Revisiting Stakeholder Perspectives and Value Propositions

Let’s take a few moments and return to the stakeholders that you identified earlier for your organization. Given what you have just heard about the requirement for crisis leaders to engage different audiences, in different ways, with different information, how should you be thinking about the information your different stakeholders might need during a crisis?

As a reminder of the relationships that high stakes leaders form with their customers – and the fact that the relationship is not simply one of unemotional value exchange – here is how author and stakeholder theory researcher Ed Freeman describes our relationships with stakeholders:

“To create value for stakeholders, executives and entrepreneurs must see business as fully situated in the realm of humanity. Businesses are human institutions populated by real live complex human beings. Stakeholders have names and faces and children. They are not mere placeholders for social roles. Most human beings are complicated. Most of us do what we do because we are self-interested and interested in others. Business works in part because of our urge to create things with others and for others. Working on a team, or creating a new product or delivery mechanism that makes customers’ lives better or happier or more pleasurable all can be contributing factors to why we go to work each day. And, this is not to deny the economic incentive of getting a pay check. The assumption of narrow self-interest is extremely limiting, and can be self-reinforcing— people can begin to act in a narrow self-interested way if they believe that is what is expected of them, as some of the scandals have shown. We need to be open to a more complex psychology— one any parent finds familiar as they have shepherded the growth and development of their children.”

So, we have relationships with our stakeholders not simply to extract economic value, but to make their lives better – to make their responsibilities more enjoyable. Interestingly, the Ross School of Business is known for its Center for Positive Organizations, an academic unit dedicated to business that enriches the lives of its stakeholders. If you’re interested in learning more about them, you can find information at this link.

Do you remember the value propositions that your stakeholders have with your organization?

Enterprise Leadership. This group has a unique set of responsibilities and, in exchange for their leadership, they extract a great deal of value from the enterprise. During a crisis, their own interests are impacted in many ways.

Employees. Their jobs and livelihoods are at stake in an organizational crisis. What do they want to know? When and how do they want to know it? During a crisis, high stakes leaders will have their full attention.

Customers. Customers and suppliers exchange resources for the products and services of the firm and in return receive the benefits of the products and services. These stakeholders will be expecting value in exchange for something of value that will be or may have already been exchanged for it. In a crisis, not only will their expected value be at risk, but perhaps even their half of the exchange that has already been delivered.

Investors. Owners or financiers (which is really a better term) clearly have a financial stake in the business in the form of stocks, bonds, and other currencies. They, of course, expect some kind of financial return from their investments. In a crisis, not only are they concerned about the current state of their investment, but also the long-term value of it.

Regulators. Governmental officials actually play a couple of different roles in their relationships with an organization, each of which will be threatened during a crisis. While all officials are elected or appointed to serve the interests of their constituents, some look after the interests of communities (e.g., mayors, governors, etc.), while others look after enterprise compliance (e.g., safety or legal officials). In a crisis, both versions of these regulators will have concerns and they will be looking for information to share with their constituencies.

Competitors. As we’ve established, this is an odd group to think of as a stakeholder. They are in many cases, however, impacted by the choices that a competing organization makes and the manner in which it manages a crisis situation.

Given this very short review of your stakeholders, what do your instincts tell you about the way you should be engaging them during a crisis? The crisis environment is going to create anxiety for each of these groups and, because of the differences in their value propositions, they have different interests and are looking for information that may well be unique to them. As a high stakes leader, you need to find ways to engage them – not as instruments of economic value, but as members of your organizational family.

What can you do, today, to gain a better understanding of what your stakeholders will want to hear during a crisis and to create plans to make sure that they get what they need when they need it?