of communication it is probably a more fast-moving process.
Feedback from team briefings often fails to be effective because the information takes too long to percolate back up the chain, and the urgency to act and remedy issues dissipates or, at best, the actions appear ponderous.
Stakeholder communication and the four pillars of communication
Like every other communication activity, managing relationships with stakeholders can be enhanced greatly by:
䊉 clarity of purpose
䊉 appropriate communication behaviours by top management
䊉 building trusting interfaces
䊉 effective processes for sharing information.
In practical terms, the organization needs to invest significant effort in listening to stakeholders, understanding their goals and attempting wherever possible to explain the organization’s objectives against that background. One common example concerns corporate investment in community involvement. For example, in a special anniversary year the UK retailer WH Smith promised staff that they would match pound for pound the funds raised by the staff in support of a project by the charity of the staff’s choice.
Even where there is little or no opportunity for alignment of objectives, there may be room for some alignment of values. If that, too, is not possible, then the company can at least earn respect for being open and honest about what it aims to achieve and why. The clearer you are about your motives and objectives, the less likely people will be to ascribe less worthy or less reputable ones to you!
Top management’s role here is vital. In a recent case, the CEO and another top team member of Consignia, the UK state-owned postal service were awarded a pay increase at the same time the organization was negotiating drastic cuts in the workforce. The pay rises were more than most individual employees earned in total. Only swift action by the executives concerned, in foregoing their increases, avoided severe damage to the organization’s reputation, not just among employees, but among customers, who had also been informed that their second daily post could be cut.
The lives top managers lead and the values they demonstrate are critical elements in managing corporate reputation with stakeholders. How can you portray a company as environmen- tally concerned, if its leaders drive gas-guzzling cars, for example? How can the company claim to be socially aware if all its top team are from one, dominant social group?
The most important behaviours the top team can demonstrate, however, are a genuine willingness to listen to and a desire to understand each of the key stakeholder audiences. With mutual respect comes the opportunity to disagree cordially; to engage in dialogue not conflict.
This, too, is the core of building trusting interfaces with stakeholders. Without continuous dialogue, there is no trust. It also helps, however, to build trust through association; that is, to ensure that groups with whom the organization does have a strong bond of trust should be encouraged and assisted to talk to
those who are more suspicious. The first instinct of managers is often that this is a highly dangerous thing to do. What if those with negative attitudes influence the positives? Yet, as we have already discussed, it is getting easier and easier for stakeholders to communicate with each other and for people to be members of several stakeholder groups with different interests and perspectives.
Those few companies, which have tried to bring together different stakeholder groups in a mutual ‘learning community’
have normally found the approach to be highly beneficial, both in terms of increasing their own sensitivity to issues and building understanding among stakeholders. For example, see the Shell case study at the end of this chapter.
The employees’ role in such dialogue is pivotal. As a young journalist, one of the authors had a habit of getting ‘lost’ on organized press visits. Finding opportunities to listen unsu- pervised to ordinary employees frequently put the story being promoted by the company into a different perspective. Similarly, an experienced analyst in London’s financial centre explains:
‘When I hear things from the CEO, I discount it. When I receive the same message from employees as well, I’m far more impressed.’ If a company is, for example, going through a major culture change and/or restructuring, inviting employees to the annual general meeting provides an opportunity for investors large and small to hear informally what is happening on the ground. Even if there are problems, the greater alignment of message between the top and the rank and file, the more believable the business message will be.
The consequences of not achieving trust with the internal stakeholders in general are dealt with in other chapters. With regard to the business’s reputation with other stakeholders, however, they are more severe than companies typically acknowledge. Every interaction between a supplier, customer, member of the press, or financial intermediary and the employ- ees either reinforces or undermines the brand personality top management wants to project and the credibility of the business and its leaders in terms of future delivery on promises.
Cumulatively, these many small encounters have a substantial impact on every strategically critical aspect of the company’
operations.
Openness of information is also a key factor in developing partnerships with stakeholders. We can see the underlying problem in the frequently confusing attempts by western democracies to steer a path between freedom of information and official secrecy. No sooner is there a legislative or procedural move to open up more official documentation and process to
public scrutiny, than it is countered by new restrictions on anything that might be embarrassing to the government of the day. The intellectual desire to be open is frequently overcome by the emotional need for security and control of the environment.
Information management becomes in large part a process of
‘official’ leaks with a positive spin, countered by ‘unofficial’
leaks, which present a less positive picture.
True openness of information starts from the premises that:
䊉 very little information truly needs to be kept secret. Informa- tion, which is used against the company, tends in most cases to be only a part of a bigger picture. The more information available, and the more clearly it is related to the big picture, the more difficult for it to be misused
䊉 sharing information, even if it has been very expensive to gather, is usually better than closeting it, because it results in a return flow of ideas, critiques and other reciprocal contributions
䊉 information that people worry about (for example, personal files kept on them) becomes of marginal interest once they know they can inspect it. (When US data privacy laws first began to bite, some companies invested heavily in resources to deal with floods of enquiries from employees, who wanted to review the records held on them. Very, very few people bothered.) Secrecy creates suspicion
䊉 ease of access makes people more selective about what information they seek
䊉 employees can usually be trusted with information of high sensitivity. (When British Aerospace’s Military Aircraft Divi- sion published its detailed business plan to all employees, there were fears that it would be leaked widely. The opposite was the case – employees (even those who were made redundant not long after) showed remarkable common sense and loyalty, as a result of the trust placed in them.)
䊉 secrecy encourages malpractice. There is a clear correlation between ‘corporate deviance’ (behaviours such as operating a cartel or burying information about product safety) and the existence of a culture of secrecy.
When considering how to build openness with stakeholders, the internal communicator should consider the following:
䊉 To what extent can internally focused publications be circu- lated to other audiences, such as the City, or the press? (If they can be left in reception for visitors to read, there’s not much point in keeping them secret!)
䊉 What is the boundary between information available on the Internet and the company intranet? While security reasons will usually prevent full open access to the intranet, much of the information on one can readily be transferred to the other.
䊉 Are we prepared to establish hyperlinks between our web site and those of organizations, which represent other stakeholder interests? (For example, a pharmaceutical company might direct web enquiries for information to the sites of a medical charity or patient support group which has a useful library.)
䊉 Can we instigate and support conferences and symposia, where the views expressed may be very different to those the company wishes to promote?
䊉 Are we willing to open up in-company events to outsiders.
(For example, IBM has for years financed places at training events for participants from charities.)
䊉 Can we open up internal discussion networks to external stakeholders, to inject a different set of views and to expose them to the views of our employees?
The key to success here is an attitude shift that welcomes the sharing of information and eschews the opportunity to manip- ulate it. Here, perhaps, is one of the core distinctions between internal communication and public relations. Whereas the latter is primarily about selective sharing, the former is (or should be) more about the encouragement of open sharing.
Summary
Building strong and positive relationships with stakeholders outside the company depends heavily upon the quality of relationships with internal stakeholders. Companies must recog- nize that the boundaries between these two sets of audiences are becoming increasingly porous. Establishing policies and practices that use open communication to build partnerships with stake- holders should be a priority within the business planning process.