“Legacy relationships” in your business, policy and civic budgets can cause more than financial hardship.

 You have an “anti-stakeholder” group stuck in your budget.  Ten years ago, a relationship manager in your company arbitrarily made a contribution to this nationally recognized organization. 

Pin The Tail on The Stakeholder -- Oops!

There were no strings attached – no joint programs, no sponsorships, no specific policy initiatives that were discussed…  And yet, you have nothing in common with this organization…

 The original relationship manager is now in some other division – or they left the company altogether – and nobody remembers how the relationship actually got started to begin with.  And every year, the group comes back seeking more and more money!  They are classic “anti-stakeholders”.

Not ALL Increases Are Good!

The only thing your management DOES REMEMBER is just how much that relationship has cost.  Because the cost is not just the amount contributed this year… 

It’s the amount contributed over TEN YEARS, plus the lost opportunity cost resulting from your organization’s inability to refocus that money where it might actually do some good.  Either from the standpoint of a major corporate initiative, or in terms of your policy priorities…

A Relationship That Should Never Have Been, Gone Wrong…

The problem is that this “anti-stakeholder” has now become the “pet” of several very influential elected officials, who are in very safe seats and are not going anywhere for the foreseeable future. So TEN YEARS of giving is beginning to look like FIFTEEN YEARS with no tangible benefits…

Nice Bear... Friendly Bear... Gulp!

You’ve approached the group’s leadership about a joint study, some form of sponsorship, or other program. Anything to recoup some value for the tens of thousands – even hundreds of thousands – that have been squandered on them. Except, by now – having gone through several relationship managers from your company – the organization’s leaders feel pretty safe, especially with their newfound political muscle, to just brush you off… They’ve even made it clear that they would not take kindly to a withdrawal in your financial support.  Your management feels like they are being robbed at gunpoint. And they should!

Your Organization Is Being Held Hostage By A Stakeholder

Ten years ago, someone didn’t do their job and now you and your company are being held over a gun barrel… This is a classic case of an “anti-stakeholder” relationship that has been left unattended and allowed to become embedded in your funding structure – even to a certain extent protected by people who fear that an abrupt change to the relationship will cause ill-will at a time when you can least afford it. Especially with a piece of legislation of major importance to your company just a few votes shy of a floor vote in both houses of Congress, where this organization has some really important friends…

 So What IS Your EXIT STRATEGY For This Group?

This group is not just keeping you up at night. It’s got you popping antacids left and right. Your hair is visibly graying. And every day you don’t address the situation things are just getting worse. At stake is a reputational disaster that can cause real legislative and financial harm to your company and a real threat to YOUR JOB… 

We All Have To Go Sometime... Some Of Us Get To Choose How...

This group clearly needs to go away, but there appear to be clear risks associated with making that decision:

On the one hand, your budget has been slashed over the last couple of years and this organization is taking up a major chunk of your existing financial real estate. In fact, your CEO intentionally cut your budget because they don’t see that it’s being managed the way it should and this is their first major warning: Fix this mess, or else…

On the other hand, the group has made it clear that if you just withdraw funding tomorrow, you are going to have some seriously angry people saying some seriously nasty things about your company.

And your legislation is going to die a quiet death until the next session of Congress convenes in TWO YEARS…

 Don’t Let This Happen To YOU

 There is a way out of this that can be a win-win for everyone involved. If you don’t know the answer, then give me a call and let’s chat… Because I’ve been there with dozens of major organizations: All “legacy relationships” costing hundreds of thousands of dollars PER YEAR. And all were quietly put to bed, without so much as a whisper of discontent.

 More importantly, just what ARE you doing to assess the strengths and weaknesses of your relationship portfolio so that you can avoid one of these icebergs cutting across your bow? Are you effectively able to shift major portions of funding around on an annual basis without causing reputational risk to your company? Or are you locked into multi-year commitments that limit your flexibility to move resources to where you need them most?

For a free assessment of your stakeholder portfolio and a consultation on what you can do to get your budget fully aligned with your organization’s priorities, call me at 203-727-7868, or e-mail me at jslavitt@joshuaslavitt.com.