‘ Effective stakeholder management key to business success’
THE Group Managing Director of Dangote Industries Limited, Olakunle Alake has hinged success of business organisations on the adoption and implementation of effective stakeholder management strategies.
Speaking on ‘ Stakeholder Management: The CEO’S Role’, at the Global CEOAfrica Programme, a collaboration by the Lagos Business school, IESE Business School, Barcelona and Strathmore University, Nairobi at the weekend, Alake identified effective management of all stakeholders as a critical factor to achieving an organisation’s aims on the global business landscape.
He urged Chief Executive Officers ( CEOS), who are determined to succeed to identify stakeholders, who are critical to the success of the organisation and start engaging them.
Alake listed the stakeholders to include owners/ investors, government officials, regulatory bodies, consumers, staff, distributors, and host communities.
While tasking the CEOS, he said, “Put together a team to handle stakeholder relations; the team should include people with adequate international exposure and people with local exposure. Also, determine and know what the critical stakeholders want; and, more importantly, know what they do not want. Most importantly, you must be seen to align with local policies, and the country’s aspirations. This builds a healthy relationship as well as provides a feedback mechanism. It also provides market intelligence. Also, constantly interact with your stakeholders.
He defined stakeholder management as the process of organising, monitoring, managing and improving relationships with people who have vested interest in the business or organisation. “Stakeholders have vested interest in the organisations as they depend on them to fulfill their personal goals. Staff depend on business organisations for their wages; suppliers for businesses and contracts; communities for life- changing projects, and government agencies for taxes and revenues”, he added.
Alake stated that effective stakeholder management strategy helps develop and maintain relationships with all parties, mitigate risks, align business goals and eliminate delays. “Activities of stakeholders, whether as staff, government functionaries, tax authorities, regulatory bodies, customers, distributors or suppliers have a lot of impact on the organization.”
“Their activities can promote and sustain the organisation. In the same manner, their activities can pull down the organisation. For example, if an organisation is having a running battle with the tax authorities, it is possible that some sections of the media will pick the story that the organisation is avoiding tax. Civil Society organisations may decide to picket the organisation and cause a loss in customer base,” he said.
Speaking on how the Dangote Group has been able to manage both internal and external stakeholders across Africa, Alake explained that the company consistently interfaces with stakeholders across diverse cultural backgrounds in all its areas of operation.
He disclosed that the company has operations in Congo, Ethiopia, Zambia, Tanzania, Cameroon, Senegal, South Africa, Ghana and Sierra Leone. “Construction is ongoing in several other countries. We have adopted strategies to enable us manage the diversity in regulation, labour, regulation, tax regime and legal system across all our areas of operation”, he added.
He advised CEOS to expect diversity in regulations in its effort to manage stakeholders. “We have seen that stakeholders in different countries have expectations of what the Group should do or offer but the expectations differ from country to country. Hence, the approach to meeting expectations in each country is different and tailor- made for the country. We relate with stakeholders in the countries where we operate and try to meet their expectations.”