The new blueprint for managing stakeholder tensions; an antidote to “people pleasing” syndrome

The medieval poet John Lydgate is credited with writing that, “you can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time”. This medieval axiom might feel like a statement of the obvious. But many modern companies appear determined to disprove its final idea: they try to make every constituent happy, all of the time. In this mission, they are destined to fail. 

Instead, companies should adopt a starkly different mindset. 

First, corporations should recognize that every stakeholder group will not feel the same way about them at all times. Tension between groups is natural, and that makes it critical for companies to understand the tension.

Second, executives need to acknowledge that, on occasion, companies will inevitably do things that anger those audiences. It is unrealistic to aim to please all of the people all of the time. What leaders can aim for is to not be surprised when the reaction comes.

Third, and most radically, businesses should take a new approach where they consciously sacrifice some stakeholder goodwill in order to improve their standing with other groups. When done authentically and with a clear purpose, leaders can master managing stakeholder tension.  

Consider this hypothetical scenario:

ABC Clothing Company, a publicly traded fashion house, announces sustainability efforts that involve new sourcing of raw materials, manufacturing locations, as well as packaging revisions. The move is celebrated by consumers via social media, and by ABC’s employees. However, in perhaps a more hushed tone, investors are wary of how this shift will impact ABC’s financial forecast; and policymakers are concerned about the potential impact of changes on constituents working at the company’s current facilities.

A company’s decisions like these are unlikely to be received with the same enthusiasm by all constituents. As the ABC Clothing case illustrates, a choice might be received well by some stakeholders, but poorly by others. 

A common but mistaken assumption is that all stakeholders feel the same way about a company at any given time. This belief has been driven in part by the many rankings, indices and polls that affix a single, overall brand, reputation or trust score to a company. Reality is more complicated and nuanced than these summary metrics. Different audiences hold divergent views that shift over time.

Just as a sales team would want to drill down into its different buyers, stakeholder sentiment cannot be grouped together as a monolith. ABC learned that the happiest stakeholders in its orbit were the loudest, and there was insight to be found with a 360-degree view. Similarly, sentiment is not static and firms need to be continually measuring, especially after impactful decisions that could see its stakeholder groups react.

As Lydgate noted, a group of people will inevitably become more or less dissatisfied over time. Organizations must prepare for negative sentiment by at least one, and accurate measurement of such will help chart a proportionately appropriate response. Every announcement or action will be interpreted and scrutinized differently, by different groups. Like a chess player holding their piece down to examine every possible move, organizations must do the same when it comes to decision-making and stakeholder sentiment. By accurately measuring the sentiment of different stakeholder groups, companies can make deliberate choices about losing some support for certain groups in order to gain it from others. 

In the case of ABC, management could have mandated focusing on pleasing one stakeholder group and measuring their sentiment before and after their sustainability announcement. If ABC had poor standing with its consumer base, perhaps they would loudly announce its sustainability initiatives, knowing it aligned most with the customers they wanted back. Conversely, if ABC had strong sales but a slumping stock price, it may have toned down its approach to publicising sustainability efforts, knowing that it would further displease investors. In both cases, exceptional insights would underpin more thorough decisions.

An example of how stakeholder tension illuminates disagreements between stakeholders and which groups are being satisfied and which need more attention.

Using our in-house methodology, a nuanced view illustrating the differences in attitude between customers, investors, employees, policy makers and the like can be achieved. Penta measures on-demand exactly how stakeholders are hearing about a company, and how their reactions can contrast with each other through an owned platform that captures millions of news, social media, television, podcast, and other media every day. This data is the key to precise decision-making that takes into consideration different stakeholders, so organizations can balance which groups take priority. 

We believe that at times companies will want to use these insights to draw down on some of the goodwill that they have built up with one audience in order to advance important strategic initiatives. The implication of what we term “managing stakeholder tension” is that leaders might actively choose to upset one stakeholder group in order to drive the organization’s agenda forward. In order to do that, it will of course be critical for the company to understand quantitatively its reputation with those different audiences.  

Just as no two companies are the same, each organization possesses its own stakeholder groups with their own unique profiles and needs. In this way, firms looking to assess its stakeholder sentiment and corresponding tensions cannot merely copy and paste tactics from a different time or competitor.

Curious what the tension between stakeholders might look like for your organization? We would be happy to provide you with a free analysis of your company's stakeholder tension using Penta’s proprietary data. Simply let us know by filling out the form below: