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.