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Win more favorable stakeholder opinions

01 Jun, 2020 Reputation, trust, stakeholder relations

Persuasion scientists Steve Martin and Noah Goldstein recently discussed two ways to use social psychology to influence people – stakeholders – to form a favorable opinion of you and your organization or client. A stakeholder is any person, group or organization who can place a claim on an organization’s attention, resources or output, or is affected by that output. They have a stake in the organization, something at risk, and therefore something to gain or lose as a result of corporate activity. This applies at the individual level as well.

Firstly, a little self-deprecation goes a long way. Warren Buffett, probably the most admired businessman in the world, has been writing an annual letter to shareholders every year since he and his co-chairman, Charlie Munger, took over Berkshire Hathaway more than 50 years ago.  An investment of $1000 in his US company at that time would be worth $180,000 today, an average compound growth rate of 21.6% per year. Stunning results.

Buffet uses a wonderful piece of self-deprecation early in his letter every year.

For instance, he started his 2014 letter (his best, according to Bill Gates), with the remark, “It was a good year for Berkshire on all major fronts, except one. Here are the important developments:” Then he continues on to summarize 11 key performance points of that year.

In the second of his points he says, “Our bad news from 2014 comes from… During the year, [name] disappointed many of its customers…”

Nearly all companies present only the good news to their shareholders while hiding their failures. [I’ve worked for several during my own career, including a company in which the managing director declared it was his official policy for company newsletters to only run good news.] Mr. Buffett, instead, draws attention to a downside early in his address. Is this a mistake?

Not at all.

Photo opposite: Warren Buffett and Bill Gates

Persuasion scientists know that the impact of a communicator’s message can be increased by first presenting a small drawback or weakness in their case.  Surprisingly, this action produces a higher level of trust. People respect us more if we appear honest by admitting mistakes up front.

However, an early admission of a weakness will not be enough to change the way people think of you. People also need to feel that you have the necessary skill and experience to fix the problem. After all, a trustworthy idiot is still an idiot!

Similarly, if you start a speech with an apology on the basis that being candid will make you more appealing to your audience, people will not be impressed if they think the problem should have been anticipated or fixable.

The lesson, therefore, is to admit mistakes, but show that you know how to fix them and that you have taken action to do the fixing.

Third party endorsement

Secondly, in public relations we know that third party endorsement is a key technique to earn credibility with stakeholders and publics. Third party endorsement effectively provides a recommendation or ‘seal of approval’ from experts or well-known, respected persons. This can also be achieved through good rankings in industry surveys and awards.

For instance, studies led by Stanford University’s Jeffrey Pfeffer found that arranging for another person to praise you is effective even if that person is perceived to also gain from giving that praise, such as your book agent.

Arranging for someone else to introduce your background, experience and expertise can improve the way people think of you – and increase your commercial success. In one study conducted with a real estate firm, the impact was measured of a receptionist presenting a colleague’s credentials and expertise before putting through a call from a prospective customer.

For example, customers calling because they were interested in selling a property were honestly told, “I’m going to put you through to Peter. He is our head of sales and has 20 years of experience selling properties in this area.” The impact of this third party expert introduction was both immediate and impressive. It created a 20% rise in the number of face-to-face appointments arranged. Also, there was a 16% rise in the number of callers who appointed the firm to act for them.

In the same way, it is much better for someone else to introduce you and give a little background information before you give a speech or speak to a group.

Testimonials are proven to be a powerful third party endorsement as well. That’s why I quote satisfied purchasers of my e-books and readers of my newsletter in my website, cuttingedgepr.com.

Questions

By pausing to ask yourself these questions below, and applying the answers, you can use the two techniques to clearly help you achieve higher standing in the eyes of others for yourself, your organization and your clients:

1.      What expertise or achievements do you have that someone else could communicate to others before you interact with the others?

2.      Who would be suitable to communicate your positive attributes instead of you?

3.      How could you communicate positive information about yourself without actually doing the communication?

Photo by Steve Johnson on Unsplash.

About Kim Harrison – author, editor and content curator

Kim Harrison, Founder and Principal of Cutting Edge PR, loves sharing actionable ideas and information about professional communication and business management. He has wide experience as a corporate affairs manager, consultant, author, lecturer, and CEO of a non-profit organization. Kim is a Fellow and former national board member of the Public Relations Institute of Australia, and he ran his State’s professional development program for 7 years, helping many practitioners to strengthen their communication skills. People from 115 countries benefit from the practical knowledge shared in his monthly newsletter and in his books available from cuttingedgepr.com.

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