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QBS on Stakeholder and Loyalty Management Published: Wednesday, August 9, 2006 By: Dr. Manuel Ángel Morales

A stakeholder strategy provides a road map for an organization to forge new relationships with strategically important stakeholders and also to reorient or extend existing relationships. It is a core component of an overall corporate strategic plan. The stakeholder strategy should identify key stakeholders, strategic priorities, and specific goals for each stakeholder group, and outline and action plan for each of them. The strategy is a work in progress that needs to be extended and updated as relationships develop. Due to the quick dynamics regarding this process, its focus should be on medium-term period of two to five years.

At QBS, for years, we have worked with the design and the researched premise that to the extent that organizations are able to recognize its interdependence, with the external environment, reflect upon their business value to the situation, and execute in real time and responsive manner, they possess a valuable, rare, different and nonsubstitutiable strategic resource.

On the other hand, reaching the 21st century, it is well accepted that strategies for improving profitability have shifted from concrete corporate assets, such as machinery and labor, to intangible assets, such as employee motivation, morale and satisfaction, plus customer delight. The paradigms of work environment, culture transformation and organizational learning concepts point to a further extension of the domains of employee growth and organizational development.

For decades we have been working with the proposition of relationships first and then business, making the case that this idea is vital for managing the relationships organizations have with the external stakeholders and for understanding the intangible qualities of those relationships. In today’s terms, once a company has re-engineered and restructured its operations for maximum efficiency and effectiveness, and has created a process for focusing on its core competencies, relationships take a more key role in ensuring sustainable profitability. The progression of this management theory goes from presenting strong supply-chain relationship to building trust as a mutually beneficial arrangement to reduce costs associated with contracting, monitoring agreements, resolving conflicts, and managing interpersonal relationships. The rules of loyalty management are: 1) play to win-win; 2) be picky as membership is a privilege; 3) Keep it simple, reduce complexity for speed and flexibility; 4) reward right results; 5) listen hard and talk straight; 6) and preach what you practice.

Effective business relationships are grounded in mutual interdependence, serving as incubators for creativity and innovation, leading to improvements in quality, product, service design, quickness and flexibility. Intelligent leaders and managers have always known that the brand, the reputation and the ease by which customers and stakeholders can approach the organization is an important asset. Organizations of all kinds have to be concerned about their social interactions. This is central to their capacity of attracting new customers and sustaining existing ones.

Good relationships with community leaders and institutions are also good business practices. An organization that is view as being part of the fabric of the society will be more likely to attract and keep the best employees, reduce costs and increase support from customers and stakeholders.

We are entering into an era of high public consultation and interest group politics, and organizational leaders are coming to terms with the importance of managing relationships with all kinds of stakeholders (employees, retired employees, customers, stockholders and investors, suppliers, social leaders, industry associations, competitors, governments, legislatures, courts, and the general public). They know that the best way to achieve economic and social goals is taking into account the interests and needs of those who are going to be affected by their actions.

In this new epoch, the society, the productive sectors, the public, the interest groups and the business leaders are looking for new ways to harness the integration power of organizations to achieve economic and social goals.


Copyright 2006 QBS, Inc.
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