‘Smart’ companies can predict problems before they arise, says reputation bulldog

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Saturday, November 12, 2022 8:44 a.m.

City today met Alberto Lopez-Valenzuela, who was until recently CEO of alva, which merged – along with five other City companies – with Penta two weeks ago.

AM City revealed two weeks ago that six companies agreed to merge into a new stakeholder solutions entity backed by Falfurrias Capital Partners.

The relatively unusual merger, given that six separate companies managed to reach a merger agreement, involved Ballast Research, Hamilton Place Strategies, Flag Media Analytics, alva, Gotham Research Group and Decode_M.

The companies shared with this document that they have officially renamed and launched Penta, a stakeholder solutions company combining intelligence and strategy capabilities.

time for AM City to sit down with Alberto Lopez-Valenzuela, who was until recently the CEO of one of the six merging parties, alva.

Referring to the much-talked-about deal, Lopez-Valenzuela this morning explained the idea behind the new combination: “There is growing recognition among the C-Suite of the significant impact stakeholders have on the business. and its ability to create value.”

He added: “With this recognition comes the need for an integrated and connected approach to stakeholder solutions.

After the merger, the combination employs around 200 people in London, New York, Washington and San Francisco.

It is likely that more agencies or units will be added as Falfurrias Capital Partners seeks to make more acquisitions for Penta so that it “can extend the global reach of the business”.

Penta will be led by Chairman Matt McDonald, previously a partner at Hamilton Place Strategies for over a decade.

“By combining intelligence tools with advisory capabilities, we will work with our clients to help understand, predict and mitigate the impact of stakeholder issues, as well as enable understanding between business leaders and their parties. stakeholders,” continued Lopez-Valenzuela.

Stakeholder issues

What does City veteran mean by issues with stakeholders?

These issues can be environmental, they can focus on business ethics, employee welfare, or any other issue that impacts stakeholder expectations, Lopez-Valenzuela said.

“But they happen when there is a gap between stakeholder expectations and corporate behavior.”

When this gap occurs, stakeholder resistance increases and hence the cost of doing business.

“Indeed, in the worst-case scenario, they can have a debilitating and disruptive impact on corporate reputation and finances, which can even lead to the downfall of leading companies,” he pointed out. .

While these issues are seemingly driven by changing social trends and the activism of pressure groups, Lopez-Valenzuela was quick to point out that corporations can impose order on these issues.

It seems that problems generally follow the same life cycle.

A problem may be dormant for a time but may suddenly, as a result of a change in society, become something that causes considerable change and potential damage.

“Smart companies can predict problems before they happen, by monitoring the right stakeholders.”

Alberto Lopez-Valenzuela

By bridging the gap between stakeholder expectations and business behavior as early as possible in the issue lifecycle, they can avoid crises, he said.

“That’s why the most important phase of the issue lifecycle is the first one: potential issues.”

Lopez-Valenzuela emphasized that “in the first phase, we can identify potential issues before they affect the organization and connect with stakeholders to better understand their expectations.”

To achieve this, companies need to put in place a data-driven problem management process, he explained, “so that they address the risk of the problem becoming a reputational or operational crisis.” .

Gap

At the heart of an issue management process is stakeholder intelligence, which can surface issues when there is a mismatch between business behavior and stakeholder expectations as early in the process as possible. problem life cycle.

At the heart of an issue management process is stakeholder intelligence, which can surface issues when there is a mismatch between business behavior and stakeholder expectations as early in the process as possible. problem life cycle.

“An organization must have a connected and coordinated approach to managing issues,” Lopez-Valenzuela explained. “It highlights the need for an individual or individuals within the organization to act as a binding force – to be a binding leader.”

“Connecting leaders can ensure that the functions involved in the organization work together and solve problems jointly by bringing together communications, policy, general advice, sustainability and operations,” he concluded.

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