Measure, manage, monitor

It’s all about people and relationships. Based on the Caux Round Table (CRT) principles established by industry leaders across the globe, businesses should focus on making people live and work together for the common good as well as recognize the value of each person as an end and not as merely a means to an end. 

Now I definitely agree with the tenets of the CRT; at the end of the day it will all be about those who are affected by business. It will all be about people. The quality of relationships established and maintained by organizations is critical to its perpetuity. We as managers, however, must be vigilant in ensuring that these motives are partnered with methods to ensure its achievement, making sure that financial objectives are met and then are used to strike a balance with other more important objectives. 

The concept isn’t new since the concept of stakeholder management was formulated long ago with the purpose of harnessing the power of people and relationships to ensure that businesses and organizations continue to flourish and prosper. Profitable companies are said to have solid relationships with relevant groups in their business, be it customers, employees, suppliers, distributors or shareholders. 

Unyielding relationships with customers and employees along with other stakeholders define the frontrunners in today’s fully global economy. Inasmuch as stakeholder management has been studied, debated and implemented across leading corporations throughout the globe, its application remains limited towards identifying and mapping stakeholders that are relevant to an organization. Most managers still struggle in evaluating the well-being of their stakeholder relationships and continue to straddle a fine line between a hit and a miss. 

At this point I would like to share with you a framework I have recently learned towards stakeholder management, TRI*M (TRI*M is a TNS stakeholder management philosophy that stands for three Ms: measure, manage and monitor). 

Measure commitment 

In times of crisis, measuring commitment is critical in determining business prognosis and identifying much needed strategies and tactics. Competition becomes tighter as customers begin tightening their belts. 

These days, satisfaction ratings are not enough to measure success as it does not necessarily translate to loyalty. Simply put, we would need to measure both stakeholder satisfaction and loyalty to truly determine if an organization can continue to keep its customers especially in economic downturns. 

Manage relationships 

Every practicing manager knows that you can’t manage what you can’t measure. Having a measure of stakeholder commitment paves the way for robust strategies that are fact-based and actionable. In order to do this, a company must have a gauge of their perceived strengths (and weaknesses) in the mind of the stake­holder. Looking into each stakeholder’s view of the company and its competitors generates stakeholder-specific actions that can be used to maintain and improve relationships for both the short and the long term. 

Monitor performance 

The ability to compete dynamically lies in the organization’s ability to consistently monitor its performance against stakeholder expectations vis-à-vis competition. Continuous evaluation of cause and effect is the only way to ensure that actions will have the desired impact. Identifying companies for targeted benchmarking is critical in managing the increasing complexity of multi-channel relationships. Knowing what works and taking measures to replicate those feats need not be limited to competition. Companies may consider approaches used by acknowledged leaders in other industries with similar value chains. Today’s era of achieving multiple bottom lines demand responsive and responsible actions that enhance stakeholder relationships and foster corporate success. An even greater challenge is finding a universal tool that would enable organizations to measure, manage and monitor stakeholder relationships. 

The author has been with the pharmaceutical industry for more than 12 years and is currently a Senior Research Manager for Healthcare with TNS, a Kantar Group Company. He is a student in the Doctor of Business Administration program of the De La Salle University Ramon V. Del Rosario Sr. Graduate School of Business. He welcomes comments at enrique_reyes@dlsu.edu.ph

from Managing for Society Column Manila Times (Print & Web Editions), June 23, 2009 Enrique Antonio B. Reyes, RPh, MBA