Turnaround stakeholder management
Obtaining and retaining stakeholder support
In a distressed company situation, stakeholders typically have lost confidence, and are concerned about their own risk exposure to a failure of the company.
Turnaround management will fail unless stakeholders advocacy ensures that support for the turnaround strategy is obtained and retained.
Stakeholder management is aimed at achieving awareness, involvement, buy-in and ownership from all the constituencies affected by the distressed company's turnaround situation.
Rebuilding and retaining stakeholder support are built on two change management principles:
- Mobilising stakeholders, especially employees, around active participation towards achieving aligned turnaround objectives.
- Clear, unbiased and open communication, and full disclosure about the existing situation, turnaround strategy and action plans.
Stakeholder management typically involves progress reports, regular structured feedback to shareholders, lenders and staff, as well a road shows, notice boards communications and newsletters.
Stakeholders
The distressed company faces three sets of stakeholders:
Capital market stakeholders:
- Shareholders
- Banks
Organisational stakeholders:
- Management
- Employees
Product/market stakeholders:
- Unions
- Suppliers
- Customers
- Government
- Host communities
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Stakeholder management ensures support for the turnaround plan.