Stakeholder Management – When There’s a Change at The Top

Changing Prime Minister looks increasingly like regime-change, but such a process of abrupt change is not really unique. Lots of organisations undergo dramatic changes of leadership from time to time, leaving staff and stakeholders struggling to understand and work with a change of direction.

So how do relationships respond to such events, and does the Westminster soap-opera offer us clues as to what is best and what is worst in volatile situations?

Everything is less stable now

The first is to recognise that everything these days is less stable.

Any Chief Executive or Government Minister that launches a ‘Ten-year plan’ should be doing so with fingers crossed behind the back. Whatever the discipline. Which is tough when the issue fundamentally requires long-term thinking.

In the last year we have had such strategies for the NHS and for national infrastructure.
Quite rightly, their aims are to help stakeholders plan their activities based upon declared and firm assumptions – effectively saying “This is what we intend to do; now you go and do your stuff..”.

Arising from this, commercial Companies will develop products or services, recruit staff and/or make serious investments. Public bodies will similarly develop policies, secure skills and organise themselves to deliver.

What goes wrong is that unforeseen events can get in the way, and leaders frequently find themselves hamstrung in responding with flexibility because they are too committed to that blueprint. In politics, there is no better current example than the Labour Party’s problem with the 2024 election Manifesto.

But in business too, there are Chief Executives who pledged financial results based on a strategy which their shareholders approved. In both cases, it is understandable that there is a reluctance to abrogate promises made even though times have changed.

The dreaded word ‘U-turn’ comes to mind, with stakeholders having to be told that what was near to gospel yesterday no longer applies today. The media loves the drama for it enables them to play on the age-old themes of deception and betrayal. Sustaining confidence and trust is inevitably a challenge with this type of situation.

The answer is to move away from dogmatic promises and unbreakable commitments. Seek instead to rely on ‘current best guess’, sincere intentions and a promise to consult on significant changes.

Anticipate change and prepare

The second is to anticipate change and be prepared. The current political hiatus has not emerged out of a clear blue sky – the indications have been there for many months. Yet there is a fine dividing line between quietly thinking through the ‘what ifs’ of a possible change of direction and open, transparent activity that can easily be viewed as treachery. Ten years ago, David Cameron famously banned the civil service from undertaking any contingency planning for a ‘Leave’ decision at the 2016 EU Referendum; so unlikely did he consider such a result. It was seen as if the PM had insufficient confidence in his recommendation to “Remain’. Today, leading commentators blame this decision for two years of subsequent dithering – though I am not convinced.

For stakeholder management, it is unwise to depart from the ‘party line’ in any formal communication. But dialogue offers different opportunities to mull over plans, assumptions, risks and opportunities. The advent of AI alongside the formalisation of much documentation is, counter-intuitively, placing a new premium on face-to-face conversations and social interaction. In the quiet recesses of conferences and deliberative events, it is possible to canvass ideas that dare not be published but help think through potential upheavals. Ask any experienced diplomat.

Being fully prepared needs some research. It has never been easier to find what key people have said and done in previous years – often to their embarrassment. Journalists thrive on such revelations, but serious relationship managers need skill to discern what will be significant, and what is irrelevant or spurious. This matters as much in local as well as national government – and inside any large organisation where office politics can be just as brutal.

Know where 'business as usual' still holds

The third clue on responding to changes at the top is to identify where ‘business as usual’ will still hold good. Many leaders over-estimate their power to change things. In fact, organisations build a culture and a reputation over many years, and a change of leader rarely makes an instant impact. Maybe just as well, because their tenure may be short-lived!

This is not a case for working against a new direction of travel, but it’s important to recognise the long-term nature of some of these stakeholder relationships. Some can withstand abrupt course alterations better than others, but this may depend upon the impact of what changes upon that stakeholder. If it has lost money through a now obsolete investment, don’t expect a sympathetic response. If the change has no serious effect, presumably the relationship should not suffer.

The difficult scenario is where no-one is quite sure what a new leadership will mean – precisely the situation that has occurred in recent days. Maybe Burnham will do this? Or do that? What is he brings back Mrs X or Mr Y? What will that mean? Such speculation may keep the podcasters and commentators happy for hours but can be deeply unsettling for stakeholders - both individuals and organisations and will have the effect of postponing decisions on both substance and process. Even the most improbable theories can thrive in such a febrile environment; misinfornation can cause huge disquiet and worry many people.

The truth is slightly less dramatic. While everyone focuses on the relatively few high-profile headline items that will change, much else will continue as intended. This is not just inertia; no-one has the bandwidth or the capacity to change everything all at once. Smart Managers recognise that a semblance of normality can be valuable, especially for nervous or deeply anxious stakeholders.

In summary

Stakeholder Managers have to tread a narrow tightrope when leadership changes feel imminent. Regime change does not always happen. Yet mis-steps in handling sensitive relationships can affect business or political dealings for years to come. To manage these in turbulent times demands skill and the ability to exercise fine judgements, supported by the most effective systems possible.