Building a proactive stakeholder engagement plan
Business doesn’t exist in a bubble – your organisation is in a contract with your stakeholders, and with society as a whole. In the dark years following the credit crunch, this was starkly apparent, as culpable companies scrambled to mend broken trust and reframe their reputations. In order to do this, they needed to create a Stakeholder Engagement Plan.
Post-financial crash, the business world experienced a new normal, defined by interconnectedness and hyper-transparency. Social media, a 24/7 news cycle and new expectations for corporate social responsibility combined to create a greater demand for accountability. Meanwhile, tolerance for spin and reputation management vanished: such ploys went unsold, and trust couldn’t be regained by using them.
But in their rush to implement stakeholder management strategies, some tripped up. Short-termist, inauthentic businesses failed to recognise what was needed in the reshaped environment. The survivors and the winners played a longer game, aligning their purpose with their stakeholder imperatives. By embodying a set of clear, positive values, and broadcasting them through a communications plan, they rebuilt their contracts with society and their stakeholders.
In the eye of the stakeholder
Against this backdrop, for today’s businesses, building a proactive stakeholder engagement plan is fundamental to success. Reputation is in the eye of the stakeholder, and every business has multiple corporate images depending on the audience they’re facing. Without a solid engagement plan, you risk attracting one while managing to repulse another.
For businesses, and particularly for the corporate affairs function, the key to communicating with stakeholders lies in understanding how different stakeholder groups feel about you, and the inherent risks and opportunities that arise from those attitudes.
The next step is designing engagement plans for each stakeholder to mitigate those risks and build upon those opportunities.
This has to be done on the front foot, and they have to be proactive, well-informed, structured plans, built on industry intelligence and analysis. Stakeholder intelligence should be at the heart of any stakeholder engagement strategy. Through it, your business can understand what is being said about you, by whom, via which channels, and to what audience.
A stakeholder engagement plan can be company wide, or relate to a specific product or project. In the latter case, the project team needs to identify project-specific stakeholders, and work within a tighter scope and shorter timeframe to ensure project success.
Janus, look away now
A stakeholder engagement plan is founded on identifying who your many stakeholders are and how to weigh their impact. They will not each wield equal force. Some will be front of mind in every business decision. Others will only have an indirect or secondary effect on the organisation or project by influencing primary stakeholders. Value analysis is needed to map out and prioritise stakeholders based on their likely power over the business.
nsurprisingly, the companies with the most proactive engagement plans are found in the most heavily-regulated industries – such as pharma, oil and gas, and mining – in which meeting each stakeholder’s standards can be a requirement for staying in business.
Effective communications management requires that you listen to what your stakeholders are saying on social media and how the business is covered in the press. It means talking to stakeholders, either face to face or via primary research. It requires an understanding of what they care about. And working out whether and how to incorporate these topics into your company’s goals.
But beware the risk of becoming two-faced: followed to its logical conclusion, this strategy risks making you appear like Janus, saying one thing to one audience while turning a contradictory face to another.
Stakeholder engagement doesn’t mean telling people what they want to hear. It means understanding whether and how you can genuinely align your business practices with the priorities of your stakeholders.
Creating an engagement plan
Whether you’re a project manager or chief communications officer, the process of creating a proactive stakeholder engagement plan is much the same.
- Identify your stakeholders: The sample size will vary, but every business process has stakeholders. Whether they are the project sponsor, a product team, corporate customers, NGOs or government regulators, all of the groups and individuals with a vested interest in the company, product or project need to be identified and categorised.
- Prioritise by influence: Internal stakeholders can have a direct impact on your business and a powerful influence on other stakeholders. Alternatively, they might have an occasional but impactful role to play. A power-interest grid will allow you to identify which stakeholder groups have the highest interest and greatest influence. Where they sit on the grid will define how you should engage with them.
- Collaborate with the players and influencers: High power, high interest stakeholders will require sustained attention, being kept informed of what is happening, and having their priorities attended to. Shareholders and customers fall into this group.
- Hook the context setters: Low interest, high power stakeholders such as regulators can influence the future of your business without being directly engaged with it. Communications should attempt to create a positive image among this group to avoid future issues.
- Engage the subjects: Low power, high interest stakeholders, such as employees, can form coalitions and rapidly transform into players, and then exert a powerful influence. They need to be kept on side with ongoing positive engagement.
- Inform the community: The low power, low interest crowd shouldn’t be ignored. While these are secondary, non-influential stakeholders now, the power of popular movements has shown that a negative reputation among the wider community can cause issues to snowball. Relations with these stakeholders need to be monitored.
Signing up to engagement
It’s impossible to please all of your stakeholders all of the time.
Attempting to do so will create contradictions and inefficiencies in the business and make outgoing communications meaningless. Paying lip service to certain stakeholder groups then failing to follow through is equally damaging.
The route through is identifying the expectations and requirements most aligned to your core objectives. The corporate affairs function can win at stakeholder engagement by collecting and collating intelligence, sifting and prioritising it, then refracting it through a lens of the interests and purpose of the company.
Stakeholder engagement is a core competency for today’s businesses. It is no coincidence that since the financial crisis, the companies that have signed up to the social contract have seen less disruption and obstruction from stakeholders, be they investors, consumers or regulators. Those who have remained relevant throughout the past decade have joined the dots between corporate value and stakeholder needs.
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