Kuldip Maity

In one of the reports on recent trends in communications that I was reading, it was said that employees are one of the biggest influencers when it came to influencer marketing. We presume that good communications can market our products and services. I wondered how employees can be influencers. Will the audience trust them, as they have a bias? But then it dawned on me that influencers are also excellent resources for corporate image building.

Being an internal ambassador helps employees to identify the organization’s ability to create and maintain value, and also the role they play in the process. An inclusive organization would attribute its successes to the team while trying to find ways to plug gaps in performance without calling out individuals. Any employee who tells the world about this would be a major influencer for the talent acquisition of the company.

For this, the leaders of the organizations need to regularly check if the different teams have seamless communication within themselves and across teams. A seamless and coherent approach toward strategy can be achieved only through better articulation, collaboration and execution of the broader organization strategy broken down into silos.

But we have all heard several such prescriptive solutions regularly. Why then do some organizations fare better than others? In my opinion, it is all about how the strategy is communicated and the governance structure implemented so that there is no micro-management. As a key stakeholder group, our employees also want the elbow space to make minor adjustments to their processes to deliver the best results. Communication will help build a clear business model along with the perceived risks and challenges.

A well-defined stakeholder management process for employees will help in building a more resilient organization in the face of challenges. Employees will better understand their roles and purpose, which will help in driving up morale and contributing to higher productivity and performance. After all, employees hold a major responsibility for how the business strategy leads to value creation over time. Their sense of ownership also helps build effective leadership that ensures better management of the relationship of the core internal stakeholders.

I am yet to come across an organization with a high employee retention rate and a well-defined progression policy that is not delivering good financial results. Every mature investor would like to engage with such companies, as it will help contribute to long-term stability.

In my earlier blog, I mentioned that managing relationships is a mandatory requirement for any business. However, the difference lies in the way this is perceived. An organization can look at stakeholder relationships as a task or can maintain them with gratitude. It is needless to point out the one I recommend.

Before I get into how we may maintain relationships with individual groups of stakeholders, we need to find out the common elements between them and create a horizontal communication and relationship management plan that cuts across all of them. This may not be as easy as it sounds, as the interests of one stakeholder group might be in direct contradiction to that of the other. For example, though profitability is the prime goal of every organization, and in trying times the most tempting business decision that would keep the investors happy might be to cut down on the optional workforce, this is unlikely to go down well with another key stakeholder group, viz. the employees. How we manage the two critical stakeholders and find a common group is what business decision-making is all about.

The next step would be to bucket stakeholders into ‘internal’ and ‘external’. This would decide the level of information that we share with the stakeholder. It is critical to use the right judgment here. To cite an example, I would like to talk about the investors. Many feel that investors are external stakeholders. The information shared with them is often massaged to tone down any bad news. Often stuck only to financial updates, the quality of the information they are sharing is often lacklustre or incomplete, making the investor feel disinvested in the company.

In my opinion, this is not the best approach we can take. Investors are very much a group of ‘internal’ stakeholders. Though they might have diverse portfolios that keep them focused on financial management, away from the day-to-day operations of the organization, they would very much want to know beyond mere financial updates. In a sense, it helps the company as well, as including investors as an internal entity would mean that they are already up to speed on the business dynamics and do not need much convincing if extra support is required. Furthermore, while investors are busy people, let us not hesitate to share non-critical but important updates with them. This is the best way to show them that we consider them as a member of our team, thus increasing the bonding. Let us not forget that investors have diverse companies in their portfolios and many issues that an organization is facing can be resolved through the connections that investors enjoy.

The last, but most important point that I want to mention is it is a blunder to withhold information or provide wrong information to any stakeholder, especially the investors. Not only is this unethical, but you also cannot keep it buried for long and the mistrust it will breed is not worth it.

Another major aspect that businesses heavily depend upon is ‘relationships’.

When we talk of relationships, the discussions are primarily oriented toward customer relations. But any business executive will acknowledge that the term goes much beyond. Stakeholder relationship management covers the entire 360 degrees, involving investors, administration, employees, customers, and suppliers. It is important to ensure that relations with all work as strong pillars over the foundation of the business vision. Only then can growth be seamless and uninterrupted.

While it may be difficult to follow it by the book, and my view is that it should not be as it may look staged, it is normally helpful to have a documented process for relationship management of all stakeholders. Not only does it work as a reminder for keeping in touch with them, but it also ensures that no critical update is missed when updating the respective stakeholder. The engagement plan, updated schedule, and reporting structure play a crucial role in this.

I purposefully left out one key category of stakeholder that is gaining a lot of prominence in recent times. We have started to realize that businesses cannot work in isolation and the communities they interact with are also to be regarded as a key category of stakeholders. The reason for leaving this category out in my initial discussion is the overlap that it has with the other categories. This is because communities can be of various forms including customers and the society around us. In a few of my earlier blogs, I have touched upon the need to keep the community engaged with business operations.

In line with its importance, every business needs to have well-defined KPIs or Key Performance Indicators for this. But as with the others, measurement of this qualitative factor is still a challenge for many businesses. Till we find better ways of measuring the KPIs we may rely on the age-old but statistically validated method of survey. For each category, we need to run regular feedback surveys to understand their perceptions. One positive aspect of this method is the fact that irrespective of the type of feedback we get, getting one itself shows that there is a relationship to be nurtured. Even if do not get feedback, surveys also help is reminding the stakeholder that we acknowledge them and value their feedback. This is a very positive note.

As we get matured in the digital aspects of communication, the measurement of relationships will also be easier. A few aspects like calculating the Share of Voice, Engagement levels, and Sentiment Analysis are already getting widely used by corporates.

The sheer importance and diverse categories of stakeholder relationships call for another blog on the topic. Planning to write another piece on it. Keep following…

The intellectual capital of an organization is the qualitative aspects of the expertise and knowledge contained in it, which helps in delivering a competitive advantage. While many have the impression that intellectual capital relates to only R&D and the patents that the organization holds (or has filed), R&D is only one section of intellectual capital.

Humans have a role to play in intellectual capital as well. The skills and competencies that get developed over time and through training are of immense value to the organization and are a key differentiator for any business. While in modern times it might be over-ambitious to accept that every fresher joining from college would also retire from the same company, any investor would look at the retention age and the average tenure of work.

Another aspect of intellectual capital may be the knowledge that an organization will have concerning its suppliers, customers, brand relations, and other interactions. This grows over time and normally should be maintained at the organizational level. For this reason, we have a school of thought that no member of the organization should be kept in the same role for a very long time. While it is tempting to have the same person in a customer relationship role, this school maintains that it is not advisable, as the relationship shifts from the organizational level to the personal level.

Lastly, we have the organization-level intellectual capital such as the management systems, policies, processes, and all that is in the knowledge base acquired during the tenure of the operation. The patents and copyrights that the organization acquires or files for would also fall under this category. In a nutshell, this is the knowledge embedded in organizational structures and processes.

These forms of intellectual capital need to be protected with the utmost care. While protection of data privacy through technology implementation is common and important, investors would also be eager to know if the other information, especially the knowledge capital such as patents, special and innovative technology, brand secrets, copyright, and other business secrets are also protected through industry-compliant standards.

The more intellectual capital an organization holds the more lucrative it is for the organization. But as with the other capital, that we have been discussing, quantifying them through a common currency may be extremely difficult and needs a subject matter expert for proper evaluation.

Is it an exact science? I would say, far from it.