Friends & Friction: Spin doctors now deal with savvy, clued-up communities

Public relations is dead. The communities in which businesses operate have wisened to the polished words of spin doctors.

They now scrutinise the collective actions of the corporation, its directors and its employees, and so the relationship between companies and the world is no longer shaped by clever advertising and public relations strategies.

In a nutshell, the world of business has evolved from the industrial revolution, where shareholders called the shots, past the service revolution where the customer was king, to a new economic reality where people who neither own nor buy from a company can drastically affect its business.

The problem is that most business leaders are not equipped with the necessary skills to build and nurture these relationships. Their view of the corporate world focuses on the stakeholders who have the power to hire and fire them. This short-termist view harms the business in the long run.

The King IV Report on Corporate Governance seeks to change that by highlighting that the interests of shareholders and those of stakeholders are interdependent.

Indeed, a company is a provider of employment.

You just have to drive through towns such as Carletonville and Welkom to see the devastation that came with the closure of gold mines. If the owners of those mines had had a long-term view, and imagined what would happen to those communities when the companies ceased to operate, they could have avoided the current suffering.

The failure of those companies has had an impact on those communities.

When many migrant labourers were terminated, they couldn’t bear the pain of going back to their rural homes without a job. So they stayed.

Where men have money and ample time, a shebeen will always pop up, supplying the booze and the girls.

In no time the migrant labourer has gone through whatever little money he had and has even less desire to return to his family.

He drinks his life away, often getting drunk on leftovers until he becomes what is called isibotho, a word that has its roots in ukubola – meaning to rot. That is how modern societies rot — when there is no profitable employment for its young people.

Many companies offer products and services that may be crucial to society, such as medicines or dental services, but some offer us the fullness of life. Can you imagine a childhood without chewing gum — that mindless chewing that gets you into trouble with parents?

Perhaps some day psychologists will discover that stepping on chewing gum on a hot day is good for a child’s problem-solving skills.

The business of banking provides funding to entrepreneurs when they want to create wealth. It also helps them preserve it.

In the modern economic world there is no progress without a robust banking system, and so banking has become too important to be left to the bankers and their shareholders alone.

These organisations are too big to fail. When they falter, the government has to step in to save them.

Like most well-meaning initiatives, many of the stakeholder models that have been presented are thin on what happens when there is a clash of stakeholder interests.

They also don’t take into consideration the unreasonableness of human beings, their gluttony, greed, fear and all other vices that characterise our species.

A friend of mine who has worked in stakeholder management for more than 20 years likes to simplify the concept.

Take a family setting, she says. Children are major stakeholders. But parents don’t consult them when they want to make another baby. But when the children want to get married, they have to consult their parents.

Stakeholder management is the art of understanding those power balances.

Kuzwayo is the founder of Ignitive, an advertising agency