Stakeholder Management and Communication for Family Enterprises
STKH MANAGEMENT: REFERENCE FRAMEWORK
At the end of this module you will be able to:
01 Familiarise with a new framework for STKH identification
02 Process more robust strategies for STKH engagement
03 Acquire new good practice for internal / external comm
04 Nurture the fundamentals for a positive reputation
In IDP’s training module, we introduced the discipline of Project Management for Family Enterprises with a detailed background of all activities, functions and processes that gives reliability to the project.
In multiple occasions colleagues referred to the strategic role detained by communication so as to nurture and keep vibrant positive (professional) relations with third parties.
The objective is to establish a trustworthy image among the network of STKH you might interface with (civil society at large, partners, public administrations, third sector, etc.).
In the case of IDP’s training, the role of communication was in relation to the upscaling, visibility and mainstreaming of the project. In this context communication will be addressed as a standalone function of business management for competitive success.
The framework of STKHs Management
When we talk about STKH management, we refer to a three-layer process:
Firstly and foremost, it is important for organizations to identify which are the socio-economic actors co-sharing their same operative context…
Organizations, institutions, bodies and communities that might have an impact / might be impacted by the enterprise.
In practice there are several models recommended to carried out a comprehensive STKHs mapping analysis.
In the context of this training unit, we will introduce readers to the Salience Model as one of the most reliable and robust reference framework available in literature.
The Salience Model
8. Non Stakeholder
Source: Mitchell et al. 1997, p.853-854
The Salience Model is organized into three dimensions reflecting the urgency, legitimacy and power of the given STKH.
Based on our own reflections, the more the considered STKH converges towards the center of the model, the more it demands critical consideration.
POWER reflects the ability of the STKH to influence firms’ decisions and strategies
LEGITIMACY reflects how structured is the relation of given STKH with the firm
URGENCY reflects the type and nature of the STKH’s claim on the firm
The Salience Model – LATENT Stakeholders
The Salience Model – EXPECTANT Stakeholders
The Salience Model – DEFINITIVE Stakeholders
Now that you know the category of STKHs at higher priority for your PR activities, it is time to move on with the establishment of the “first contact”.
The actual engagement strategy of the given stakeholder should be compliant with its nature.
The communication should be settled in tones that reflects the STKHs:
More about Communication…
• One cannot, not communicate, your conscious decision of avoid the relations with a particular category of STKH is still a form of engagement (non-engagement).
• Every communication has a content and relationship dimensions: the true meaning of words is intercepted in the latter…
• Human communication involves both digital [what we say] and analogic modalities [how we say it], most of times the second proves to be more meaningful than the latter…
• Inter-human communication procedures are either symmetric or complementary:
SIMMETRIC – the two (or more) interlocutors are equal from a power-distribution perspectives
COMPLEMENTARY – the kind on relational ecosystems in which there is a sort of hierarchy between source and recipient of the message
The Complementarity of communication
As we saw from the Salient Model, the great majority of external relations entertained by a business are of a complementary frame – even the latent ones.
This is something that all FE’s managers should be clearly aware of as there is no scenario is which the organisation can allow for itself a symmetric and peer-to-peer discussion, including firms in the spectrum of “close partners” as they might always find a leverage from what the organisation decides to disclose (or not).
In that sense, you are recommended to test, validate, and valorise new and innovative communications strategies fine-tuned on the given recipient of the message…
1.Policy makers and public authorities – institutional, professional and reliable…
2.Customers (current and potential) – warm, embracing, inclusive, trustworthy…
3.Partners (organisations participating in the same value chain) – clear, specific, open, friendly…
4.Groups of interest / third parties – responsible, inclusive, open, direct, transparent…
5.Communities and general public – short and catchy, suggestive, evocative…
6.Network of associated organisations – open, formal but entertaining, collaborative, accurate, authentic…
7.Competitors – convincing (or as some might say, threatening!)
Do you need a plan?...
Most likely yes. The STKH engagement plan resumes in details evidences, findings and results from the identification assessments remarking what better strategies fits a category of STKH rather than the others.
Compared to a traditional marketing plan – or business plan – the STKH engagement plan has not a pre-defined scale and scope. It is an internal document that organisation might, or might not, disclose to third parties to prove the strengths and reliability of their outreach potentials.
Organisation that have an internal STKH engagement plan are recommended to update it on a frequent basis (starting from every six months) so as to evaluate the need for adjustments and fine-tuning.
Where do we want them to be?
STKH engagement is also about recording the progresses that we achieved throughout the process.
In do so, we look at the DESIRED vs CURRENT level of engagement of the given STKH.
Source: PMBOK® Guide – Sixth Edition (2017)
How do you manage your network?
STKH management requires an impressive set of soft skills as the very focus of this activity is one of the most unpredictable phenomenon in nature: human behaviour.
- Communicate frequently, keep them updated…but do not be too overwhelming
- Seek for inputs and feedbacks – you can always test new ideas to keep your network close and where you want it to be
- Be sensitive to diversity: human feelings are easy to break…almost impossible to recover
- Remain accountable for your actions and ensure the conditions for a trust-based relation
- Educate yourself to be more emotional and socially intelligent: show empathy and care…
- ….but be also authentic, sincere and genuine: people have an acute sense for fake reactions
- Negotiate so that the result of the relation is a win-win outcome
Communication and STKHs management is a matter of perceptions…
It is paramount to understand that communication with STKH – and the establishment of a trustworthy public image – is mostly a matter of balance.
In marketing and communication, the very first priority of an organisation is to convey a message that is perceived authentic, genuine, and most importantly, sincere.
These three aspects pertain to the specific offer, as well as, it alignment with the values and beliefs portrayed and showcased by the organisation – as pillars of its mission/vision.
Customers and STKHs are always ready to “test” the trustworthiness of the message coming from the organisations...
…in other words, customers and STKHs are very efficient in double checking if organisations walk-the-talk as they claim to do.
Now that firms’ communication is mostly mediated by digital media, it is extremely easy for a message to be misunderstood in its content or original intension.
When this happens – and it happens very frequently – organisations are in the very difficult situation of standing on a defence positions that absorbs time, energies and resources.
When things go wrong…
In recent years we saw an exponential rise on PR crisis.
These kind of scenarios involved also large corporations from which one might expect great expertise and know-how when it comes to communication, advertising and public engagement.
For instance, when H&M thought it was a great idea to have a black child model with that sweatshirt…
A clear testimonial that doesn’t matter how big you are, you cannot hide from people’s judgement.
In some cases, you might not have full control on what is the perception of your brand, product, service, etc.
Do you remember what happened to the Coca Cola’s share price after that famous
post-match interview of C.Ronaldo during EURO Cup 2021?
In that circumstance, Coca Cola executives could not control such circumstances, but things happened regardless…
When things go…unexpectedly well
…same subject but totally different outcome.
When C.Ronaldo was rumoured – without being confirmed yet – to join Juventus FC, the share price of the Turin club registered the quickest rise ever registered in the Italian stock market.
What will be later known as the “C.R. effect” recurred in other occasion, for instance when the performance of the Portuguese player guaranteed to the club its progress in the Champions League.
So what is the formula to stay in balance?
There isn’t, and that is the reason why PR, STKH management and communication are such delicate tasks.
Interestingly enough, the benefits of communication, PR and STKH management cannot be measured in ROI (Return on Investment), they are not tangible and it is not easy to calculate how they contribute to revenue streams.
In Porter’s Value Chain model for instance, Communication relates to Primary Activities – the one accountable for profits – as long as it remains associated to MRKTN and Sales. However, whenever something bad happens on that side, you can most definitely be sure that you will experience very tangible and concrete negative outcomes:
Three communication frameworks to address negative scenarios:
• Emergency Communication: “Emergency communications may include alerts and warnings; directives about self-protective actions; and information about response status, family members, available assistance, and other matters that impact response and recovery”
Definition from the FEMA (Federal Emergency Management Agency)
• Crisis Communication: a sub-function at the intersection of PR and risk management designed to defend organisations facing a public reputation damage
Addressing the elephant in the room:
A key dimensions of STKH engagement and communication looks into the ecosystem of people that contribute – in first hand – to generate value for the FE.
Employees are always representative of a DEFINITIVE stkh category as they detain:
An employee centred framework makes of workers the key focus of reference of the overall managerial approach.
Internal communication for business competitiveness
A motivated (engaged) workforce is the source of origin of competitive value and strategic advantage.
Employees detain the power to reignite, as well as disrupt, the efficacy and effectiveness dynamics of a FE – even more if they formally belong to the family’s ownership.
These two opposite forces are mediated (nurtured or based on the scenario) thanks to internal communication, which conveys of messages within the organisation – and other external partners but at high legitimacy – to guideline and orientate (1) operative and (2) intangible mechanisms.jjjjjj
A framework for Internal Communication in FE
As we saw from the previous exhibit, Internal Communication moves on a bilateral dimension:
Inputs from the environment translated into meaningful insights on the basis of which managers and directors takes coherent strategic decision implemented in the form of (operative, technical, intellectual) tasks by employee.
If manager are willing to put their egos asides and remain open to honest feedbacks coming from their teams, they have the opportunity to exploit the frontline’s perspective of employees on how to improve a process, task, etc. This fine-tune process might certainly have an impact on how managers see (and perceive) certain dimensions of their business, with following reconsiderations of long-term plans…
An integrated approach: external and internal
Remember (now you know about):
01 STKH Identification (reference model)
02 STKH engagement (good practices)
03 STKH management (good practices)
04 Public image and reputation
05 Internal & External Communication
Hihgly recommended is R.Freeman’s bibliography, with particular reference to:
Freeman, R. E. 1984. Strategic management: A stakeholder approach. Boston: Pitman