Module 2 Introduction. Who Are Your Stakeholders?

Effectiveness and high-stakes leadership depends largely on a leader’s ability to understand and appreciate the perspectives of various organizational stakeholders. In order to engage these stakeholders effectively during good times or in the midst of an organizational challenge, leaders should have a very good sense of the value each stakeholder population derives from their relationship with the organization. Well, this should make intuitive sense to any business leader, the practical reality is that organizations don’t typically excel at this practice. Even when they do, the relationships with individual stakeholder groups tend to reside in specific functions. Sales and marketing tend to own the customer group. HR tends to own the employee group. Finance tends to own the investor group.

Government affairs owns the regulator group and so on. In a high-stakes leadership scenario, it’s critical that enterprise leaders are able to effectively engage all stakeholder groups in ways that recognize how each stakeholder’s value proposition is being threatened by the evolving crisis or disruption. Not surprisingly, the leadership teams who have demonstrated an ability to do this successfully, didn’t have to waste time in the midst of a crisis to figure out which stakeholder groups were interested in what, they already had this information.

They’d taken the time to learn about these stakeholders well before a critical event, and established relationships with key members of these groups, and had built a foundation of dialogue and trust that would serve them in good times and in bad. Now perhaps you’re thinking, okay. As I think about my company, our chief marketing officer knows our customers, our chief human resource officer knows our people, our chief financial officer knows our investors, our government affairs officer knows our regulators, our PR team knows the media, our entire C-suite knows the competition. What else is there to know? Let’s just get all these people together when we have a crisis and let them manage it.

This isn’t flawed thinking, but it does beg a few questions about the logistics of leading a company through a crisis. What will this team do? How will they work together? Which stakeholder groups will receive what kind of care and information? Who keeps the company running, assuming that the company continues to operate while managing the crisis, if the entire C-suite is focused on all these stakeholders and not the company’s core business? The answers to all of these questions will be explored throughout this course. For now, suffice it to say that rarely does the C-suite dedicate their entire bandwidth to managing a crisis. It does happen on occasion, for example, the financial institutions during the US sub-prime mortgage crisis of 2008.

But most of the time, the C-suite assigns a team of enterprise leaders to manage the effort. Will they know everything they need to know about different stakeholder groups? Will they know how to organize and execute the crisis management plan? Not if they’re unprepared for their new roles. This module is about understanding the needs and interests of typical stakeholder groups for just about any organization. Not all of these groups will necessarily have a significant interest in your company. But generally speaking, an organizational leader should be considering each of these, both to run a thriving business and do effectively manage through crisis.

As an illustrative example for our exploration of stakeholder interest throughout this module, we’ll be using a very popular, wonderfully entertaining for you, an incredibly informative crisis that occurred at JetBlue Airways while I was a senior executive at the company. This case involves a major operational meltdown that JetBlue experienced in February of 2007, seven years after their commencement of operations. What makes this case particularly useful for an exploration of high-stakes leadership is that all of the typical stakeholder groups were impacted to some extent by JetBlue’s spectacular operational failure.

In the activities that follow, you’ll learn about the interests of different stakeholder groups, both through the lens of the executive team at JetBlue and from the perspective of researchers who have dedicated years to understanding the relationships between organizations and the groups conducting business with them. By the end of this module, you’ll have a very solid understanding of the value proposition sought by different stakeholder groups, and how to begin using this knowledge to develop your own approach to high-stakes leadership.