Stakeholder engagement is a process of reaching out to a range of constituents who are interested in, or impacted by, your business, including employees, investors, suppliers, non-governmental organizations (NGOs), consumers, governmental agencies and thought-leaders.
It means opening up your company to feedback, and potentially criticism, from a diverse range of perspectives. So, why would you want to take this risk?
Business case for stakeholder engagement
Before I launch into the key tips for engaging stakeholders, I want to touch on why stakeholder engagement is a solid business practice.
Alex McIntosh, Director of Corporate Citizenship at Nestle Waters, believes that lacking a stakeholder engagement strategy “…is like launching a new product without doing any market research….You are taking a big risk without doing it. Stakeholder engagement is an important, essential element in good citizenship and good business strategy. You need to know what issues are most important to the people that are most relevant to your business.”
Hewlett Packard (HP) is involved in dialogues with NGOs all over the world. Bonnie Nixon, Director of Environmental Sustainability at HP explains, “allowing stakeholders to honestly critique us pushes us to improve our programs and helps us develop our thought leadership platforms.”
To sum it up, here are the key business benefits to a stakeholder engagement program:
You can get feedback on where you are perceived on key issues, identify areas for improvement and understand what risks may be coming; NGOs can help raise awareness of issues outside your four walls, identify your weaknesses and bring issues to life for the CEO. Issues coming from a stakeholder community often bring credibility to an issue; Engagement can provide valuable input as you develop goals and metrics; and Stakeholders can help you push the envelope and stretch for higher performance.
Six tips for more effective outreach
Each of the following six tips is discussed in more detail below:
* Be strategic about whom to talk to
* Connect to the larger world
* Focus on solutions
* Build an internal culture
* Don’t make commitments you cannot keep
* Look both upstream and downstream
Be strategic: Think strategically about whom to invite to the table and stretch as much as possible into your discomfort zone. The ideal stakeholders to reach out to are those who have both power and influence and a willingness to engage.
Be open to speaking with both ends of the spectrum, from collaborative organizations to more extreme activists. The groups you don’t want at the table might have important insights or be a catalyst for a new solution to emerge.
HP doesn’t shut the door to any NGO—they are open to critiques from activist organizations such as Green Peace and have more strategic partnerships with other organizations, such as the World Wildlife Fund (WWF), who advises them on such issues as carbon reduction goals and metrics.
Connect to the larger world: NGOs, sometimes even the ones you don’t see eye to eye with, can be great allies when there is a large, social issue that a company can’t fix alone, such as climate change, recycling or water issues.
Focus on solutions: True dialogue can generate increased trust, new solutions and creative partnerships. A key to a successful stakeholder engagement is designing the process to lead to action and solutions. Challenge stakeholders to be part of the solution.
Build an internal culture: McIntosh recommends “educating your internal team on the spectrum of NGOs and the potential impact they can have on the business.” Develop strong relationships with other key departments, such as procurement, marketing, supply chain and governmental affairs—build expectations internally on how stakeholder engagement can help the company.
Don’t make commitments you can’t keep: OK. This one might seem obvious, but for large companies, making changes within a supply chain can take time and planning. While some stakeholders might want you to be more aggressive on a particular issue, be sure to look at the bigger picture, and across your supply chain, before making commitments.
Look upstream and downstream: Include your supply chain, customers, investors and employees in your outreach. What issues do they care about? What is important to them? Answers to these questions can help inform your strategy and programs.
Deborah Fleischer is the founder and president of Green Impact, providing strategic environmental consulting services to mid-sized companies and NGOs who want to launch a new green initiative or cross-sector collaboration, but lack the in-house capacity to get it up and running. She brings expertise in sustainability strategy, program development, stakeholder engagement and written communications.