Managing stakeholder relationships

During the current economic downturn, companies in the region may need to shift their focus and nurture valuable stakeholder relationships. When times get difficult, stakeholders can take on a more critical role supporting the business.

Crucially, it is important to keep shareholders and lenders informed about the current position of the business. This can be achieved by open and honest communication. Where possible, business managers should talk to stakeholders in a positive manner about how they intend to navigate the downturn. This would involve looking at the threats and opportunities that the current economic conditions present. Stakeholders will also want to see that the company is already taking action to address any underlying weaknesses in its structure or operations.

It is especially important to look after customers during a downturn – after all they may be looking to buy more cheaply. Where possible, business managers should look for ways to reward customers for their loyalty. This could involve, for example, introducing a key account management programme so it is possible to identify the customers that deliver most value to the company.

When money is tight, it may become difficult for business managers to reward their employees. An alternative option might be to consider innovative ways to show their appreciation by reviewing executive benefits or introducing new motivational schemes or practices.

Businesses should not stop investing in marketing either. During the last recession, the highest performing brands were those that substantially increased their advertising budgets.

By seeking stakeholder views at an early stage, companies can address their concerns with practical measures and considered strategies. Local companies will then be better placed to retain or even strengthen their market share during the downturn.

Contact details
Email: Rob Hunt
Tel: +44 (0)121 265 5660