Stakeholder engagement is a foundation for organisational performance because it is the key to strengthening reputation and reducing social risks.
For example, ACCSR’s research finds that every 10% improvement in stakeholder engagement delivers a 4.15% improvement in reputation. Improving stakeholder relationships is also the highest priority of CSR managers, according to the 2015 Annual Review of the State of CSR in Australia and New Zealand.
Embedding a culture of stakeholder consideration
Stakeholders become ‘stakeholders’ because they have an issue that they share with an organisation.
Perhaps they hold concerns about environmental or social impacts of certain business processes or products? These concerns need to be recognised and addressed thoughtfully by developing high quality relationships with stakeholders. High quality stakeholder relationships can then begin to build an organisation’s reputation, as stakeholders are more likely to speak well of an organisation they have genuine and productive relationships with.
Building close relationships gives stakeholders a chance to see firsthand that your organisation is serious about making a positive social or environmental contribution. People develop a mind-set for stakeholder engagement when your organisation’s culture encourages respectful and open relationships with external stakeholders.
Actions speak louder than words, so an organisation’s behaviour is a more powerful driver of reputation than what it says about itself. This is more important than ever in a fragmented post mass media marketing era.
Step 1 – Listen carefully to your stakeholders
Stakeholders can perceive the same issue differently and emphasise different aspects of an issue in expressing their views.
Listening well is the key to understanding how different stakeholders see the issues. Taking the time to ask questions, even if they prompt difficult conversations, will enable you to pick up on the nuances in the perceptions of your stakeholders. Questions like ‘Why is that important?’ and ‘What else is linked to that issue?’ can help you get under the skin of what matters to which stakeholders, and why.
Step 2 – Demonstrate you understand your stakeholder’s concerns
Avoid dismissing perspectives that are different from yours. While perspectives may be contrary to your organisation, demonstrating that you truly understand the concerns and views of your stakeholders is more important. This can mitigate any misunderstanding that might lead to conflict, and help establish a good relationship even if your stakeholders don’t agree with everything your organisation does.
Often stakeholders have knowledge that can benefit companies; for example, when BHP Billiton’s Cannington mine was being developed in Queensland, stakeholder engagement helped the company identify the best route for an access road, saving $25 million on its original plan.
Step 3- Prioritisation
The prioritisation process will help you manage internal and external expectations.
Gone are the days of “one size fits all.” It’s no longer acceptable to apply the same level of effort and resources across the board, treating all stakeholders the same. Now, particular issues, audiences, knowledge, and circumstances call for a more tailored approach, allocating and involving stakeholder’s specific to the issue or opportunity at hand.
As we don’t operate in static environments, pay attention to stakeholders who may become more interested or more influential over time, and adjust your prioritisation of them accordingly. This may warrant shifting your approach from a more re-active one or basic monitoring through to active, high-level engagement of effort, resources and investment.
Delivering value through stakeholder engagement depends on trust, collaboration and most of all, high-quality relationships.
At my upcoming workshop on “how to achieve the best outcomes in stakeholder engagement” I’ll show you how to develop an effective stakeholder engagement strategy that drives organisational performance. We’ll examine and simplify complex stakeholder engagement theories and tools, and learn how to develop a stakeholder engagement strategy that will help you avoid risks, develop solutions to shared problems and ultimately build your reputation and value.
What you’ll take away from the workshop:
- Identify stakeholders and analyse issues
- Map links between issues and stakeholders
- Use stakeholder maps to generate insights for tactics
- Classify and prioritise stakeholders
- Develop an effective approach to planning stakeholder engagement
Dr Leeora Black is facilitating a workshop at the Measuring & Managing Corporate Social Responsibility Conference this October. Book your place by September 25th to save $100.