Last weekend we hosted my mother’s side of the family for a last hurrah Christmas gathering. Over time we’ve decided that December is too busy for all 17 of us to get together, so a few years ago we decided to shift our annual gathering to early January. Takes a bit of the pressure off in December. In theory. There always seems to be one more gathering to fit in: my partner and I seem to be constantly juggling catch ups with family, friends, work colleagues… this year we even got invited to pre Chrissy drinks with the real estate agent! It’s a careful balancing act though – making sure that we see enough people and don’t offend anyone, fitting in multiple functions on the one day, getting the Christmas cards out and presents sorted, looking up trifle recipes….
I was reflecting the other day that this is a lot like managing stakeholders for an organisation: there is always a variety of important parties involved in what you do, and they need to feel loved by you, but it needs to be the right amount of love (not just at Christmas time!).
Satisfying stakeholders is a critical aspect of any business role. A quick list of stakeholders would generally include the Board and Audit Committee, bankers, auditors, insurance brokers, plus internal stakeholders including the CEO, managers, and employees.
Analysing and managing stakeholders is a key step in the process of developing an organisation’s financing strategy. In this context, stakeholders are important in providing funds and sustainability for organisations.
I’ve found the Mendelow Matrix (Aubrey L. Mendelow, Kent State University, Ohio 1991) a useful tool to assist when reviewing stakeholders. The tool classifies stakeholders on a grid according to their level of influence and level of interest, then recommends strategies to help with managing each category.
Here’s my potted summary of the classifications:
Low Interest & Low Influence – the cousin Graham of the family who disappeared to India ten years ago – these people or groups have limited influence over what happens in or to your organisation, and they’re not that interested anyway. For a business, the general public would generally fall into this category, and even suppliers if you have many small ones. Mendelow suggests that the action that you take with this group is to monitor them: keep an eye on public trends, particularly as they relate to your business operations; be aware of changes in your suppliers. Make sure you have some way of contacting cousin Graham and inviting him to your events, but don’t get too miffed if he doesn’t reply. They’re still stakeholders and important, but fairly low maintenance ones.
Low Interest & High Influence – the rich Uncle Pete of the family – these organisations aren’t that interested in your day to day operations, but if they do have cause to get involved they can have a big impact. For a lot of organisations, this can include all the regulatory bodies like the Tax Office, Trade Practices Commission and Consumer Affairs departments. Media can also fit in here. For this group, Mendelow recommends that you keep them satisfied: so file your BAS and tax return on time, make sure you have appropriate consumer information on your website and offer sensible product warranties. Respond promptly to requests from media, and have a media strategy in place. Rich Uncle Pete is generally happy being left alone, but if he suddenly wants to have a family photo at Christmas, do your best to oblige him!
High Interest & Low Influence – the great Aunt Shirley of the family – these people and organisations will keep a keen eye on what you are doing, but don’t have a lot of say in the directions that you choose. For larger charities, the volunteer pool can fall into this category. Staff can also sit here, depending on how well organised they are. Mendelow advocates that you keep this group informed: publish a newsletter for your volunteers, hold regular meetings with your staff. Keep your great aunt Shirley on your Christmas card list.
High Interest & High Influence – Mum and Dad – these stakeholders are deeply interested in your operations and can have substantial impact on what these are. For many organisations, this will include Board members, large donors and financiers. Mendelow’s strategy with this group is to closely manage them: set up a Board communication plan, promptly follow up on donor and bank requests. I won’t be prescriptive about how you, er, manage your parents, but they do need to feel the love!
Part of developing a financing strategy for an organisation is considering where each stakeholder sits, where you would like them to sit, and the strategy to get them there. If you’d like to hear more about developing a Financing Strategy – our current Feature Product at Social Business Consulting – contact us and we’d be happy to help. At no extra cost, we can also provide some tips about planning Christmas functions – it’s never too early to start!
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