By David Holt
Large companies spend millions of dollars every year coordinating effective stakeholder management campaigns and banking relationship capital. Cultivating the extensive network of stakeholders needed to help mitigate external risks, protect core markets, and develop new opportunities is a required practice for large organizations operating in many states or countries.
But quality stakeholder management is not just important for the Fortune 500’s of the world. It’s also a tremendously effective tool for the rest of us, particularly startups and established small businesses. While smaller operations may not need to mitigate the risk associated with regulatory actions or specific pieces of legislation, (although they increasingly are) the creation of relationship capital can pay dividends when it comes time to raise startup or growth money, find partners, rebuild an office space, or grow sales. Relationship capital may not be a line item on a balance sheet, but the lack of it can be a big liability when/if the need arises.
For smaller operations, the creation of relationship capital is about building long-term trusting relationships with key influencers in the community that could affect the future of your business. This goes beyond traditional lobbying. Small businesses need to build trust and mutual understanding with city and county officials, members of the press, bloggers, other business owners, and community leaders. These relationships will help businesses communicate the value of their product or service, their place in the community and their stake in local issues.
Take for instance a business owner that wants to obtain a zoning variance to expand their retail operation. Viewed narrowly, relationship capital and the mutual understanding of the business it creates will help sway city officials to approve the variance when the time comes. It will also ensure local residents, bloggers, and fellow business owners will support the variance at public comment forums and in the press.
Building relationship capital is a two-way street. In addition to creating an understanding of one’s business, leaders should seek to cultivate a two-way conversation between all parties involved in a particular issue or action. This is an important business function, and while consultancies may help create this core competency, there are several easy ways for the small business owner to implement an effective campaign to grow relationship capital.
Dedicate your time
Many businesses might feel this kind of outreach is too obvious to dedicate focused attention to. This school of thought creates roadblocks to formalizing and implementing an outreach strategy. Take some time to think about this core function, commit your time and effort, and incorporate it into your daily or monthly goals.
Determine your priorities
Once you commit to a focused campaign, create a list of priorities and issues you would like to build relationship capital around. It may be an internal initiative like the expansion of the operation, the search for investors or the desire to grow sales. It may be to inoculate your business from perceived negatives like layoffs or relocation or to defend against a competitor. Then lay out a specific goal related to each priority. Creating these priorities and outcomes will keep the campaign focused and help identify targeted and relevant potential stakeholders.
Execute the strategy
Determine key messages for the individual priorities and targeted stakeholders that were identified. Individual stakeholders may require the tailoring of a message, but always use the priority issue as a starting point. Depending on the situation, the key priority, the targeted stakeholder, etc., the best approach to deliver the messages may be different. For the business owner seeking the zoning variance mentioned above, a good way to initiate the campaign would be to host a community meeting with identified stakeholders to discuss plans and communicate the value the variance would bring to the community. Other times a press release, a face-to-face meeting, an official briefing, or dinner may be the best route.
Even the smallest companies can benefit from implementing a stakeholder management plan and building relationship capital. With a specific focus on drafting and implementing a plan, small businesses can reap the same benefits that major multinationals do for relatively low costs. More than dollars and cents, it takes a dedicated and focused effort to build relationships with key influencers to grow your business, manage risk, and reach your goals.
David Holt is President of Consumer Energy Alliance, and HBW Resources, a public affairs consultancy based in Houston.