First area of leadership expertise entails understanding how to make the right promises. A business leader’s primary role is to make balanced business promises and fulfill them.
Such promises include those made to investors and lenders in order to secure and keep necessary financing, those made to customers in order to maintain loyalty, those made to employees in order to recruit and retain talent, and those made to suppliers in order to ensure continued partnerships.
The business leader sits at the center of four categories of stakeholders: customers, investors and lenders, employees, and suppliers. Leaders must negotiate expectations and promises, as well as ensure the delivery of promises between themselves and each group.
Because transactions with customers provide the company with sustainable funding to pay employees and stakeholders, rebuilding relationships with customers is central to the success of the recovery plan. Importantly, leaders must ensure that promises made to customers are also smart business decisions. Promises should provide customers value, result in profit for the business, and produce enough money to deliver promised returns to stakeholders.
This could be analyzed through a tool which encompasses four parameters: 1) quality, 2) value, 3) service, and 4) innovation. Leaders should anticipate customer concerns about these four parameters. Customers may ask themselves if product quality has changed; if the company will continue to support, trade, and provide post-purchase service for the product; and if development support or upgrades for the product will remain available. When considering the vital relationship with customers, business leaders must carefully plan the promises they make when attempting to regain and maintain customer trust and loyalty.
After focusing on rebuilding customer relationships, leaders should reexamine promises to investors and lenders. Investors and lenders provide the funds businesses require to operate, including bonds, equity, and letters of credit. While promises to investors and lenders once consisted primarily of financial assurances, these stakeholders have become more interested in the reliability of the supply chain and in the brand itself. Stabilizing relationships with investors and lenders is fundamental to ensuring the funds necessary to recover from a crisis.
Next, business leaders should focus on promises made to company employees. Promises made to employees extend beyond compensation; they also include an equitable work environment and professional development opportunities. Leaders should understand that rebuilding and maintaining trust with employees after a crisis is fundamental to moving forward, since employees are central to planning and implementing the recovery.
Finally, leaders should consider the standing of their suppliers. Suppliers includes both trade suppliers and those who insure their credit. Additionally, suppliers may include any regulators or government agencies that provide operating licenses.
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