Module 3 Communicating with Business Stakeholders BUS306

Welcome to Module 3 Communicating with Business Stakeholders

This module covers:

• Understanding the benefits of communicating with stakeholders


• Identifying and communicating to your different audiences


• Establishing clear communication objectives


• Preparing your message


• Using the best medium to communicate


• Follow-up

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  Understanding the Benefits of Communicating with Stakeholders

  
  


• What are Stakeholders and Why are They Important?


• The term used to categorise the people that influence your business is stakeholders. Essentially, stakeholders are people or groups of people who have an interest, or stake, in your business(Lumen Boundless Management, n.d.). There are two further labels within the stakeholder category - internal and external stakeholders.


• Internal stakeholders are the individuals or groups who are directly or financially involved in the business's operations. On the other hand, external stakeholders are the people who may not be directly involved in the business but will be affected by the business's decisions.


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  Stakeholder Theory

  
  


• The importance and value of stakeholders given by businesses originate from the introduction of the stakeholder theory by Dr. F. Edward Freeman.


• The stakeholder theory outlines the existence of the stakeholder ecosystem - which involves anyone interested, involved in, or affected by a business - namely, any and all stakeholders(Freeman, 2010). Dr. Freeman suggests that for a business to truly succeed, it must focus on satisfying all of its stakeholders. Ignoring any of its stakeholders may cause detrimental loss to the business especially if they become dissatisfied.


• Thus, the importance of satisfying the stakeholder ecosystem grew as businesses understood the large influence their stakeholders could have on their operations. Unhappy employees leaving would cause a labour shortage and delay operations. Customer needs not being addressed would result in a loss of sales with customers moving elsewhere. Not enough financial returns for shareholders and investors could lead to them removing their investments. Stakeholders play a major role in ensuring that a business functions and therefore businesses must do their best to satisfy them.


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  Stakeholder Communication and Benefits

  
  


• For stakeholder needs and wants to be addressed, businesses must first be aware of them. To do so, they must establish strong and clear communication with their stakeholder ecosystem. But understanding and successfully satisfying stakeholders is not the only benefit for businesses if they have good stakeholder communication.


• Communication is a two-way street. It can be used not only to understand stakeholders but also to help them understand the business, its goals, and its decisions(Linton, 2019). This can aid in de-escalating any conflicts that may arise as a result of some business decisions while also keeping the ecosystem feeling involved in the business.


• Stakeholder communication is key to creating positive and stronger stakeholder relationships(Linton, 2019). A strong relationship brings a range of its own benefits. A good relationship with customers alone can help a business's sales as it constructs a more positive brand reputation and image. A good relationship with suppliers can mean working together for long-term sustainability for both.


• Keeping up with communication with stakeholders, especially those whose decisions heavily influence the business - like government agencies and similar organisations - can help the business prepare for the effects of things such as new legislation(Linton, 2019). If the relationship and communication are well established, some businesses can even be able to encourage these stakeholders to consider their position in their decision-making.


• Communicating the business's goals, strategies, and performance through regular communication will not only keep stakeholders informed but encourages them to be part of your "team." This can be done through special meetings, publications, and so on (Ellison & Watts, 2021)


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  Consultation With Stakeholders

  
  


• Decisions that are made in a business will affect stakeholders. Knowing when to consult and when not to is an important skill for any manager to have. When decisions are going to affect stakeholders no matter if they are employees, suppliers, local iwi, or government departments, consultation is a must.




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• Read "Ng Manu Krihi -Download Ng Manu Krihi -Communicating with StakeholdersDownload Communicating with Stakeholders" which covers the importance of consultation, the fundamental principles of communication, structuring positive communication, and crisis communication.


• It is written for Board Members but has plenty of valuable information for managers as well.




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• To read more on stakeholder theory go to this article "What Is Stakeholder Theory and How Does It Impact an OrganizationLinks to an external site.?" by Becky Simon.




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• Here is a webinar "Stakeholder Communication - Creating A Robust Stakeholder Communication Plan" where Ian Moody, a management consultant, will give you a deeper understanding of stakeholder communication.

Developing Long-Term Relationships

Building Long-Term Relationships with Stakeholders

Building long-term relationships with stakeholders requires a combination of communication, trust, and delivering value.These relationships can provide stability to a business by reducing the risks associated with changing stakeholders. This can help businesses to plan and invest for the future with greater confidence.

To ensure long-term relationships businesses need to implement strategies to:

• identify stakeholder groups and their individual needs and expectations,


• ensure regular communication,


• deliver value,


• collaborate,


• be transparent,


• ensure issues are quickly resolved


• monitor, measure and evaluate the success of their efforts.

Risks Associated with Changing Stakeholders

When stakeholders change frequently, businesses may struggle to establish trust and credibility with their new stakeholders. This can lead to skepticism and reluctance to engage with the business.Frequent changes can also damage the business's reputation, particularly if stakeholders feel that they have been mistreated or disrespected. This can lead to negative publicity, customer dissatisfaction, and decreased brand loyalty.

Changing stakeholders can also lead to disruption in the business's operations, particularly if the new stakeholders have different expectations or priorities. This can cause delays, conflicts, and inefficiencies. When stakeholders leave, there can be a loss of valuable resources, such as knowledge, expertise, and relationships.

If a significant customer or supplier, for example, decides to end their relationship with the business, it can lead to a significant loss of revenue and profits. This can impact the financial stability of the business and its ability to invest in growth and innovation.

Changes in stakeholders such as employees can lead to a loss of key talent and in-house knowledge, if they are unhappy with the culture or are unsure about their future in the business and decide to leave.

How to Build Long-Term Relationships With Your Stakeholders

Building long-term relationships with stakeholders requires a combination of communication, trust, and delivering value.Take the time to understand what your stakeholders need, what their priorities are, and how you can help them achieve their goals. This will help you tailor your communication and approach to meet their needs.

Regular communication is key to building strong relationships with stakeholders. Keep them informed of your progress, share updates on your projects, and seek their input and feedback.

Being honest and transparent is essential for building trust with stakeholders. Be open about your goals, plans, and challenges, and keep them informed of any changes or developments that may impact them. This can include regular meetings, progress reports, and requests for feedback.

Take the time to get to know your stakeholders on a personal level, and show an interest in their lives and interests. This can help build a stronger connection and lead to more productive and effective working relationships.

It is important to deliver value to your stakeholders. Whether it is through providing high-quality products or services, meeting deadlines, or going above and beyond expectations, delivering value can help build trust and strengthen your relationships with stakeholders.

Businesses can build stronger relationships with stakeholders by aligning on shared values and goals. This can involve identifying shared priorities and developing partnerships that help stakeholders achieve their goals.

Building long-term relationships with stakeholders involves more than just meeting short-term goals. Businesses should focus on developing partnerships that span multiple years and prioritize long-term success for both parties.

Identifying and Communicating to Your Different Audiences

As discussed previously, stakeholder communication is integral for a business to succeed. Businesses should try to satisfy their stakeholder ecosystem, which is compromised of different stakeholders. This results in businesses having multiple 'audiences' they must communicate with.

A few key types of stakeholders are:

• Employees


• Suppliers


• Customers


• Shareholders


• Investors


• Iwi


• Community


• Government

Stakeholder Communication Processes

For businesses to correctly and properly communicate with their stakeholder ecosystem, they should have a system set in place that can be adapted to suit their different audiences.

According to Roseke (2019), the 3 key components of stakeholder communication are:

1. Stakeholder identification


2. Stakeholder analysis


3. Stakeholder management

Stakeholder identificationinvolves identifying and categorising the stakeholders in your ecosystem (Roseke, 2019). They may be the traditional categories of external and internal stakeholders, or something more specific to your business. The important thing to remember is that a business should try to identify all of its stakeholders. Unidentified stakeholders can become an issue as they will not be adequately communicated with or satisfied.

The second step isstakeholder analysis. Once stakeholders have been identified, a business should try to understand what drives the stakeholder's interest in the business, what their goals are, and what needs must be satisfied (Roseke, 2019). This will allow businesses to properly cater to their stakeholders and also adjust their communication accordingly. There are tools that businesses can use to analyse their stakeholders, such as matrixes, that will also ensure that their analysis is consistent across their ecosystem.

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Here is a freestakeholder-assessment matrixDownload stakeholder-assessment matrixthat has been made available by the New Zealand Treasury that could be helpful in analysing and recording engagement approaches for different groups of stakeholders.

The last component isstakeholder management. This uses the information gained from stakeholder identification and analysis to manage the stakeholder ecosystem. The purpose of stakeholder management is to ensure that stakeholders are being kept track of and that their needs are adequately being met (Roseke, 2019). Stakeholder management involves adapting the communication methods a business uses to better suit its different stakeholders and make the communication more effective as a result.

When communicating with stakeholders as part of stakeholder management, there are 4 stages of communication according to B2B International (2018). These are:

1. Planning


2. Process


3. Presentation


4. Promise

Theplanning stageis concerned with identifying the aims and objectives of the stakeholder communication (B2B International, 2018). Once these are determined, this stage is used to plan how the communication process will occur and meet all or most of the aims and objectives.

Theprocess stageis where stakeholder communication actually occurs. It is focused on following the plan determined in the previous stage. Attention is given to ensuring that the communication is honest and clear (B2B International, 2018). As communication occurs, data is collected and used in the final two stages.

Thepresentation stageis where the data collected from the process stage is analysed further and then presented/reported on. The purpose of this stage is to not only analysing the effectiveness of the communication for future events but to also accurately represent the stakeholder's opinions and thoughts about the matter being communicated (B2B International, 2018). This is important for stakeholder management to then take these into account when working to satisfy the stakeholder ecosystem.

The final stage is thepromise stagewhen actions are taken or planned in response to the information collected and presented about the communication. This ties up the communication with the stakeholder and also helps the business when it wishes to communicate with the stakeholders again in the future.

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Further reading on stakeholder matrixes. "3 Types of Stakeholder MatrixLinks to an external site."

Communicating to Your Different Audiences

What you communicate and how you communicate will be different for different groups of stakeholders. Over the next few pages we will look at:

• establishing clear communication objectives for your different audiences


• preparing your message


• identifying and using the best medium for the communication

Establish Clear Communication Objectives

What are Communication Objectives?

Communication objectives identify the reasons a business would want to interact or communicate, with its stakeholders and what the business hopes to achieve from the communication exchange (Indeed, 2022). The communication could be a face-to-face conversation, email, memo, marketing campaign, or any other strategy that conveys information. Creating objectives for communicating can help a business or individual with strategies to assist with the content of the communication.

Identify and Communicate

Identifying and setting clear communication objectives is important for any good communication, including stakeholder communication.

Communication objectives are the goals or targets set for communication (Muilwijk, 2020), There can be overall communication objectives that a business follows for all communication it undertakes. This keeps communication consistent across the business and thus easier to manage. The other option is setting further and more specific objectives for each major stakeholder group. This allows for the communication of a business to still be relatively consistent but also more tailored to different stakeholder needs, making it more effective.

Whatever method or tool a business uses to create its communication targets, it must be aware of the purpose behind the communication. By focusing on the purpose of the communication when setting further objectives, businesses will benefit from stronger and clearer communication. According to Muilwijk (2020), some of the common purposes behind communication objectives can be built around are:

• Building awareness (for a product, policy, business, etc)


• Providing information


• Creating interest


• Stimulating demand

Harrison (2022) divides communication objectives into three main categories:

• Reputation management objectives


• Relationship management objectives


• Task management objectives

Reputation management objectivesare related to the identity, image, and perception of a business to others (Harrison, 2022). Communication objectives that are concerned with reputation management usually aim to provide information and build awareness.

Relationship management objectivesare concerned with how a business manages its stakeholder relationships. In other words, relationship management objectives are usually the communication objectives set for stakeholder communication. The objectives usually seek to provide stakeholders with information or to gain information from the stakeholders instead.

Task management objectivesare essentially all about achieving tasks (Harrison, 2022). Communication may be important for a task to occur - such as informing suppliers of low stock for more products to be ordered for the inventory. At times, the communication itself is the task, such as informing a superior about a project task. Therefore, task management goals can have a range of purposes, depending on the task it seeks to achieve.

Communication Objective Examples

Communication objectives can be in regard to:

• Sharing knowledge - create clear communication with no ambiguity, improve the communication response rate


• Persuasion - diversify communication delivery


• Entertainment -a marketing team may use entertainment to encourage customers to buy a product


• Creating demand -demand may be created for a product by describing the advanced features


• Growing and strengthening brand awareness -through labeling, advertising, and special events the business educates potential customers about healthy eating.


• Completing a transaction - how to convince a customer to make a purchase and close the deal.


• Creating interest in a new product for example - offering limited information and potential impacts. Creating an air of exclusivity and mystery around a new product.

(Indeed, 2022)

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If you would like to learn more about the communication planning process, take a look at this websiteReef Resilience Network

Preparing Your Message

Message Composition

Setting up a good communication process is important, but what is just as important is the composition of the message being communicated.

Part of preparing your message involves tailoring its contents, style, and format for the communication process that you will send to the intended audience. It is important for businesses to thus have established a good communication process.

To prepare any business message, there are five key steps that should be used according to Daniels (2021):

1. Define the purpose of the message


2. Analysis of the audience


3. Selection of the ideas


4. Collection of all facts related to the ideas


5. Organising the message

The first step is similar to the planning stage in the stakeholder communication process, in which the business outlines the objectives behind the communication. Having a clear idea ofthe purpose of the messageis necessary for the rest of the steps to occur.

Conducting ananalysis of the intended audienceof the message is useful in the sense that it ensures that the tone, channel, and format of the message are tailored to the receivers needs and preferences (Daniels, 2021). This in turn will help the communication be more effective, as the chances of misinterpretation or offense greatly decrease.

The third step is toselect ideas, which involves outlining the main points that need to be discussed within the messages contents and additional details that could be included. It can be thought of as the brainstorming stage in the writing process.

Afterward, you shouldcollect all facts and data that are relatedto the points the message will convey (Daniels, 2021). The data will provide support for the main points of the message and is especially important when the message aims to persuade or inform the receiver about anything in the business, as it adds credibility to the message.

The last step is toorganise the messageand all of its contents before it is sent. This involves outlining the main points from step 3, data collected for step 4, and then formatting the draft according to the analysis of the receiver from step 2. Revision of the drafts is essential to fine-tune everything before it is sent to ensure the best version of the message possible.

These four steps will become automatic and less time-consuming the more you use them.

7Cs of Communication

Other than the actual process of preparing a message, businesses should also try to have guidelines to check the quality and consistency of their messages. This may be a more specific set of guidelines set by the business for its overarching communications. It can also be the use of principles already present in the field of communication studies, such as the 7Cs.

Essentially, the 7Cs of communication are a group of principles that is believed all communication should adhere to be effective. The purpose behind these 7 principles was to give a set of guidelines for senders to keep in mind before they sent the message to the receiver (Twowp, 2021). They are used to help ensure that the sender and receiver are on the same page.

The 7Cs are:

1. Clear both the purpose of the message and its content should be clear


2. Correct information, language, and grammar in the message should not have any mistakes


3. Complete ensure that the message is complete and all points are covered


4. Concrete points should be based on solid facts and if there are multiple messages, they should logically fit together.


5. Concise try to stick to the main points and not include unnecessary information that could confuse the reader


6. Considered/Coherent messages should have a logical flow and be able to be understood


7. Courteous be polite to your intended audience and demonstrate respect through your message

I would like to add one other point to this list. Identify any potential barriers and ensure you have a strategy to counteract these.

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If you would like extra information on good writing techniques take a look atTHE ART OF WRITING.

Using the Best Medium to Communicate

As emphasised in the previous pages, the channel or medium selected for communication is extremely important. The message, audience, and communication channel should all complement one another for the communication to be effective.

But there are other factors to consider as well when making the decision about your communication channel (Honey, 2019). Here are a few main ones to consider:

• Formality


• Confidentiality


• The number of intended receivers


• One-way or two-way communication


• Synchronous or asynchronous communication


• Time sensitivity


• Role of receiver


• Corporate culture

Each of these main factors will influence the options of mediums you can use to communicate your message to your intended audience (Honey, 2019). The formality and confidentiality requirements of your message will need to be met by your medium. If the message will be part of two-way, asynchronous communication, the medium should be compatible for this to occur. These factors, or a similar model, will serve as helpful guidelines for businesses in regard to their channel choices.

Another set of guidelines can be found when analysing the main categories of business communications (Bovee & Thill, 2010). Take note of the advantages and disadvantages of each category and identify whether they will be complementary to your message and audience.

For example, a benefit of oral communication is that it provides an opportunity for immediate feedback or response from the receiver. This would be useful for two-way communication that is time-sensitive and needs a timely response from the audience.

Image: Advantages and Disadvantages of the categories of business communications (Bovee & Thill, 2010).

If the business undertakes a variety of communication with different requirements and audiences regularly, it could also be useful to determine internal guidelines to aid in selecting appropriate communication channels. These internal guidelines could be similar to the options discussed above, or be based on a set of these guidelines. An example of a guide based on different sources is a channel selection process flow chart. This can be as complex as the business requires and will be a helpful starting point for all communications.

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This 22-minute video looks at communication channels and the best options to choose from. It does look at communicating with friends but the information can be related to close business colleagues as well.

In the video, Mary introduces a framework to help choose the best medium for your message.

Step One:Two simple questions to ask yourself are:

1. Who are the recipients of the message?
   What is their proximity to you?


2. What is the purpose of the message?

Step Two:Three communication contexts

1. Intimate - friends, family, and inner circle, personalised
   i.. send a message through Instagram, ii. phone calls, iii. video chat, iv. text messaging, v. digital invitations, vii. email


2. Professional - boss, clients, colleagues, general acquaintances
   i. email, ii. phone call, iii. project management software, iv. video chat,


3. Public - strangers and big groups of people
   i. Social media posts, ii. knowledge databases, iii. blogs, iv. youtube videos,

Remember face-to-face communication is the most powerful personal interaction!

ollow-up

An important stage that can sometimes be forgotten in business communication is follow-ups. Particularly for two-way and asynchronous communication. For these types of communication to be fully effective, a follow-up should occur on at least one partys side. But in most communication, regardless of the type, follow-ups have been shown to play a role in the overall effectiveness of the exchange.

The importance of follow-ups to communication was made prominent in sales departments. Salespeople realised that following-up communication with their customers helped create a stronger relationship which allowed them to retain more customers. The same principle can be applied to stakeholder communication, where stakeholders will feel more valued and part of the team, with regular contact.

Follow-ups can also be useful for internal communications in the business. For example, if a meeting is held to assign tasks to a team, it would be beneficial for the manager to follow up after the meeting (Coruzant, 2021). Checking in with each member about their progress on the task will hold them accountable and also ensure that the team is on track.

There are many benefits of including follow-up in your business communication process (Coruzant, 2021). Here are a few main benefits:

• Keeps everyone involved in the communication accountable,


• Helps clear up misunderstandings and keep everyone on the same page,


• Demonstrates care and helps receivers feel valued,


• Helps renew interest in the topic of the communication,


• Aids in keeping you and the business remembered by the receiver.

Strategies for Follow-up

Though it sounds straightforward, mastering the art of follow-up is not always straightforward. There are a few strategies businesses can implement to help ensure that their follow-ups will be effective:

• Create and use a follow-up schedule


• Use different contact formats


• Create and use templates


• Track actual contact attempts

Follow-up schedule

It can be quite tricky to ensure that the timing of your follow-up is correct. Has it been too long? Or is it too early to reach out again? One way to help get rid of this uncertainty is by creating and using a follow-up schedule (Lead Simple, n.d.).

Create a schedule that outlines and records when all follow-ups should be happening. It is also beneficial to track when the follow-ups did happen, and this will be expanded upon in the last strategy. The complexity and uses of a follow-up schedule will be dependent on the business, and can always change depending on needs.

Use different contact formats

If possible, try to diversify your communication and use more than one way to reach out (Lead Simple, n.d.). This may not always be a feasible option if the channels suitable for a specific communication are limited. But, more flexible communication, can be a good strategy to help keep you and the business in the front of the receivers mind.

It is also useful if a previous communication channel has not been as effective as it could be. For example, a stakeholder may not have responded to follow-up emails that well, so the business could try calling them to see if that communication would be better. The feedback gained from this can be used to inform the whole communication process and keep communications as effective as they can be.

Create and use templates

It can be timely, and therefore costly, to personalise every communication. Especially in large businesses or communication processes where follow-ups are frequent, constantly personalising communication from scratch can be resource-draining.

To solve this problem, businesses can create basic templates for employees to use in their communication (Lead Simple, n.d.). They will then only have to tailor and adjust the template. Using templates will increase the quality and consistency of communication, while simultaneously reducing the effort and creativity needed.

Track actual contact attempts

Using the follow-up schedule created in the first strategy, businesses can extend its use by also tracking the actual contact attempts. This will help with checking whether the follow-up systems that have been put into place are being followed. If they are not, it could indicate room for improvement (Lead Simple, n.d.).

Tracking the actual contact attempts also provides businesses with opportunities to adjust their schedule as needed and ensure they are up to date. Businesses can also track extra information such as the effectiveness of each follow-up to try to replicate it in future communication.

When emailing you can request a delivery receipt to see when the receiver has opened it.