Stakeholder Management

When a crisis emerges few of the executives will have “been there before”. In contrast, many of the stakeholders will have previous experience of turnarounds and often have strong opinions on what needs to happen. There is frequently a mismatch of experience and expectations, the bridging of this gap is a part of what we refer to as Stakeholder management.

Stakeholder management encompasses both perceptions and expectations. Effective stakeholder management provides a shield for the management team in a turnaround situation, protecting them from pressures and allowing them to focus on the business.

Our approach to Stakeholder management can be summarised in the key stages in a turnaround as follows:

Crisis management and stabilisation: This is when stakeholder relationships are stabilised. Here the communication of cash positions, and then subsequently delivering to these forecasts is an essential element in rebuilding stakeholder confidence. A clear timetable for the production of the turnaround plan will be agreed. This stage should result in a standstill with key financial stakeholders and allow some breathing space for the development of the turnaround plan.

Robust planning: This is when stakeholder relationships are rebuilt to support the turnaround strategy. We will conduct regular review meetings to apprise the stakeholders on progress and obtain their input to ensure that their concerns are accommodated where appropriate. This will help ensure that the stakeholders understand the alternatives and therefore have an appetite for the proposed strategy.

Financial restructuring: This is where the financial stakeholders arrive at, through mediation, an agreement as to the refinancing of the business.

Operational restructuring: A clear communication routine remains vital as stakeholders’ positions may change and stakeholders will have become accustomed to regular information flows form the business.

Stakeholder: a stakeholder is any person with an interest (financial or otherwise) in a business. It follows therefore that stakeholders have an interest in or an ability to influence the outcome of a turnaround.