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Stakeholders, the key to improving reputation

In the last decade the term VUCA has been used more and more to define the situations of volatility, uncertainty, complexity, and ambiguity that companies and institutions must face in a society like the current one that sees shifts in paradigms that have remained stable for many years.

The evolution of technology and its impact on all activities of life, the economic and social crisis, and the emergence of a new generation in the labour market and of consumers, are the three basic vectors that have caused changes in society / economy / citizenship relationship and in some of its rules. All this is creating new challenges and needs and many of them are to be met by social innovation based solutions.

In the specific case of companies and organisations, and as a consequence of these major changes, there are two key aspects to understanding the new configuration of the social scenario. On the one hand, the loss of confidence in organisations, both public and private; on the other, the impossibility of companies to control their own brand, which is constantly exposed to the complexities of society. This new reality of paradigm shift presents an opportunity, which is the management of intangible assets that are intrinsically linked to the values ​​of the company such as reputation, communication, brand and public affairs.

In the 1970’s 80% of the value of an organisation resided in its tangible assets; today, 80% of the value resides in its resources and intangible assets such as reputation. However, companies have lost control over their reputation to the extent that everyone is now a potential opinion maker. This fact obliges organisations and leaders to understand and adapt successfully and quickly to this new scenario in which one actor stands out, the stakeholder – or interest group. This actor has become an active part of the life of companies and the management of their brands and their challenges.

The term stakeholder was used for the first time at the Stanford Research Institute in 1963. Stakeholders were defined as “those groups without whose support the company or organisation would cease to exist”. Or groups of people and entities that are affected by or can affect the activity of a company, which have a growing power, and that are configured as key players to ensure the survival of a company because of the influence they can exert on the company’s reputation.

The definition is still 100% valid because active listening to interest groups is essential in the management of an organisation. It is essential to gain stakeholder confidence, creating long-term value. And it is fundamental to be able to measure this value with non-financial indicators that are widely accepted within and beyond the company. These are of fundamental strategic importance to management and complement traditional financial indicators.

It is necessary to read the new social context, introduce a multi-stakeholder vision and know what the different interest groups of the company think and what they do. Reputation depends on these aspects and without a reputation there is no future.

It is necessary for companies to align their mission and operations, based on the interests of the stakeholders, with growing sensitivity for certain social and environmental issues such as the Sustainable Development Goals (SDGs) of the UN. Companies have understood that connecting with the values ​​of their stakeholders is strategically profitable. The consumer wants trust, wants to feel part of a community; if you perceive that the company’s values ​​coincide with yours, you will value it more and this will affect your purchase actions. We would rather buy the products or services of a company with whom we share some values, than buy from another with whom we share less affinity.

A good reputation, a goal to which we aspire, is achieved with good work sustained over time. It is a transversal task that involves all the components of an organisation and, at the same time, is configured as an intangible resource that makes it possible for all the areas of an organisation to benefit. From an economic point of view, it facilitates the achievement of business objectives for the different areas. Good reputation has a positive impact on the generation of value for the head of marketing (win customers and gain their loyalty), human resources (attract and retain talent), for the financial (positive financial results) and for those responsible for institutional relations and public affairs (obtain and keep your operational licenses). In addition, from a more internal (and emotional) point of view, reputation generates pride of belonging and alignment with the strategy of the organisation.

Keeping apace and in line with the trends and concerns of our stakeholders, and of society, is the way to become a company with a good reputation, valued, accepted and, therefore, a company worthy of having a future.

20 de November de 2018
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