Stakeholder engagement is based on mutual respect and understanding. The strongest forms of engagement are those where there are clear, identifiable benefits for both company and stakeholders. However, this does not mean that stakeholder engagement is only useful if there is an opportunity to create shared value. Nor does this imply agreement on all topics nor should that ever be the objective of engagement. After all, both the company and the stakeholders have their own responsibilities and values.
In a series of five blogs I am taking a closer look at strategic stakeholder engagement and how companies can optimally use it. In the first blog I laid out the business case. In this second blog I look at how the value of engagement swings between organisations and their stakeholders. The third takes a closer look at the benefits of strategic engagement and the last two blogs examine the internal and external barriers to success.
Engagement entails a dialogue on multiple topics of relevance to the company, the stakeholder or both. Even though the initiative for the engagement might come from the company, the agenda for the dialogue is driven by all parties and could include topics such as:
- what a company does well and what it doesn’t do too well
- what concerns and ideas a stakeholder group has around the company, its products and its processes
- expectations of the company’s engagement with society and societal issues beyond its direct influence
- ideas for solutions to problems or for (new) products
Reality is that the value of each engagement is different for the company and for a specific stakeholder group. In situations where there is more regular interaction between a company and it stakeholders the value pendulum can freely swing between the parties. The minimum value for a company is always the strengthening of relationships. Regardless of who gains the most from the discussion, it is important to be transparent about the value for each of the participants, organisation and others alike.
Sometimes, based on strategic choices, a company will have to accept that its engagement actions bring no or even adverse value to certain stakeholders. In that case the benefit of the engagement to the stakeholder might be limited to gaining knowledge of the company's plans and having an opportunity to air its concerns directly to the company. Yet, this is no excuse for not engaging.
Also, when designing an engagement strategy it is important to realise that not all stakeholders and their opinions are equally important. It is better for a company to focus on key stakeholders and do that well rather than try to engage too many stakeholders. In order for the company to be successful it will need to constantly map and review the stakeholder landscape, set clear criteria for selecting of stakeholders based on materiality and regularly review its overall engagement objectives and strategy.