Globalization has created greater interdependence in our societal, economic and political systems. This is increasing the number of systemic risks faced by our organizations—as evidenced by the 2008 financial crisis. It also makes responding to crises even more complex.
The multiple levels of stakeholders that are a challenge to engage with in the course of normal business become a nightmare to manage in a crisis. Besides employees, regulators, politicians, victims, customers and shareholders, organizations now also have to reckon with stakeholder groups that become involved through social media networks.
The multitude and diversity of these intertwined stakeholder groups are complicating and compounding the intensity and spread of crises. We are witnessing more stakeholder outrage at corporate and institutional misbehavior. Internet-based news sources allow individuals worldwide to follow such situations. Social networking sites, blogs and online news sites can spread the unfolding of crises and scandals in the public and private sectors virally.
This interconnectedness is well illustrated in three recent and ongoing crises: the disappearance of Malaysian Airlines flight MH370 and the GM car recall and the ferry disaster in Korea. Although very different from one another, each crisis shows its own highly complex and multilevel stakeholder scene. In each case, the communications and actions of the different stakeholder groups (such as regulators, victims’ families, shareholders and politicians, among others) have complicated the situation generating conflicting messages.
For example, Malaysian Airlines is owned by the Malaysian government and is not an independent entity. It has to align with the government’s agenda and messages. The large number of Chinese passengers called for heavy intervention from the Chinese government and demands for answers in a situation where mystery still prevails. Such a stakeholder scene could be described as a maze with multiple connection lines and pressure points that crisscross each other. This is a nightmare to navigate.
In the case of a smoldering crisis such as GM, when the problem was discovered years back, stakeholder mapping could have been a useful tool to identify potential stakeholder pressures and to develop worst-case scenarios that to prevent and mitigate the escalation of the situation to a full-blown crisis.
Mapping stakeholders in a crisis
Stakeholder mapping consists of identifying all audience groups (no matter how small or remote to the crisis situation) with a stake in the crisis, categorizing them into at least three groups: allies, neutral parties and opposition. For example, this can include politicians, NGOs, action groups, shareholders, employees, victims and victims’ relatives, different regulators, etc. It then requires defining what their specific issues are regarding the crisis situation, whether they are likely to take any action, whether the organization has any influence with them, and what the strategies, desired outcomes and key messages are. This map must be reviewed, adjusted and fine-tuned as the situation develops and more stakeholders come onto the scene.
Stakeholder mapping steps
1. Identify all audience groups, no matter how small or remote to the crisis situation, that have a stake in the crisis. For example, this can include politicians, NGOs, action groups, shareholders, employees, victims and victims’ relatives, different regulators, etc.
2. Categorize audiences into at least three groups: allies, neutral parties and opposition.
3. Define each audience group’s specific issues regarding the situation, whether a group is likely to take any action, and whether the organization has any influence on this group (and if not, focus instead on the ones that can be influenced).
4. Define the desired outcome, the strategy for reaching it and the key messages to use. Stakeholder mapping is a continuous process; maps should be reviewed, adjusted and fine-tuned as the situation develops and more stakeholders come onto the scene.
“Stakeholder mapping identifies stakeholder expectations and power and helps in understanding political priorities,” write Gerry Johnson, Kevan Scholes and Richard Whittington, Ph.D., in their book Exploring Corporate Strategy. “There are different ways in which stakeholder mapping can be used to understand stakeholder influence. It underlines the importance of two issues: (1) how interested each stakeholder group is in impressing its expectations on the organization’s purposes and choice of strategies, and (2) whether stakeholders have the power to do so.”
In business-critical times or when facing an escalating issue, management teams can use stakeholder maps to develop scenarios, build strategies, think freely and generate solution-focused approaches. In the typical scenario-planning exercise, the management team simply asks, What if?
Developing worst-case scenarios
The very nature of crises is that they are unpredictable–we do not know how long they will last, how they will twist and turn and how they will end up. One thing is almost always certain, though: They get worse before they get better.
During a crisis, when time is of the essence, building different worst-case scenarios is invaluable. Under the high-pressure conditions of a crisis, scenario planning helps teams pursue a dominant strategy related to how bad the situation is likely to get. Worst-case scenario planning can be done on three different levels. First, the situation itself could get worse (e.g., a fire intensifies and spreads). Second, the situation itself could be under control, but its impact could worsen (e.g., the fire is out, but one of the injured victims in hospital dies). And third, stakeholder pressure could increase as a result of outrage due to a lack of company response (or inappropriate response) or company inaction. This doesn’t mean gazing into a crystal ball to predict the future, but rather having a fast and powerful methodology to be ready for the worst.
“The great virtue of the scenario approach to planning,” write Charles Hill and Gareth Jones in their book Strategic Management Theory: An Integrated Approach, “is that it can push managers to think outside the box, to anticipate what they might have to do in different situations, and to learn that the world is a complex and unpredictable place that places a premium on flexibility, rather than on inflexible plans based on assumptions about the future that may turn out to be incorrect.”
In a crisis, the problem cannot always be “fixed” or controlled quickly, as we have observed from recent corporate crises. More than ever, crisis management efforts must include mapping stakeholders, their perceptions and their conflicting agendas. Armed with this insight, crisis teams can address their issues credibly and prevent escalation. Stakeholder mapping and scenario planning are not only invaluable tools and skills to prevent crises but also to mitigate their impact when they occur.
With their understanding and experience of stakeholders and grasp of complex issues, business communicators are well placed to help their organizations map and engage effectively with both internal and external stakeholders and to steer the course in an unpredictable world.