Moving From Crises to Interactive Management

Crisis management sets in whenever there is a crisis that involves stakeholders. This may include anything from a major customer compliant that is highly publicized, a delay in the politically connected project launch or even the disappearance of an airline. In any case, under such circumstances the relationship with stakeholders is at an all time low and the trust deficit gap has widened considerably. Managing the situation is crucial to the survival and reputation to the company. What is needed under these circumstances is crises management. Such a management approach is characterized by being reactive, very vulnerable to shifting perceptions and can lead to hostile reactions from affected stakeholders.

Depending on how such a situations are managed, the relationship with stakeholders may improve or deteriorate even further. If handled well, the perception of a lack of credibility by the organization concerned may be altered somewhat. Gradually the affected stakeholders such as potential clients will realize that the company has the capability the avert such crises and has the character to take ownership of untoward incidents. However, failure to react will further erode the company’s credibility as doubts emerge of their capability and character. This was well illustrated in the case of the missing MH370 airplane.

Proactive management is an attempt to maintain good relationships with both internal as well as external stakeholders. Maintaining positive relationships are only possible through appropriate management of their expectations. This will require the identification of relevant stakeholders, and taking proactive measures in keeping them informed of the goings on within the organization. In such organizations, stakeholder expectations are anticipated in advance with regular updates and information provided. Such an approach aims to maintain the good relationship it has built over the years. Large companies have dedicated resources aimed at maintaining stakeholder relationships owing to the immense importance attached in doing so.

Most organizations I have dealt with are comfortable with the concept of proactive management. As long as there are no untoward incidents or negative perceptions arising in the minds of stakeholders towards the company, it is fine. This line of thinking is wrong on three counts.

The first is that we now live in a digital age where information can spread from anywhere and reach anywhere within seconds. Hence all organizations risks having their reputation tarnished anytime. Having a dedicated team to deal with maintaining positive attitudes towards the company does not necessarily mean that it is not vulnerable to attacks from disgruntled stakeholders.

The second is that we live in a hypercompetitive environment, in which competitors have the ability to lure customers away by developing innovative products or services. Nokia is a good example of a massive company that has almost been wiped out by the development of the smart phone. The Iphone was developed by having close interaction with prospective clients and developing a product that customers wish they had. This was a result of engaging with prospective clients to exceed their expectations.

The third is that stakeholders are more educated and less loyal. They move where technology takes them and thrive on the fringes of technological developments. They need more than just information about what is happening. They need to be part of what is happening. This is where interactive management takes root.

Interactive management is a management concept that is based on the belief that everyone wants to be part of something exciting. All stakeholders, both internal and external need a sense of clarity on where the company is headed. This is possible only through interactive stakeholder engagement. Stakeholders have to be encouraged to be more involved, to contribute and to collaborate with the organization both in developing the strategies as well as implementing them. This would require such organizations to embrace change. By doing so, stakeholder engagement will enhance the relationship with stakeholders, who should be viewed as partners in developing the future of the organization.

As we move from crises management, to stakeholder management program, and land on stakeholder engagement, we see a gradual transition from being reactive, proactive, and finally to being interactive. Essentially this marks a higher degree of stakeholder interactive maturity that will determine the future of the organization to the well being of all stakeholders associated to it.

Dr Rumesh Kumar is a certified a href= "http://sharma.com.my/index.php/table/project-management/"project management professional, a certified professional trainer and performance improvement consultant specializing in the areas of leadership