How To Create A Meaningful Stakeholder Engagement Process
The message has never been clearer. You must take stakeholder engagement seriously to survive as a business in this increasingly CSR-conscious world. There’s no question about it, particularly if your company is planning to launch new products or services, target new geographical markets or start operations in new territories; or is facing a tricky CSR challenge.
Research conducted by SustainAbility, an independent think tank and strategy consultancy showed that:
• 60% of consumers admire companies that appear to be taking action on the environment;
• 90% of investors said that environmental and social governance factors would have an impact on the value of a company; and
• 91% of people believe that working for a ‘good’ company serves as an extension of their personal branding as an ethical person.
Without question, CSR is becoming a vital issue for all stakeholders -employees, consumers, suppliers, NGOs, investors and your local community.
If you are effective in your stakeholder engagement, you will open new ways to improve your organisation’s performance and reputation. Of course many organizations interact with their customers, employees, suppliers and investors every day, usually unplanned and in rather informal ways however, over the last five years there has been a shift for organizations to carry out systematic stakeholder engagement, to help understand the perceptions and expectations of stakeholders and create open dialogue with them.
Two-way dialogue with key stakeholders on current or emerging issues is important in identifying risk and in developing responsible business strategy, providing organizations with valuable insights that enable them to determine whether perception really does match reality.
Successful management thus becomes the art of optimising long-term benefits for the organisation based on reconciling sometimes disparate stakeholders’ wants and needs (investors, employees, customers, suppliers etc.).
However, what are the conditions for meaningful engagement by more effectively recognising, analysing and utilising opportunities for and challenges to building relations? As well, what are the key issues above and beyond the simple identification of stakeholders and immediate ‘unprepared’ initiation of conversations?
Well, there are some golden rules, for instance:
• Your organisation should engage with stakeholders sooner rather than later. It should know the critical success factors in meaningful engagement and how to build the right conditions and capacities for meaningful relations;
• An important component of success is internal alignment of your Corporate Responsibility (CR) and Business Units in expectations, roles and outcomes. Being flexible will help achieve this, as will appreciating different viewpoints, pressures and business objectives that your CR team and Business Units may have;
• Your organisation’s culture will have an impact on how stakeholder engagement occurs (i. e. autonomy for local adaption and local relevance). Therefore, assessing culture is important for identifying enablers and barriers to your stakeholder;
• Gender can sometimes be critical. In some cultures and in some parts of the world, how women interact may be different to men, and consideration should be given to setting, mode of consultation and fair representation;
• Assessing past non-productive engagement behaviour will help your organisation to learn from past experiences. It is important to collate this information from both the organisation and stakeholder viewpoints;
• Recognise the interplay and, therefore, influences between leadership, organisational behaviour and capabilities in creating strategies, processes and procedures;
• The ‘tone from the top:’ the role that leaders play is fundamental in building meaningful engagement. An appropriate role for your CEO may be to be actively involved in the initiation of the stakeholder engagement strategy and engaging with key global stakeholders; and
• Understanding and being transparent about the motivation of both stakeholders can help your organisation overcome differences. Recognise that the fundamental motivation of each side may be very different, but understanding and articulating this can help close this gap. Your organisation needs to recognise the importance of stakeholder views and engagement. It is critical that your organisation as a whole appreciates the contribution stakeholder engagement gives to overall business success, and that it is not just an “add-on”.
In conclusion, when organisations do engage successfully, it can be a win-win for business and society.
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