Our life, our activities, our social interactions, and any socioeconomic efforts always impact other people. They also involve a wider audience than merely ourselves. Life is all about managing relationships, from something as simple as purchasing clothes to as complex as running a business. The success of any strategy/initiative depends on how well we work on these relations. Therefore, the direct path to success goes through effectively managing these key stakeholders and relationships with them.
The more complex a situation or decision is, the more significant is stakeholder relationship maintenance. Therefore, maintaining and valuing stakeholders in business is of crucial importance. There is a never-ending list of essential stakeholders for a business. The usual myopic view might consider key investors as leading stakeholders. However, there are many others whom people usually ignore. Suppliers, contractors, investors, employees, third-party partners, and customers are pivotal stakeholders for any business.
Given such a long list of business stakeholders, managing sustainable relationships is not easy. There are different stakeholder perceptions and needs. We need to cater to these expectations as per their demands and preferences. These expectations directly reflect in the business success. However, they are always challenging and require proper strategic plans to meet them carefully. This article can help you understand the foundation of those strategies by mentioning five strategies to boost stakeholder relationships.
Several stakeholders strive towards the success of a business, but you might never see them in usual operations. There are numerous stakeholders like suppliers, freight forwarders, and logistics partners that work in the background. So, it is always an excellent option to meet them in person and listen to their valuable input. You can invite them to The Executive Centre for corporate events and have a companywide get-together. It motivates them and instills a sense of belongingness toward the organization.
Several issues might not reach the organization despite an active HR. You get to know these issues only in first-hand interaction with the relevant stakeholder. Then, you can resolve them and increase stakeholder satisfaction with the corporate workers. Moreover, you also get a chance to identify possible loopholes in operational strategy. This interaction can generate valuable insights about better alternatives as these stakeholders are on the actual field grounds of the business. They can provide better intel than anyone else. Therefore, the benefits of meeting them in person are limitless.
Identify Key Stakeholders
The biggest problem most businesses face while managing stakeholder relationships is focusing on the wrong ones. They end up investing immense efforts on stakeholders that are not important for business growth. That has a lower lifetime value for the overall business. You might have been wasting your time with the wrong customer segment the entire time. Therefore, the very initial step to developing a solid stakeholder relationship is to identify the right stakeholders.
You can analyze the market and track different trends to reach the right stakeholders. You can also conduct a detailed operational analysis to identify which stakeholders are more critical for smooth business operations. Once you have listed all, you can funnel your efforts toward these stakeholders only. It will eventually have a trickledown effect, and almost all other stakeholders will be happy as well. That is how you will be able to optimize business efforts with maximum return on investment.
Develop a balanced reactive and proactive approach
Dealing with stakeholders is challenging because of the ever-changing business environment. Just as business requirements change with time, stakeholder preferences fluctuate as well. Now the key to effective stakeholder relationship management is in devising a balanced approach. Sometimes you need to be reactive and react to changing stakeholder preferences. Whereas, sometimes the viable strategy is in being proactive and reading the market dynamics promptly.
Customers are the most crucial stakeholder for any business as they drive the entire business machinery. But, they’re also the ones with the most variability and are most prone to evolving market dynamics. A slight change in the market can initiate a shift in customer perception and preference. Therefore, in most cases, you must have a proactive approach while dealing with this stakeholder. You should develop an eye to forecast market moves and adjust your customer strategy accordingly.
Build a Trustworthy Relationship
It seems pretty basic and straightforward but is among the most difficult to achieve among business stakeholders. Developing trust takes the longest test of time. It is only with time that stakeholders build trust among each other and in the organization. So, you must deliver what you promised. A single bad experience can spoil a year’s long relationship. Once lost, it isn’t easy to regain trustworthy stakeholders. It then creates hurdles in the smooth operations of the business and disturbs production schedules.
You would never want to lose out on your trustworthy stakeholder. It retakes a whole cycle of time to rebuild similar relations with other stakeholders. It is mainly because the switching cost between key business partners is very high. It is not just a matter of switching between alternatives but developing a new infrastructure for new stakeholders. It takes time, money, and effort. You need to dedicate resources and allocate organizational efforts to reinstate similar stakeholder relationships.
Whether it’s a project or any financial matter, you should keep things transparent where stakeholders are involved. You should take them on board before making any vital decision as they should not feel left out. It is essential to have their opinion valued before making strategic business decisions. It also develops trust, and you have better chances of gaining their confidence in critical decisions in the future.
Maintaining business transparency with relevant stakeholders decreases the chances of unilateral loss. Moreover, you also gain long-term support for risky business investments. Taking risks is always crucial for a business. Suppose you have stakeholders supporting you on your decisions. In that case, it reduces the chances of shock and allows the risk to turn out in your favor. It is mainly because now every stakeholder is collectively working to make the decision a success.
Business is all about stakeholder management. You can never run a business entirely on your own as it is always a collective effort. However, it is not always easy to build the necessary synergy among all these stakeholders. You can achieve it using the above-discussed strategies. Still, they are not limited to these tactics. It all depends on what suits your business model.