Wednesday, May 18, 2011

Six Tips for Strengthening Stakeholder Relationships

First, by way of disclosure, assessing the strength of relationships and helping organizations improve them is one of the things I do for a living. That said ...

THE FUNCTION OF PR
PR practitioners have argued for as long as I can remember about what the actual function of PR is. Some say it is to generate publicity. Some, to generate awareness. Others cite behavioral goals, such as increasing sales, reducing employee turnover, or increasing stock price. There also is a camp that argues the real purpose of public relations is to help organizations build and manage effective relationships.
                                                                                                                                   
If you'd like to learn more about managing and strengthening stakeholder relationships, e-mail me at fanderson@forrestwanderson.com or call me at 415.513.5042.
                                                                                                                                   

A WAY TO MEASURE THE STRENGTH OF RELATIONSHIPS In 1999, Dr. James Grunig and Dr. Linda Hon published through IPR "Guidelines for Measuring Relationships in Public Relations." Grunig and Hon drew on literature exploring personal and business-based relationships as well as insights regarding how organizations and stakeholders can affect each other. They developed a list of six factors that collectively assess the state of a relationship between an organization and a stakeholder group. These are (definitions from Grunig and Hon):
  1. Control mutuality (think "mutual control") -- the degree to which parties agree on who has the rightful power to influence one another.
  2. Trust -- one party's level of confidence in and willingness to open one's self to the other party.
  3. Commitment -- The extent to which each party believes and feels that the relationship is worth spending energy to maintain and promote.
  4. Satisfaction -- The extent to which each party feels favorably toward the other because positive expectations about the relationship are reinforced.
  5. Exchange relationships -- In an exchange relationship, one party gives benefits to the other only because the other has provided benefits in the past or is expected to do so in the future.
  6. Communal relationships -- In a communal relationship, both parties provide benefits to the other because they are concerned for the welfare of the other -- even if they get nothing in return.
Grunig and Hon included in the paper a set of tested perceptual questions addressing each of the six factors above. Grunig and others have validated these questions. So, by measuring the strength of stakeholder perceptions of the organization on these six relationship factors, we can gauge the strength of a relationship between the organization and the stakeholder group.

Following are my tips on strengthening stakeholder relationships.


TIP 1: ASSESS THE STRENGTH OF THE RELATIONSHIP

Tip number one is to survey your stakeholder group using some variant of the questionnaire Grunig developed, so you know how weak or strong your relationship is and where it is weak or strong. For example, in one project I did, we learned the organization had excellent scores with all stakeholder groups on all but one of these six factors. So improving stakeholder relationships in that case was a matter of focusing on that one factor.
ORGANIZATIONAL BEHAVIOR AND COMMUNICATIONS
The remaining five tips have more to do with how organizations behave than strictly with communications.
However, if PR has played the border spanning role of identifying key stakeholder groups and where they stand on the issues that matter to them and has shared this information with management, PR will have made a great start toward helping the organization truly manage its stakeholder relationships and, ultimately, its reputation. PR can further enhance the organization's reputation by educating management on this model of relationship assessment, why it is important and how to measure progress.
Finally, one reason some organizations under perform on these factors is that the organization does not communicate to stakeholders what it is doing in relation to the factors. Most stakeholder groups are too large to deal with one on one, so organizations get input from representative members of these groups. But organizations should communicate to the entire stakeholder group its responses to the input. In addition, it usually makes sense to describe the process of inclusion the organization used to get the input, so stakeholders who were not personally involved know people like them were. This, clearly, is the responsibility of PR or Communications.

TIP 2: BUILD STAKEHOLDERS TRUST IN THE ORGANIZATION

  • Consistently treat stakeholders fairly.
  • Whenever your organization makes important decisions take stakeholder opinions into account and otherwise demonstrate concern for stakeholders.
  • Keep organizational promises.
  • Demonstrate competence by doing what you say you will do.
TIP 3: PAY ATTENTION AND RESPOND TO WHAT STAKEHOLDERS SAY AND DO
  • Demonstrate you believe stakeholder opinions are legitimate by responding to them.
  • Give stakeholders a say in the organization's decision-making process, especially in those areas that affect the stakeholder group.
TIP 4: DEMONSTRATE COMMITMENT TO STAKEHOLDERS
  • Show stakeholders that your organization wants to maintain a long-term relationship with them.
  • Engage stakeholders to build loyalty to your organization.
TIP 5: SATISFY STAKEHOLDERS
  • Identify and enhance the ways stakeholders benefit from their association with the organization.
  • Make interacting with the organization a "delightful" experience.
  • Make stakeholders feel they are important to the organization.
TIP 6: MOVE BEYOND AN EXCHANGE RELATIONSHIP TO A COMMUNAL RELATIONSHIPAs noted above, exchange relationships are those in which two parties in a relationship expect a benefit in return for a benefit -- tit for tat. These relationships are the basis of most for-profit businesses. That is, a customer expects a certain quality product in exchange for the money she spends, and the organization expects the money in return for the product. Employees expect pay, benefits and a sense of fulfillment and organizations expect work and engagement.

A communal relationship goes beyond that. One party in the relationship believes the other will give benefits with no expectation of a return. An example of this is corporate social responsibility programs, such as when a bank goes beyond the basic business exchange to "give back" to the community by supporting programs that benefit neighborhoods.
Some argue that this corporate giving is not really selfless in that the organization expects good will in return for the benefit it bestows on the community. And this may be. Nevertheless, when a stakeholder believes an organization helps people without expecting anything in return, the relationship is at a different level than if the stakeholder believes the organization only trades benefit for benefit.

PARTING THOUGHT
In closing, I'd like to re-emphasize the importance of assessing the strength of the relationship at the outset. That there are six factors to manage when building relationships is a great insight. But to manage we must be able to measure. This tells us not only where to focus our efforts but also whether we have succeeded.

17 comments:

preeti said...

Any affordable online marketing company stands on these steps . Thanks for the informative post.

Sabrina Garza said...

Thanks for this post, Forrest. Those tips that you mentioned will be a great help in strengthening relationships with the stakeholders. Anyway, what really got me is tip #3. This is, in my opinion, the most important among the six. It seems to me that following that one will allow us to do the rest and achieve our goal.

Sabrina Garza

Forrest W. Anderson said...

Thanks for your comment Sabrina.

Forrest W. Anderson said...
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Anonymous said...

What are the key things that one needs to consider when going to an interview for the post of the Manager: Stakeholders Relations?

Wanda Munoz said...

The main function of PR is not only to maintain a good company reputation, but also to build a harmonious trust relationship with the stake holders, also known as the public. It is one way of strengthening the foundation of a company's business structure.

#Wanda@GillottCommunications.WordPress.com

John Michle said...

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Sara Welsh said...

Stakeholders can play a major part in the success of a business. Having a PR firm that can manage a good public relation is crucial. Being able to make the stakeholders feel like they're well informed is very important.

Sara Welsh | http://www.etcadvertising.com/public-relations/

Elizabeth J. Neal said...
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Jenelia Dcoza said...
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Lillian Sala said...

Thanks for the informative post..it is indeed an eye opener to the importance of PR to an organization

Charli Smith said...
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