Friends And Foes – How Stakeholder Management Is Proving Critical To Steering Your Business Through A Crisis

Globalisation and the increasing interdependence of our societal systems are generating multiple levels of stakeholders that are a challenge to engage with in normal times and that become a nightmare to manage in a crisis. Besides employees, regulators, politicians, victims, customers and shareholders, organizations now also have to reckon with stakeholder groups that become involved through social media networks. The multitude and diversity of these intertwined stakeholder groups are complicating and compounding the intensity and spread of crises.

This is well illustrated in three recent and on-going crises: the disappearance of Flight MH370, the GM car recall and the Korean ferry disaster. Although very different from one another, each crisis shows its own highly complex and multi-level stakeholder scene. In each case, the communications and actions of the different stakeholder groups such as regulators, victims’ families, shareholders and politicians among others, have complicated the situation generating conflicting messages.

The reality of stakeholder power and influence on the development of crises must be reckoned with and addressed for an organization to have a chance to steer its course when things go wrong.

Today, we are witnessing more stakeholder outrage at corporate and institutional misbehaviour. Internet-based news sources allow individuals worldwide to follow such situations. Social networking sites, blogs and online news sites can play a big role in the unfolding of crises and scandals in the public and private sectors; the popularity of Twitter and Facebook, for example, has led to the light-speed dissemination of information and misinformation alike.

There is no clearer sign that stakeholder mapping must be high on the priority list of corporate executives today. To anticipate, prevent and mitigate escalating issues and crises, business leaders must have a solid grasp of the climate in which they are working as well as the stakeholder scene surrounding their business, industry and emerging issues.

stakeholderIn a crisis, stakeholder groups will attempt to highjack the situation to drive their own agenda. Therefore, the ability to anticipate possible stakeholder actions/responses can help mitigate their impact. Yet stakeholder mapping is not an improvised task. Stakeholder Mapping and Scenario Planning training is a must to ensure teams have the competencies to manage this process.

“Stakeholder mapping identifies stakeholder expectations and power and helps in understanding political priorities,” write Gerry Johnson, Kevan Scholes and Richard Whittington, Ph.D., in their book Exploring Corporate Strategy. “There are different ways in which stakeholder mapping can be used to understand stakeholder influence. It underlines the importance of two issues: (1) how interested each stakeholder group is in impressing its expectations on the organization’s purposes and choice of strategies, and (2) whether stakeholders have the power to do so.”

From Stakeholder Mapping to Scenario Planning
During business-critical times or when facing an escalating issue, management teams can use stakeholder maps to develop scenarios, build strategies, think freely and generate solution-focused approaches. In the typical scenario planning exercise, the management team simply asks, What if? Some scenarios are optimistic and some are pessimistic. The group then develops strategies and plans to cope with each.

“The great virtue of the scenario approach to planning,” write Charles Hill and Gareth Jones in their book Strategic Management Theory: An Integrated Approach, “is that it can push managers to think outside the box, to anticipate what they might have to do in different situations, and to learn that the world is a complex and unpredictable place that places a premium on flexibility, rather than on inflexible plans based on assumptions about the future that may turn out to be incorrect.”

In today’s context where crises no longer consist of a single stand-alone event, having your teams trained in fast-track stakeholder mapping and scenarios planning is a must-have asset. It will help your organization mitigate the impact of a crisis and steer its way through and out of it towards recovery.

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