How poor reputations develop
Organizations with poorer reputations generally exhibit at least one of three common characteristics: they’re too busy, too bossy or too self-interested.
1. Too busy
These organizations don’t seem to have time for all that stakeholder stuff. They operate in a dynamic sector, face many competing demands and find themselves too busy to engage with stakeholders.
They display a strong preference for doing things their way, even in areas that require collaboration to make sure a solution meets the needs of all. When they are dealing with stakeholders, it is usually after an “event” that includes patching up differences with a hurt party, often not for the first time.
Their stakeholder relationships are punctuated with damaging events, disappointments and an ongoing loss of trust.
These organizations tend to be lacking in talented leaders and are generally less strategic in their leadership style. And they tend to spend a lot of time fighting fires.
Stakeholders are likely to be viewed as another problem, rather than as a source of problem solving.
One company that found out the hard way about the risks of being too busy for stakeholders was a paper manufacturer. It found itself besieged by a number of pressing issues: digital disruption, the need for capital investment to remain cost competitive, and growing demands from customers for products with stronger environmental credentials.
With the company focused on these urgent concerns, its conversations with forest environmental groups suffered. This led to a string of unresolved issues, including a loss of trust in the communities from which it sourced its raw materials. This ultimately resulted in reduced access to the forests themselves.
2. Too bossy
These organizations are often large and powerful and are absorbed in their own power, knowledge and goals.
They tend to offer only token engagement with stakeholders and allow little time for listening. Their communications with stakeholders are largely one-way and predetermined.
Internally, they consider themselves to be professional, hardworking experts. But, externally, they are seen as disconnected, narrow-minded and lacking in humility, because they fail to tap into the capabilities of their stakeholders.
Organizations that are defensive, and that avoid stakeholders, usually underestimate the productive role stakeholders can play. Their stakeholders would tell them that true leaders take advice: they never have the full story.
These organizations may well be considered a force in their sector, but they are usually disconnected from that sector. This lack of respect is not lost on their stakeholders, who often prefer sector leaders to recognize that they are in a privileged position and lead the pack as responsible and formidable members of the community.
One organization that fell into this trap was a public health body whose sense of its own importance grew after a decade of success. Its earliest campaign had won the agency worldwide recognition for its impact and change of behavior.
But when the agency broadened the range of health issues it addressed, it collided with other incumbent health bodies and would only collaborate on its own terms. This eventually undermined its own credibility and negatively impacted the stakeholder support it received.