Stakeholder Relationships: The Make-or-Break Factor in Business Success
We’ve seen this time and time again, in the fast-paced world of business, success hinges not only on strategic decision-making and cutting-edge innovations but also on the strength of stakeholder relationships. These relationships, built on trust, collaboration, and effective communication, can make, or break the fate of any organisation.
Yet, we are not adequately equipping our teams and providing the time necessary for them to hone their human skills for better outcomes.
Stakeholder relationships, encompassing both internal and external networks, have a profound impact on business success. Consider the following recent research:
• Improved Financial Performance: A study by Deloitte reveals that companies with strong stakeholder relationships consistently outperform their peers financially. These businesses demonstrate a 7% higher annualized total return to shareholders, highlighting the positive correlation between collaboration and financial success.
• Enhanced Reputation and Brand Loyalty: As Richard Branson aptly said, "Your brand name is only as good as your reputation." Building strong relationships with stakeholders can bolster a company's reputation, leading to increased trust, brand loyalty, and positive word-of-mouth referrals.
• Innovation and Decision-Making: Collaboration with stakeholders brings diverse perspectives to the table, fostering innovation and enabling better decision-making. By actively engaging with stakeholders, businesses can tap into valuable insights and generate creative solutions to complex challenges.
The Dual Perspective: While the benefits of stakeholder relationships are clear, it's important to acknowledge the challenges involved.
Here are two key considerations:
• Time and Resource Investment: Building and nurturing stakeholder relationships require time, effort, and resources. In the current business environment, organisations often face competing priorities and demanding workloads making it challenging to allocate sufficient attention to stakeholder engagement.
• Potential Conflict and Disagreements: Collaboration with stakeholders can lead to differing opinions and conflicts. Hence the need for effective conflict resolution and communication skills.
These can transform disagreements into opportunities for growth and mutual understanding.
Investing in Human Skills for Better Outcomes:
To harness the full potential of stakeholder relationships, we believe organisations must invest in honing their human skills. These skills, often referred to as soft skills, social polish, or emotional intelligence, play a pivotal role in fostering effective collaboration.
Here are a few areas to focus on:
1. Active Listening and Empathy: Actively listening and empathising with stakeholder’s perspectives fosters trust, understanding, and stronger connections. This skill enables businesses to address stakeholders' needs and concerns effectively, leading to more fruitful collaborations.
2. Effective Communication: Clear and open communication is essential for building strong stakeholder relationships, leading to improved engagement.
3. Conflict Resolution: Conflict is inevitable in any relationship, but the ability to navigate and resolve conflicts constructively is crucial. By developing conflict resolution and relationship management skills, you can turn conflicts into opportunities for growth, ensuring stakeholders feel heard, valued, and satisfied with the outcomes.
So, let us embrace the power of stakeholder relationships and equip ourselves with the human skills necessary to thrive in the ever-evolving business world.
Happy netships (networking relationships),
Julia Palmer a respected Relational Strategist and Chief Executive of Relatus, helping you develop your relational capabilities to give you the human advantage.