January 17, 2012
When it comes to CSR practices, stakeholder engagement can seem about as cutting edge as bread and butter. True, some companies like Starbucks, which is crowdsourcing new product ideas through its “My Starbucks Idea” social media platform, are showing leadership in identifying and holding discussions with diverse stakeholder groups. But just as many companies are struggling to build the basics of engagement and appropriately respond to increasing pressure.
This is happening in part because stakeholder engagement is part of the CSR basics. It has become such a norm that companies complete it to tick a box rather than endeavoring to understand what engagement specifically means to them. Managers charged with stakeholder engagement are also feeling pressure created by social media. More voices clamoring in more outlets for more attention is changing the reasons companies engage, how they engage, and with whom they engage.
The resulting story is all too common: Companies feel the increasing external pressure and recognize that they must engage, but blindly sign on to an engagement method without questioning their understanding of it, or their intent in using it. They mistakenly place stakeholder engagement in the outreach buckets of public relations or communications. They struggle to relate engagement to their core business activities and have difficulty building internal awareness and interest. When the time comes to map stakeholders, they talk only to those they know or to those who speak loudest. And even if they succeed in gathering information from these stakeholders, they have difficulty transforming it into business intelligence.
To help companies get back to the basics, we recently published a series of papers on BSR’s five-part approach to stakeholder engagement. While these briefs are intended to help spur internal discussions about tools and approaches to stakeholder engagement, we gleaned some valuable ideas during the writing process:
- Go beyond the toolkits. All the toolkit instruction in the world will not help if your company lacks its own definition of the term and a real understanding of its intent in engaging. A company must start with the right questions before buying into an engagement methodology.
- Talk about the trade-offs. Engagement might seem intangible, but it does require real resources to develop an engagement strategy—from the hours spent on internal consulting activities and outreach to the hard cash behind planning events and producing materials. There are real trade-offs to consider in your resource allocation. Does it make more sense for your company to invest in hiring a facilitator, if those funds can instead be used for internal facilitation training and capacity planning?
- Use social media for what it is—collaborative space. Social media intensifies the classic engagement issues of scale, reach, and accessibility, as well as the question of stakeholder legitimacy. Who should a company listen to and why? Why should you choose one person over another? What is the best way to invest your limited time and resources in what seems like an endless medium? How should you “map” social media outlets in order to identify and engage with relevant stakeholders? The best way to use social media is to actively participate in the right channels (and odds are, your company is already present in these channels, whether you know it or not). If you are approaching social media for the first time, perform a search and use the resulting channels as a starting point for participation. Start putting out ideas and questions and let collaboration evolve organically. As an active participant in the conversation, you will be able to identify stakeholders who are material to your business and invite them to discuss your company’s core operations. Just remember that traditional advice holds true: The most vocal is not necessarily the most important.
- Use all of your company’s “entry points.” Business is more porous than ever, with entry points and opportunities for interaction at all levels and functions. You can take advantage of this by gathering information or setting up engagement activities at each of these interaction points. For instance, Novozymes engages a wide range of stakeholders across multiple business functions, including supply chain management, human resources, marketing and public relations efforts, and especially product innovation and development. Even with these multiple channels, however, the company ensures that its myriad activities fit into an overall strategy.
As you master the basics of stakeholder engagement, it’s important to appreciate the ever-changing nature of this practice. What follows are questions we are currently tackling—and on which we welcome your thoughts:
- If your company interacts with a large number of other entities—say, in the range of 10,000-plus—how do you incorporate competing requests into a cohesive overall strategy?
- How do you capture all the information streaming into your company? And how do you distill the information to note trends and develop strategies around them?
- You can build and publish a strategy at any time, but stakeholders now have the means to challenge it almost instantaneously. How can you manage a strategy in this dynamic environment?
For more information or to share your thoughts on BSR’s stakeholder engagement strategy, contact Farid Baddache.
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