Lessons from the Fonterra debacle
Fonterra has been the talk of the town for the last week. I was at my son’s class breakfast on Friday and even there the Paul Henry Interview with Fonterra’s CFO was the hot topic of discussion a few days after it even aired.
As far as I am aware, none of those people are suppliers who are directly impacted by the changes to payment terms but like most of us, they all felt a certain level of emotion, mostly negative, around the debate last week and it shows the importance of having very robust, open and authentic relationships with all your stakeholders, in good times and bad. As consumers of Fonterra brands and by way of simply being New Zealanders, a lot of people feel let down by Fonterra and their actions.
If you think about your interactions with people like an emotional bank account – every connection you have with someone has the ability to “top up” that account, yet a bad experience can also reduce your available balance. One of the key objectives in any relationship is to have your account in surplus but this takes time, hard work and an openness to learn and change. A good surplus however will set you up better to weather the storms that will inevitably come for any business. In Fonterra’s case, it would appear that poor, one-way communication over time has left famers and suppliers with very empty bank accounts (potentially both emotional and physical if the terms of trade tales are true) and as a result the reputational damage for the Fonterra brand is now more widespread than just those who are directly affected.
So what can we all learn from this:
Two ears, one mouth – Take time to talk with, not at, your stakeholders. Listen to what is important to them. It is also vital to think broadly about who your stakeholders are – as the Fonterra example shows it is not just suppliers, customers, retailers etc who will have an opinion on your brand/company it could be the wider community.
Think big, start small – Once you know what really matters to your stakeholders, the key is to prioritise the opportunities that you have identified. Rome wasn’t built in a day so this is about long term commitment but don’t be afraid to try a few things to see what works. Collaboration with a small handful of stakeholders at this stage is a great way to ensure the outcomes are meaningful and mutually beneficial.
Don’t just sit there – Act because you want to, not because you have too. What you do needs to be genuine otherwise people will see straight through it but with the right insights and a clear set of priorities you are better placed to engage more authentically with people. If you collaborated well at the “think” stage chances are you will already have some ambassadors of sorts in the people you partnered with, so think about how you can get them to help you put your plans into action. Personal endorsement is one of the most powerful tools you can have!
Make it a rule - This is not a one off, tick the box, done approach. One piece of good communication from Fonterra right now would be like a drop in the ocean. This ‘ear to the ground’, collaborative approach needs to be a continuous cycle so that you can evolve your strategy to reflect the changing environment and demands of your stakeholders.
The old saying – treat others as you would like to be treated yourself provides a perfect summary of why this more open, transparent and collaborative approach to communication is so important for all brands and businesses these days. After all, respect is earned not given.