By: Deon Binneman

An organization derives its reputation from its stakeholders. Therefore the perceptions that is created through the things stakeholders see, read, hear about or experience first hand.

But what is a stakeholder? The word stakeholder means anyone that has a legal, moral or economic stake in an activity. Some stakeholders have more clout than others, but that is also changing.

Ghandi was an activist. Today with the right tools, any one person can become an activist or a journalist, hence the rising of the citizen reporter phenomenon. I can have a block of shares in a company, worry about ROI irrespective of the number of people who are retrenched. Alternatively I can be a member of the media. I will have an interest in what your organization does…because the public has a right to know.

The term ‘stakeholder management’ refers to the development and implementation of organisational policies and practices that take into account the goals and concerns of all relevant stakeholders. The term Stakeholder Management also involves the dialogue, relationship building and process generation that take place between an organisation and its various stakeholders. Each of these stakeholders can affect an organisation’s reputation positively or negatively and necessitate different strategies to leverage the situation.

Key questions therefore to ask:

• 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 firm have?

• What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?

- What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?

– Should we deal directly or indirectly with stakeholders?

– Should we take the offense or the defence in dealing with stakeholders?

– Should we accommodate, negotiate, manipulate or resist stakeholder overtures?

– Should we employ a combination of the above strategies or pursue a singular course of action?

All of these are vital strategic questions to ask for any project, incident or issue. Reputation Risk emerges when the reasonable expectations of stakeholders are not met.

What is reasonable? Let me use an example. The recent amount of product recalls inc. Mattel, aqua dots and the Chinese examples illustrates this very clearly. As a consumer safety is a basic right. I therefore would expect an organization to communicate with me, and warn me of the advantages and drawbacks of a product including tips on how to use it.

But do companies do this? Only those who are enlightened, and not all are. It is only when a body like the FDA forces companies to correspond.

Take a look at the Supersize Me saga, where through a class action law suit, McDonalds were forced to start to use more ethical labeling and change their menus. Why did it happen in the first place?

They were out of touch with current thinking. It is the same with collaboration methods. There are companies who try and stop staff from accessing Facebook, write blogs and use other forms of social media, thinking they can control messages. Yet, we deal with people in companies. Real, live people – not spokespeople, not Corporate Heads, but normal day to day people.

How ready is your organization to engage with its stakeholders? Do they have an integrated or a fragmented approach to managing stakeholders in the organization? Would you like to learn more about this interesting and holistic field of management?

Deon Binneman – Reputation Management Speaker,
Consultant and Trainer, REPUCOMM,
mailto:deonbin@icon.co.za

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