I recently did a piece on 5 mistakes companies make in stakeholder engagement and many of you asked me to give a list of best practices. Here are six.
1. Think Value and Interests – and do it transparently
2. It’s OK to disagree – but, disagree without being disagreeable. And stay curious
3. Do compliance but think and act strategic – check the boxes yes, but that is just the foundation
4. Share the credit, multiply the resources. Find partners!
5. Communicate so you are heard and understood.
6. Define stakeholders broadly and strategically – go beyond compliance
1. Helping business to
serve shareholders AND society
SIMULTANEOUSLY
Stakeholder Engagement
Six best practices
-by Wayne Dunn
www.csrtraininginstitute.com/knowledge-centre
2. Six best practices in stakeholder engagement
I recently wrote a piece on five mistakes companies make in stakeholder
engagement and many of you asked me to flip the other side of the
coin and give a list of best practices. So, 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 from great mentors or, in my case, both). And
underlying the list is the critical principle of …
Honesty, Trust & Integrity…
… And if you don’t get this 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 and your work might further those interests for
your stakeholders.
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. Your
stakeholders have it figured out anyway!
1. Think Value and
Interests – and do it
transparently
3. Six best practices in stakeholder engagement
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You will disagree with stakeholders, and sometimes with most of
them. That doesn’t make them – or you - wrong. But there’s 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 with what, at the time,
was a very small gold producer.
Just down the road was a
shuttered mine that had lost
its social license, so the
company knew they might
face difficulties.
The opposition that had
successfully shut down the
other mine were now trying
to stop this new one from
becoming the first modern
producing mine in the country. And they had won over some of the
local communities.
The engineer spent many, many months in the community, getting
to know the residents, including those who were in vehement
disagreement. Trust began to develop.
Transparency happened. Shared interests emerged and were built
on.
Not everyone agreed, but the mine got built. And 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 and management and a
company that allowed him to be just that.
Bonus for me on this example – my consultancy was providing advice
and support and we ended up with some credit for all the great work
the geologist did! :)
2. It’s OK to disagree
– but, disagree
without being
disagreeable. And
stay curious
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Six best practices in stakeholder engagement
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 beware; compliance is seductive. 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
audit able and defensible.
You need to resist the urge to embrace more and more standards
and norms, to check more and more boxes just to stay in this comfort
zone.
3. Do compliance
but think and act
strategically – check
the boxes yes, but
that is just the
foundation
By comparison, strategic stakeholder engagement is often ambiguous,
uncertain and sometimes even downright scary. There is no certainty
of success.
Gettingoutthereandengaging
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.
Spend time thinking about the blend and mixture that is right for your
business. It’s an investment that will pay dividends.
How NOT to do it, but alas still a common approach!
5. 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 activity 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 with 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.
4. Share the
credit, multiply the
resources. Find
partners!
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Six best practices in stakeholder engagement
This all sounds a bit academic and theoretical. What does it really
mean in real life?
Imagine this (and these are all real world projects):
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
license.
Or you are a mining company operating in a remote
community and want to improve local educational capacity.
Your value and interest is that a 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.
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Six best practices in stakeholder engagement
These organizations 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.
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 your
stakeholders are.
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 demand consultation and
engagement with local landowners/stakeholders. There is likely to
be significant resistance from this group as they would see a change
from the existing large, sprawling estates as potentially reducing the
value of their properties.
5. Communicate so
you are heard and
understood.
6. Define
stakeholders broadly
and strategically – go
beyond compliance
7. Meanwhile there are many other groups in the valley that are
advocating for and supportive of the general development concept,
one of increased density and softer environmental footprint.
As they are not required by regulation to be consulted, their input
would be minimal unless it was stimulated.
The developer is embarking on an education campaign to help these
stakeholders (who are likely to be supportive) 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.
By going beyond compliance and thinking broadly about stakeholders
the developer is able to engage a broader and more supportive
constituency and enhance the chances of regulatory approval.
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Six best practices in stakeholder engagement
Don’t Forget Internal Stakeholders
The previous points dealt with external stakeholders but you can
use many of them for internal stakeholder engagement, including
especially the part about focusing on their interest and value.
What is critical is that you and your company don’t just embed best
practices like these BUT also 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.
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Six best practices in stakeholder engagement
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.
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Wayne Dunn is President & Founder of the CSR Training Institute and Professor
of Practice in CSR at McGill. He’s a Stanford Sloan Fellow with a M.Sc. in
Management from Stanford Business School.
He is a veteran of 20+ years of award winning global CSR and sustainability
work spanning the globe and covering many industries and sectors including
extensive work with Indigenous Peoples in Canada and globally. His work
has won major international awards and has been used extensively as ‘best-
practice’ by industry and academia.
He’s also worked oil rigs, prospecting, diamond drilling, logging, commercial
fishing, heavy equipment operator, truck driver and underwater logging, done
a couple of start-ups and too many other things to mention.
Wayne’s career includes big successes, and spectacular failures. He hopes
he’s learned equally from both.
Wayne Dunn
About the author