Wednesday 15 October 2014

Stakeholder Engagement: Six best practices

Six best practices in stakeholder engagement

A CSR Thoughtpiece from the CSR Training Institute
-by Wayne Dunn

I recently wrote a piece on five mistakes companies make in stakeholder engagement and many of you asked me to give a list of best practices.  Here are six.

This list, like the last one, comes from a couple decades of rubber meets the road experience (remember, experience mostly comes from making mistakes or great mentors, or, like mine, both)

Honesty, Trust & Integrity
This is the critical principle and if you don’t get that one right the rest won’t matter.  You may have some short term results but I’m going to be shorting your stock because it’ll blow up sooner or later.  And, if it doesn’t, it should.

In no particular order here are 6 best practices in stakeholder engagement.

Remember, you are engaging with the stakeholders because you believe it is in your interest and that it will help you to create value.  Guess what?  They are engaging with you for the same reason.

Maybe they value a pollution free world or a reduced carbon world or a child labour free supply chain, or maybe it is better schools or hospitals or something else. 

Don’t judge what stakeholders value and what their interests are.  Accept it and, as much as possible, try to figure out how your business, your activity, your work might further your stakeholders’ interests.

Be creative in discovering the value propositions that can align your value and interests with those of your stakeholders.

And be transparent about what your value and interests are.  You stakeholders have it figured out anyway!

2.      It’s OK to disagreebut, disagree without being disagreeable.  And stay curious
You will disagree with stakeholders, sometimes with most of them.  That doesn’t make them wrong, or you wrong.  And no need to be disagreeable.  Stay open, stay engaged, and so important to stay curious.

One of the biggest, and possibly most unexpected, social license wins that I’ve ever been part of happened because the geologist, who ‘got stuck’ with community relations, stayed open, engaged and curious.

This was an exploration project 15 years ago and an, at the time, very small gold producer.  Because it was just down the road from a shuttered mine that had lost its social license the company knew they had to do something.

The opposition that had shut down the other mine didn’t want this one to become the first modern producing mine in the country.  They had won over some of the local communities.

The engineer spent months, many months in the community.  Getting to know the residents, including those who were in vehement disagreement.  Trust developed. Transparency happened.  Shared interests emerged and were built on.

Not everyone agreed, but the mine got built.  Disagreements remained, but people were not disagreeable.  And the company’s share price went from 70 cents to over $20!!  And the local agricultural economy flourished. 

Probably none of this would have happened without a patient, engaged, curious and agreeable geologist.  Bonus for me on this example – my consultancy was providing advice and support and we got to claim some credit for all the great work the geologist did! :)

There seems to be an exponentially increasing list of standards, norms and regulatory requirements for stakeholder engagement and all things CSR [Corporate Social Responsibility]. 

They are important (some of them anyway) so you can’t ignore them.  But, don’t be consumed by them.  If you want stakeholder engagement to add value to your operation and meet your stakeholder’s interests and needs then mere compliance is just the foundation

Figure out what you want to be compliant with, and why.  But resist the urge to embrace more and more standards and norms, to check more and more boxes.

There is a comfort and certainty to compliance.  There are boundaries and a sense of completeness when you know you are compliant with yet another standard.  It is auditable and defensible.

On the other hand, strategic stakeholder engagement is often ambiguous, uncertain and sometimes even downright scary.  There is no certainty of success.

Getting out there and engaging around value and interests, accepting disagreements and continuing to search for mutually beneficial common ground and shared value is not for the faint of heart.  But, it is often where the breakthroughs occur, where value is created and strong relationships developed.

Compliance focus / strategic focus.  It’s not one OR the other.  It’s BOTH.

How NOT to do it, but alas still a common approach!

Spend time thinking about the blend and mixture that is right for your business.  Its and investment that will pay dividends

4.      Share the credit, multiply the resources.  Find partners!
Actually, the foundation of this best practice was set out in #1 Think Value and Interests – and do it transparently.  But it is so important that I decided it had to be listed separately.

This mostly focuses on your initiatives and collaboration with stakeholders, the ones focused on creating value and meeting interests for you and the stakeholders.

If that initiative is successful who else or what else benefits.  Are there other people or organizations that have objectives that would be furthered by success of your collaboration with stakeholders.  If so, they could be potential partners and may well bring financial, organizational, reputational and other resources to the table.

This all sounds a bit academic and theoretical.  What does it really mean?

Say you are a consumer goods company operating in a frontier market and want to increase your local supply chain because it will reduce your costs, add unique marketing pitches to your product, and build reputational capital and social licence.

Or you are a mining company operating in a remote community and want to improve local educational capacity.  Your value and interest in this includes; better educational system makes it easier to attract and retain employees, helps create a more qualified and engage-able local labour force, helps expand local livelihood potential, etc.

Or you are a petroleum company and want to enhance local skills training capacity so you are able to recruit and advance more local workers.

In all of these the value and interests of local stakeholders are self-evident.  And there are many other examples in health care, environment, agricultural development, etc.

The opportunity is in thinking about who or what else shares an interest in this.  Local economic, social, educational and health issues are of interest to national governments, international agencies, multi-laterals such as the United Nations, World Bank, etc., NGOs, National Development Agencies such as USAID, DfID, DFATD, GIZ*, etc. 

They are also stakeholders in the success of your efforts.

Your company’s investment and support in these areas can help these stakeholders to meet and further their objectives.  And they can bring resources and expertise to support your efforts.  Note – the above are all real world projects.

Spend time thinking about who else benefits if you succeed.  Be creative.  Be strategic and remember – broad and inclusive value propositions can create a lot of value for you and for stakeholders (this is a fundamental tenant of Silicon Value entrepreneurship but that is another story…)

One of the great things about finding partners and sharing the credit in stakeholder engagement and CSR is that it is seldom a zero sum game.  By sharing the credit you often get more credit yourself, and more resources to contribute to success.

Communication strategies, methods and tactics will vary from group to group and area to area.  It is more than just words and message.  It is about communicating so you are heard and in ways that connect to the capacities, values and interests of the audience.

Beware of simply meeting narrow, regulatory definitions of who are your stakeholders.

Think outside the box to identify other groups and interests that would benefit from your success.

A good example of this is a real estate project that I am advising.  The project is situated in an area of large, sprawling estates in a valley on a large island.  It aims to create a ‘pocket neighbourhood’ of smaller homes, more community and less environmental footprint.

Regulatory requirements for permitting mandate consultation and engagement with local landowners/stakeholders.  There is likely to be significant resistance from this group as they would see a change from large, sprawling estates as potentially reducing the value of their properties.

There are many other groups in the valley that are advocating for and supportive of the development concept that is being promoted.  For the most part their regulatory involvement would be minimal unless it was stimulated.

The developer is embarking on an education campaign to help these other stakeholders better understand the specific type of development he is promoting and to help them to better educate the broader public on the Island and in the valley.

The developer is helping these people and groups to meet their interests and objectives of softer environmental footprints and at the same time he is engaging with a group of stakeholders that have an interest in the success of his permitting and can be motivated to provide support at public meetings and consultations. Hopefully avoiding the situation where the only engaged group is local residents who are likely to oppose the development.

Don’t Forget Internal Stakeholders
You can use many of the above best practices for internal stakeholder engagement, including especially focusing on their interest and value.

What is critical is that you and your company find ways to embed best practices like these AND embed a process where you are constantly revisiting and driving this throughout the organization, permeating the organization from top to bottom and across all departments and divisions.

If stakeholder engagement is not seen as everyone’s responsibility at some level you will never achieve the success or value that is possible.  Ghettoize it in some corner or department and you will seldom get it right and often get it wrong, at a cost to you and to your company.

Successfully engage your internal stakeholders and you will have easier and more consistent success with your external stakeholders.

*USAID, DfID, DFATD, GIZ are official development agencies of USA, UK, Canada and Germany.  They are examples only.  There are too many others to list them all.

To see other Thoughtpieces and articles by Wayne click here>>>

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