The Hollow Corporation9 years, 8 months ago
Businesses are still failing to take advantage of an increasingly diverse stakeholder environment, says Brendon Craigie.
Hollow corporations and organisations; that is, the ones who ignore their wider influencer communities are easy to spot. They are found in major trouble across media channels every day. With a low backing from their stakeholder communities, they have few resources or supporters to turn to when they get into difficulty.
BP became the poster child for a business in crisis, experiencing a 17% drop in market value in just one day following the disaster in the Gulf of Mexico. US food manufacturer Kraft’s takeover of much loved British chocolate brand Cadbury invoked stakeholder backlash when Kraft’s communications strategy overlooked significant portions of the Cadbury stakeholder network. These stories are not new but they are testament to the dangers of a communications strategy that is focussed on sales generation and brand exposure rather than reputational strengthening.
Critically, businesses are still failing to maximise opportunities to engage with and influence a stakeholder community that extends actively beyond the traditional view of shareholders, customers and the media.
The increasingly diverse communications environment
With the rise of the internet, social media and the ease of geographical dispersion, a business’ stakeholders have expanded from geographically stable shareholder, customer and media groups to an international selection of interest groups, governments, activists, forums, bloggers, and the list goes on.
The reality is that this growing number of different stakeholders impacts the long-term reputation and brand of a company. An international study we announced in 2010 found that only 18% of consumers surveyed choose to ignore recommendations and information coming via their social networks and online acquaintances. This leaves a whopping 82% of respondents who are committed to investigating the information, acting on it or passing it on to another acquaintance.
Ignoring the rising influence of new, non-traditional stakeholders puts businesses in a vulnerable position, not least in times of crisis when stakeholder sentiment is most heavily tested. Instead, businesses must head the pack and position their organisations with other key influencers within the stakeholder network.
Who is influencing the perception of my business?
It has become increasingly difficult to harvest and maintain meaningful relationships with people most important to your organisation’s success; largely because the group itself is so exhaustive, dense and difficult to navigate.
With globalisation, the digital world and many more developments impacting the diversity and complexity of the stakeholder environment, having an effective method for stakeholder mapping has become ever more relevant. Stakeholder mapping provides organisations with the ability to both identify and develop worthwhile relationships with influencers that extend beyond the media.
Communications professionals must employ a systematic review process that identifies and assesses the importance of key people, groups of people, or institutions that may significantly influence the perception of the business.
It is possible to break down the entire influencer community into four groups, embracing shareholders, customers, the media and new groups such as online communities:
• Manage: Stakeholders who are highly visible and highly important. Their happiness is key to the organisation.
• Acknowledge: Stakeholders who are highly visible but less important. The organisation should care about them on a regular basis.
• Monitor: Stakeholders who fall within the lower left quartile are not important and not very visible. Monitoring their activities is however important should an individual or group ‘break out’ and potentially become a problem to the organisation.
• Involve: Stakeholders that are of high importance but are not very visible should be actively engaged by the organisation. As they are not very visible you don’t know what they are up to, which could become a problem!
The key to this entire process is to consider carefully the company’s values and objectives and who has a stake against each of these. Once plotted on an influencer map it is possible to focus on how to effectively channel company resources to leverage each relationship. It makes no business sense to try and interact with every stakeholder to the same degree, which is where the four categories of interaction become so important; to ensure the direction of efforts and costs towards the most beneficial portions of the market.
The value in expanding communications reach
BP’s reported $3.6 million Google Adwords spend in an attempt to manage its online sentiment is a good example of a company’s failure to understand that reputation is no longer about simply disseminating your message.
It is unrealistic to believe a company can always proactively push messages that promote the company in a positive light. Embracing both the proactive and reactive nature of online communications is an absolute must when engaging a broader influencer community.
The business world as we know it has transformed dramatically over the past 20 years; aided largely by the growth of the digital world. Everyone and anyone can now have a public opinion on a business and its actions.
PR campaigns today must focus on ensuring that other influencers are disseminating your message to even more key influencers. This comes through interaction and mutual respect alone and makes the influencer mapping process invaluable.
Although this seems challenging it represents an excellent opportunity for those businesses willing to grab the bull by the horns and invest in stakeholder management. With a rough 83.5% of the stakeholder network open to conversion, now is the optimal time for businesses to map their network and outreach as appropriate.
The expansion of social media and the new era of mass engagement means that brands must be active in the digital world. Trust is fundamental to business success, and should brands encounter issues, as most do along the way, your customers in the social media space will be looking for your response. At best, a failure to listen and engage in the social media world will be seen to be old fashioned and out of touch, but at worst this failure to engage will be interpreted as corporate arrogance with corrosive consequences for your brand.
Brendon Craigie is a co-founder of Tyto a new European PR agency focused on the colliding worlds of technology, science and innovation.mail the author
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