Michael Dell and Boris Johnson.

Managing expectations is a key part of effective stakeholder and reputation management because it’s about building and maintaining trust for a long-term constructive relationship.

In his 1999 business autobiography Direct from Dell, Michael Dell says one of his key principles from the start was always to underpromise and overdeliver. This was revolutionary at the time (the 1980s) when many companies would routinely make big promises to consumers in order to get sales and regularly not be able to deliver on items such as delivery dates. Sadly, many still do today.

Why was Dell determined to do the opposite? He recognised that to build a global brand and stay ahead you need to build and maintain a class-leading reputation in key areas such as product performance and service – the key deliverables for buyers.

Danger

The danger with the traditional overpromising compared with known capability to deliver was the emotional and reputational outcome of failing to deliver on the promise. ]

Rather like Mr Micawber’s two budget scenarios – “Annual income £20, annual expenditure £19, 19s, 6d – result happiness. Annual income £20, annual expenditure £20, 0s, 6d – result misery” – being promised delivery tomorrow but not getting it leads to a negative emotion, creates an unhappy customer, far less likely to buy from you again and very likely to tell others of their negative experience.

You can’t grow your brand or company if the talk around them has a significant amount of negative experiences – think how a few bad Google, Amazon or Trip Advisor reviews will make you look to another potential new supplier.

Success

Dell’s success with managing delivery date expectations has transformed the order delivery market – Amazon now routinely first notifies an expected delivery date later than they may be able to achieve in order that when they beat it the result is delight that the set expectation was beaten (overdelivery), rather than ‘ok, it arrived, as promised’ (expectation just met).

By contrast the UK Government has during the Covid-19 epidemic developed the bad habit of overpromising and under-delivering.

While it did deliver the Nightingale hospitals on time, several other times it has gone for the big positive, impressive headline in the media by promising it would achieve something important and impressive. Each time, after the deadline it’s clear it made the promise before it could be confident it could deliver on the promise – demonstrating the appetite for risk / willingness to take on big challenges in uncertain times even with life-or-death which has been one of the hallmarks of the Brexiteers.

Testing promises

With English Covid-19 testing capacity, the promise to carry out 100,000 tests a day by the end of April led to it having to redefine what counted as a test done in order to meet the target – including home tests sent out (but not carried out, returned or result reported) antibody and research tests, some of which were repeated tests on the same person. They’d already made the same mistake with a PPE delivery target and used a dubious metric definition to claim victory – e.g. treating a pair of gloves as two items.

As soon as the ‘moving the goalposts’ over testing became clear, it resulted in a loss of credibility and scepticism of all numbers reported by it as well as a later rebuke by the UK Chief Statistician for data reporting methodologies being mainly about reporting the biggest number possible.

Worse, it then did exactly the same thing the same way over the 200,000 tests a day target set by Boris Johnson, although this time it had the sense to set the goal for testing capacity of the system, rather than the number carried out (it should have done that with the first one to avoid having to redefine what counted).

Disasters

Despite these two disasters for reputation and trust, they then made the same basic mistake over the Test, Track and Trace system – promising a “world-beating system” and app by a future date when it wasn’t clear it could be delivered at the scale promised by the sate with the new and tricky technology.

Again, it managed to do enough on the system to be able to say it was running, but subsequent reports show you couldn’t credibly say it meets the scale of the promises. It later had to U-turn on the technical approach with the app, which has still to be delivered.

Only yesterday, Boris Johnson made another failure to deliver on a big promise – having briefed the media on how its ‘Build Build Build’ programme would lift the UK’s battered economy, what he delivered was a £5bn set of promises which amount to announcing earlier delivery of infrastructure projects which will take years to build and more still to see the benefits of. Nothing like the FDR New Deal briefed to the media beforehand to set expectations.

Why managing expectations matters

Why failing to manage expectations matters is that keeping promises is vital for gaining and retaining someone’s trust.

If you lose their trust, stakeholders will at best be sceptical of future promises, so you will get diminishing returns on future announcements affecting them.

They will develop a negative view of your organisation and your ability to influence that or their behaviour will be lost. So where they affect your ability to achieve your goals, you will have no capability of influencing what view they take and what they do.

Worse, the bad reputation you gain will affect the view of other stakeholders. Rather than starting as open to persuasion, they will start as sceptical, making the job of making them a group you can get to accept or help with a goal longer, harder and more expensive.

What to do instead

By contrast to promising something you’re not certain you can deliver, a proper, structured professional stakeholder management programme aims to build constructive relationships with individuals who can have a positive or negative impact on your organisation’s reputation.

Through structured analysis and engagement, positive relationships built can allow you to more easily achieve your goals with their help.

Here are some tips on how to manage the expectations of and relationships with stakeholders:

  • Realistically assess your capabilities now and in the future after any planned investment
  • Carefully word promises you make to key stakeholders to ensure they are deliverable most of the time. Be realistic. Talk about aiming to or setting goals, not ‘we will’. Confidence comes over well, but the moment it isn’t delivered on, it becomes a negative and puts you back before Square 1 – having to make up for a negative, rather than starting from no feelings either way.
  • Include caveats for likely scenarios where your ability to deliver won’t be up to standard.
  • Don’t overpromise – Giving hostages to fortune can turn them into sticks for your rivals and detractors to beat you with, as well as creating that bad emotion for the stakeholder let down. If in doubt, only promise what you’re sure you can. Or say you’re unsure but will update when you know.
  • As soon as you know you will not deliver on a promise, inform the stakeholder, apologise and give them updates whenever you have them. Saying sorry is vital. It doesn’t admit legal liability, but it will help stop you making things worse. Silence in this scenario is not golden – it’s filled with negative assumptions, many of which these days will be shared on social media and amplify your failures.
  • Quickly deliver refunds if they’re due – look at the negative media coverage travel firms got for denying or seeking to delay refunds travellers were legally entitled to as well as trying to fob them off with vouchers or future bookings at higher prices.
  • Offer something to compensate for your failure – it doesn’t have to be financial. The biggest damage to your reputation will be from the emotional damage in your relationship with the stakeholder. Something to make them feel your brand really wants to make it up to them will go a long way to mend things and get you back on the road to being trusted again.
  • Stop digging – a bad supplier who is tone deaf to the fact their credibility to deliver your product or service has gone doesn’t see that an attempt to gain your trust again by creating new hope with a new promise just makes things worse when they fail to deliver on that too. Don’t ‘double down’ on a failure (as politicians do to avoid admitting a mistake), bin the undeliverable promise, stop digging and start working on identifying things valued by your stakeholders which you can deliver on start to repair the relationship.
  • Learn the lessons from your ‘delivery failures’ to avoid repeated failures – have a Continuous Improvement Programmes (CIP) which looks at why things failed and amend your processes, resourcing and capabilities to avoid the same failure again. I introduced one at St Andrews Business Club which helped it not only sort out detail issues at events, but also find ways to improve them. Attendee feedback improved markedly and out events gained an excellent reputation.

For other things you should be doing, see also my earlier blogs: