspx?id=80578

It is always good when great minds think alike. In my newsletter Powerlines 87 which I sent out yesterday, I made similar observations about the lack of proactive reputation management by corporates.

It is also intriguing that so many executives profess that they understand stakeholders, until they attend my Stakeholder Reputation Master Classes. So often they come to me afterwards and say, we never knew it was this important and complicated.

Reputation is derived from the way an organisation is perceived by it’s stakeholders and how they measure the institution’s performance and behaviour. Standard Bank, by the way have done a lot of work in this area. They have a dedicated Stakeholder Management unit influencing this process.

Well done to Mr Maree. May your example resonate!

**Footnote – It is interesting that the study shows that Leadership is the strongest driver of reputation, yet few companies have Reputation & Stakeholder Management as a subject on their annual Leadership & Management Development agendas. Makes you think, doesn’t it? (Excuse the pun)

The Consumer Protection Act poses Reputation Risk


The new SA Consumer Protection Act 68 of 2008 (CPA), which was gazetted on 29 April 2009, and which is scheduled for implementation in two phases, will have an effect on the reputations of companies.

A risk emerging about this Act is that a lack of knowledge in complying with the Act could cost a business dearly. Courts are given comprehensive powers to grant orders dealing with any contravention of this Act. Should a business be convicted for contravening the act, it may face a hefty fine or even imprisonment!

But that is a minor impact compared to the potential impact on reputation.

Such fines will attract negative publicity which could have a spiral effect. Reputation risk means the risk that an institution’s reputation is damaged by one or more than one reputation event, as reflected from negative publicity about its business practices, conduct or financial condition. Such negative publicity, whether true or not, may impair public confidence in the company, result in costly litigation, or lead to a decline in its customer base, business or revenue. Lots of research has shown the impact on shareholder value of incident mismanagement.

Complying with the requirements of this Act will necessitate changes to decision making patterns, procedures, systems and attitudes*. Many a service or product delivering businesses, amongst others, will require specialist advice to ensure that they are complying with the provisions of the CPA.

REPUCOMM with its specialist stakeholder management knowledge and training solutions are ideally placed to assist organisations with this mammoth task of not only complying with the Act’s requirements but bringing about a mindset shift and culture that will factor in the consumer’s stakeholder right from the beginning of the planning cycle and value chain and not after the fact.

Stakeholder Reputation Risk refers to the risk that emerges when the reasonable expectations of stakeholders are not met. For many years companies professed that they took the interests of the consumer at heart when they planned strategies. However continuous scrutiny, scandal revelations and stakeholder complaints have highlighted that basic consumer expectations have not been met, with the result that the regulator decided to take action and protect society. Ultimately this law is a direct result of companies mismanaging the stakeholder process.

It is generally concurred that the CPA, through its specific focus contributes to a more fair and balanced relationship between suppliers and consumers. However the issue is that it is enforced, raising even more mistrust. Will Businesses comply because they are forced or out of free will? Believe you me, actions will now be even more thoroughly scrutinised.

Ultimately, this Act together with legislation such as the National Credit Act and the Competition Act will provide more rights and greater protection to the consumer stakeholder. This will lead to potentially more negative publicity and consumer activism.

Footnote – The impact of the Competition Commission in the Bread and Pharmaceutical pricing collusion sagas should also not be discounted. As one article stated – Look out for Early Morning Raids…..! Intentions will be measured and weighed.

Cut out Today’s Page 20 from the Business Report (Star Newspaper)


The Media is a powerful Stakeholder Group and for me one of the best ways that I have seen the Media re-emphasise this; is through the full page spread that appeared in today’s Star Newspaper – Business Report Section Page 20.

The Headline caption reads: ‘’For the news, turn to the news leaders’’

Just read the following: Independent Newspapers remains the leading newspaper publisher in South Africa, dominating the country’s four major metropolitan areas. The group has a nett weekly readership of 6, 768 million adults. The page then goes further to show the photos and details of their award winning journalists.

This is a good page to cut out and put in your Media Relations file and database.

Looking at the stats above, do you need any further encouragement to start a dedicated media relations function in your organisation?

New Stakeholder Group – The National Regulator for Compulsory Specifications


One of the lessons I teach in my Stakeholder Reputation Master Classes is that every campaign, project, problem or issue will need a relook at stakeholder profiling.

So here is a new stakeholder group whose role you will have to factor in carefully when you do your crisis management preplanning, especially where potential product recalls is listed as one of your key risks.

The NRCS (National Regulator for Compulsory Specifications) is a new public entity that administers technical regulations known as compulsory specifications on behalf of the Department of Trade and Industries in the interest of human health, safety, protection of the environment and fairness of trade.

The regulated products include vehicles and components, electrical appliances components and electronics, frozen marine products, safety equipment and construction materials. The NRCS also administers the Trade Metrology Act and regulations relating to Weights and Measures.

Lack of Legal Compliance is often cited as a major cause of reputation risk. Your compliance with the regulations of the NRCS as well as the relationships that you build with this new entity is important for your reputation.

Anyone can be an Activist


Today’s activists have a new set of tools at their disposal.

Mobile phones with cameras, Blogs, Twitter, Youtube….The video link below explores the use of technology in the context of human rights violations.

FORA.tv – Spotlighting Human Rights: Digital Photography and Video

It raises issues of mobilization, the use of communities of practice and the application and use of social media.

Stakeholder Managers will have to do their homework about these trends and application of technologies, so that they can adequately protect their organization’s hard-earned reputation.

Here is what I tell clients as part of preparing to deal with activists.

First thing to do is learn all you can about Saul Alinksky – protesters study his tactics, so YOUR tactics must be to study that so you can anticipate them. For those interested in the late Saul Alinsky’s approach, here’s a summary of his rules, from his book, “Rules for Radicals”.

13 RULES ON TACTICS for Organizers and Interest Groups from Rules for Radicals by Saul Alinsky.

  1. Power is not only what you have but what the enemy thinks you have.
  2. Never go outside the experience of your own people.
  3. Whenever possible go outside of the experience of the enemy.
  4. Make the enemy live up to their own book of rules.
  5. Ridicule is man’s most potent weapon.
  6. A good tactic is one that your people enjoy.
  7. A tactic that drags on too long becomes a drag.
  8. Keep the pressure on.
  9. The threat is usually more terrifying than the thing itself.
  10. The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition. {The pressure produces the reaction, and constant pressure sustains action.}
  11. If you push a negative hard enough and deep enough, it will break through into its counter side; this is based on the principle that every positive has a negative.
  12. The price of a successful attack is a constructive alternative.
  13. Pick the target, freeze it, personalize it, and polarize it.

Thus to expound on this:

Item 4 – Make the enemy live up to their own book of rules. Anyone can now be an investigative journalist and like an investigative journalist can take a company’s policies and procedures manual or value statement and then apply it to a situation, showing up the company for not complying with international, local and company best practice, they can now do the same.

With technology it now becomes easier to show up empty words versus action and behavior.

The real action is the enemy’s reaction. The enemy properly goaded and guided in his reaction will be your major strength.

Tactics, like organization, like life, require that you move with the action. The 13th Rule is the Most Important.

Key Learning: Now study Social Media and how to use the Internet -Facebook, Twitter and blogging and you will understand how activists can now rally for causes around the world.

Take a look at the HANDBOOK FOR CYBER-DISSIDENTS

http://www.rsf.org/rubrique.php3?id_rubrique=542

Reporters without Borders have published a “Handbook for Bloggers and Cyber-dissidents,” with technical instructions and advice for people who want to use the internet as a means of expression in repressive societies.

“Bloggers are often the only real journalists in countries where the mainstream media is censored or under pressure,” they state. “Only they provide independent news, at the risk of displeasing the government and sometimes courting arrest.” The handbook provides tips on how to remain anonymous while blogging; explains how to publicize a weblog, and offers basic advice on ethical and journalistic principles.SOURCE: Reporters without Borders

Mine your Own Database


Did you know that you are sitting on a goldmine?

j0401005Yes, your contact database is a goldmine from an information & sales point of view. I am sure that you have heard the saying that it is 6 times more expensive to get a new client than it is to get a new client.

So here is a technique and a tool that you can use to your own advantage.

The Ladder of Loyalty is an useful technique used to move contacts along a continuum from where they are mere contacts to where they become an advocate of what you stand for.

The idea is to go through your database and determine which of your contacts fall into the following categories:

  • Advocates – These people love what you do and tell everyone
  • Clients – Those people who will naturally call you when they have a need
  • Customers – People who have already used you
  • Prospects – People who can definitely use your services
  • Suspects – These people might be able to use your services

You then develop strategies to move these categories starting with suspects becoming prospects, and so on. You move them up the ladder of loyalty.

Apart from doing this manually, I also found a brilliant piece of software called Xobni the other day. Xobni is the Outlook plug-in that helps you organize your flooded inbox. Xobni’s Outlook add-in saves you time finding email, conversations, contact info & attachments.

Apart from its lightening fast search capabilities and ability to link to other social network sites, it provides Xobni Analytics — its powerful tool for analyzing your own email behaviours over time.

What day of the week are you slowest to respond to email? What time of day do you send the most email? Was this January or last January busier with new email contacts? Who reacted fast to your requests? Who haven’t you contacted lately?

Who are the top 10 people you send emails to? Do you send more emails to your boss than your spouse? Xobni exposes all of this data and more about the people you communicate with — in Outlook, and automatically.

Check it out – http://www.xobni.com/

It might be a good exercise to first of all complete the ladder of loyalty exercise, then combine it with Xobni. It may just show you where you are lacking in engaging with your database.

Who knows what sales opportunities it might reveal.

Revolving Door Connections not so Dangerous?


The ScotlandonSunday website ran an interesting article on the weekend called ‘Study reveals true extent of ‘old boys network’ between Government and banks’

It quoted a report which identified key individuals who have moved jobs between politics, financial institutions and the bodies charged with regulating the banking industry in Britain.

The report warns the close relations between business and politics "lead to a conflict of interest at best and a suspension of critical faculties at worst".

The study of 116 of the world’s most successful companies will be presented to a Global Forum on Public Governance, run by the Organisation for Economic Co-operation and Development (OECD), in Paris this week.

The research looked at so-called "revolving door connections", when a company employs former or current politicians, civil servants or members of regulatory bodies, or where individuals move from the financial sector into politics, Government or regulatory bodies.

Barclays was the most connected British-based company with 14 revolving door connections, and in South Africa they are involved in ABSA, who now has its own example with Marina Ramos and the Trevor Manuel link up. The same applies to Union leaders now in Government.

What is interesting from the article is that perhaps there is an upside to the conflict of interest issue and that is that governments will better understand business and vice versa.

Read more : http://scotlandonsunday.scotsman.com/latestnews/Study-reveals-true-extent-of.5230278.jp

Where it has implications is that organizations keen to build and sustain their reputations, need to factor these types of issues into their recruitment & selection and decisionmaking practices. There is a saying – Be Careful who you get into bed with. The same goes for directorships. In an era where there is a call for corporate responsibility and governance, even lobbying, recruitment and partnering can potentially do damage.

I believe that even though these issues are handled by different departments, it definitely can be seen as a stakeholder management issue. Deciding which role player and stakeholder needs to be brought onboard are strategic decisions of the highest order.

What will be important is to anticipate what other stakeholders will say when you make a decision to use revolving door connections. Not only do you have to determine the strategic impetus of the decision, but also what perceptions it will create.

The dynamics on decisionmaking processes can be important, but often the corporate immune response (OD parlance – the corporate culture)rectifies this fairly quickly with little damage.

Now’s the time to Review Stakeholder Relationships


What a time to be sending out my newsletter! Yes, just after SA’s election day.

Why today? Well I think that the message to you, has to be, that it will be vital in the oncoming weeks to ascertain who of your contacts and stakeholders are still in power or are still covering the same portfolios.

Now will be the time to redo stakeholder profiling of political parties and the government stakeholder. Perhaps you made friends and built relationships in the past with contacts that will now find themselves in the same position as a minister with no portfolio. Perhaps the persons you ostracized in the past is now in a power role.

One of the biggest lessons to learn in stakeholder reputation management is that every time there is a new issue, new project or new campaign, it is vital that you redo stakeholder profiling. People’s roles and positions, views and perspectives can change overnight.

The lesson is that constant monitoring and management of relationship building efforts is an ongoing affair and not a once-off. (To learn more about this, consider attending the next Stakeholder Reputation Master Class)

How good is your Credit Reputation?


How good is your Credit Reputation?

The other day I saw a sticker in the window of a small business that stated: “ Maybe if a man pays cash, maybe his credit is no good!”

Or are you the type of person that when you go to see the Bank Manager for an overdraft extension, that on his suggestion you sit down on the chair, you rather sit down on your knees in the praying position?

Many years ago, a person would have a personal word-of-mouth reputation among friends, but now a credit report is the person’s financial reputation in print. The information in this report is considered reliable (if not always accurate – but that’s another issue) until disputed.

Creditors rarely care why a bill is not paid and so routinely will report to the credit bureaus their payment experience with a borrower/debtor. A very foreseeable result of not paying any credit account on time, is the appearance of negative information (late payment(s), charge off or collection) on the credit report.

In an age when credit reports are part of the application review process for business and personal loans, investments, employment or promotion, or various kinds of insurance, the information in a credit report can make a huge difference in the cost of service (interest rate, risk rating) or acceptance or denial of the application.

There is thus a huge potential for reputation risk in your individual capacity, should you default on paying an account or get in arrears. The negative reputation risk in this case can make or break the application. When I talk to audiences about Reputation Risk, I often sketch out the potential damages that can occur. In the case of an organization, a credit downgrading can impact the business severely. For an individual the loss of credit – such as increased cost of credit or the loss of a credit opportunity – may be devastating.

In business the issue of cash flow is paramount. It is the role of the Credit Control department to stay on top of things. They cannot afford to carry slow payers or late payers and you will quickly develop a negative reputation with them.

But as in good stakeholder communications, there are some things that you can do. Good and open communication is a vital tool in this regard. Talk to your creditors is a much better option that trying to avoid them. Go and see them. Explain your position. Show them that you are willing to pay, but just not able to at the moment.

In credit control departments they generally define 3 types of people:

- Those customers who generally tend to pay late and might need reminding

- Those customers who will eventually pay but are experiencing some financial problems and;

- Those customers who cannot pay at all

j0427740[1]It does not matter which category you fall in, be careful and communicate soon if you do have a problem.

Here is something from another angle. I wonder how many companies who say they practice stakeholder management, ever bother to listen to small entrepreneurs who do business with the company. The way Creditors tend to treat the small business person(people like myself) is shocking. They lose invoices, delay the process through elaborate administrative processes (not all of them legally imposed) or stall. Many times it is because clerical staff do not understand the concept of the importance of cash flow.

So companies, this e-mail is also for you. What is your Reputation like in the eyes of the person who did work for you and now have to struggle to get paid? Just because they are small, be careful. Today activists have the means to do harm to your good name. If I have to put the times it has happened to me where I have worked with delegates – lovely dedicated people – only for their backroom staff to do harm, on my blog, there will be some red faces in corporate circles.

Spin is not enough


61215_coffee_and_newspaper Last week I e-mailed a company that had some negative publicity suggesting to them that they     needed to be careful as their reputation risk profile is increasing. Incredulously I received a mail back from the company stating that management was perfectly happy with the performance of its spokesperson.

This is a clear showing how managers can misunderstand reputation risk and so-called spin. Protecting an organization’s reputation start way before you have to field media questions and appear in a negative light in the media.

It is much more than just issuing statements to the media or starting an internal witch-hunt for the persons that leaked certain information to the media.

It is about acting proactively, investigating the allegations and realising that there are some dissatisfied stakeholders. What is clear from the articles in the media is that this company’s internal stakeholders are dissatisfied. That is why Reputation Risk is often defined as the state of negative public opinion when the reasonable expectations of stakeholders are not met. It can result in loss of sales, share value decreases and breakdown in relationships.

What this company does not realise is that Reputation damage is rarely a once-off incident. If you dig deep enough into an incident, you will find intent; you will find a policy that made the accident possible.  The earliest warning signs involve issues of integrity or quality.  Where a company is accommodating policies that disadvantage either customers, employees or shareholders – even if they’re not doing anything illegal that is the beginning of an environment where the values of the company are going to make a decision possible that ultimately could do a lot of damage.

Everybody’s reputation breaks. There is no’ such thing as an indestructible reputation.  Even the best company’s reputations have. You have to look at it as a suit of armour.  Sooner or later your reputation will be in jeopardy, and how thick will your armor be?

Unfortunately there seems to be in many companies a tendency to treat reputation risk management like a faucet. Something that you can switch on when the time comes. This stems from the inability to realise that damage control and fire- fighting after the event or crisis is a Reactionary Approach.

Internationally there has been a paradigm shift towards a Proactive approach which includes building up “reputational capital” before a problem or crisis arises.

It will do this company good to realise that to build reputational capital require an understanding of the drivers of corporate reputation and the risk and opportunities that each driver offers. That knowledge coupled with the understanding that no Company, organisation or individual whose livelihood depends on public support can afford to function without a reputation building and a crises communication plan will enable delegates to formulate strategies for building, sustaining and protecting corporate Reputation.

This thinking and understanding is far more than just having a “spinmeister” employed.

An Online Brand Community is a Stakeholder Tool


I just read a very good article about online communities. This article by Nancy Strauss – Should You Launch a Brand Community? contains excellent pointers.

For instance, What Is an Online Community?

Often, the designated community sections of corporate and e-commerce Web sites do not actually function as online communities. Instead, they are pages where the company posts content for its customers, or they are message boards where visitors can publish comments on specific topics.

Speakersite Online communities are about the formation of relationships among Web site users. To achieve that kind of interaction, certain factors have to be present:

  1. The members have to be visible to each other.
  2. The members have to have a way interact with each other directly on the Web site and a reason to do so.
  3. Members need to visit the Web site regularly over a period of time in order to get to know each other.

Read more about this at:

http://www.marketingprofs.com/9/should-you-launch-brand-community-strauss.asp?sp=1#storyContinued

You could see examples of this by accessing NING on the Net. Another very good example is Speakersite. This is a community that I belong to.

 

Think you can’t make a Difference?


“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it’s the only thing that ever has.
- Margaret Mead (1901-1978)

You can easily change the world around you, and by doing so, you will change the world at large.

Are you ready for some ways to make a real difference?

Want to learn more about Stakeholders?


Want to learn more about Stakeholder Reputation Management? Then start to use your eyes and a scissors! What do I mean?

The Afrikaans newspaper, the Beeld today ran an an article called ‘Zuma bekoor Afrikaners’. On the right side of Mr Zuma’s face there is a block that contains a list of all the stakeholders that attended the meeting, as follows:

  • AfriForum
  • ATKV
  • Afrikanerbond
  • AgriSA
  • Boerevolk Verteenwoordigende Raad
  • Dameskring
  • Dames Aktueel,
  • FAK
  • Jong Dames Dinamiek
  • Gereformeerde Kerk
  • Landbouskrywersvereniging
  • kykNET
  • NG kerk
  • Orania beweging
  • Praag
  • Rapportryers
  • TLU SA
  • Solidariteit
  • Die Suid- Afrikaanse Akademie vir Wetenskap en Kuns en die
  • Voortrekkers

 

Some of these stakeholders might one day feature in your planning. Have you done research about them? Do you know what these groups expectations and issues are that might impact on your organization and its reputation?

Time to get going! Do you know why this type of R & D is important?

Next time you read an article, think about the people and groups mentioned. Should they be on my list of contacts? Should I engage them? Should I inform them about my existence?

Salespeople call this identifying contacts, but from a Stakeholder Management perspective, it is a vital exercise.