Few businesses have the depth of understanding of the needs of these stakeholders needed to really address them nor a way of keeping track of them over time. We believe that the successful business of the future that genuinely creates value for itself and its stakeholders will need to work effectively with these stakeholders and invest in those relationships.
Even leading businesses, who are committing considerable resources to engaging with stakeholders, often still only focus on the satisfaction of those stakeholders and rely on vague or qualitative descriptions of the needs of the stakeholders. KPMG and that of Relationships Analytics®(RA) have found that conventional stakeholder ‘engagement’ measures satisfaction in a very limited sense. This often gives a general sense of ‘happiness’ but not a deeper understanding of the drivers of that happiness (or not) and where improvements can be made. To complicate matters further, we find that there is often a different perception of the strength of a relationship depending on which side is being asked to comment.
Few are able to consider the actual effectiveness of those relationships in delivering mutual benefit through communication, clear understanding and a sense of shared goals. In our view, a business that does not have an effective dialogue with its stakeholders will struggle to meet their needs.
KPMG and RA have worked together to help our clients take a more consistent, unbiased and in depth view of their relationships with key stakeholders. Perhaps most importantly, KPMG has used this approach to help clients understand and influence the drivers of effective relationships with stakeholders to promote better, higher quality dialogue that helps both parties meet their needs.
Our approach to measuring the effectiveness of relationships (the Relational Proximity®), is designed to analyse relationships across five drivers, which characterise all relationships whether between organisations or individuals. It is this tool and these drivers that KPMG and RA use to analyse clients’ relationships with their stakeholders and then work with them closely to enhance future performance.
KPMG has worked with clients to help them:
- Understand their business critical relationships and identify specific actions that can improve these relationships. By measuring the ‘distance’ in the relationship between two people, groups or organisations, we can determine how well each can understand the intentions and performance of the other.
- Identify the opportunities for taking greater responsibility in the effectiveness of their relationships – the more remote decision makers from other stakeholders, the less they feel responsible for them. Through greater proximity, groups can understand and interact with each other more effectively.
- Provide those in a relationship with the language to measure, explore and understand the 20 different drivers that can impact the effectiveness of that relationship.