Theme7 community designStakeholderengagementIntroductionThistwo pager is about stakeholder engagement. Actually, this is all whatsocial innovation is about: solving societal issues by means ofco-creation which is directly related to stakeholder engagement.
Thetopic explains about the whole process of making stakeholders awareof a societal issue towards eventually activating them to solve. Theseven stages and BSR’s five-step approach will help to engagestakeholders (the steps are interwoven in the summary); ‘trust’is a big part. Together with those stakeholders, strategic optionscan be assessed more easily. SummaryBeforediving into the topic stakeholder engagement, I want to explain twoother comparable options; stakeholder management and crisismanagement.The goal of all three options is to succeed in developing andimplementing a strategic option. However, the process differs.
Crisismanagement is applied when an organization suddenly comes across analarming need for change and the organization only occasionallyinteracts with its stakeholders. Organizations don’t voluntarilychoose for this option, because it causes hostile relationships withits stakeholders, including bad results regarding the strategicoption. A better option is stakeholder management, whereorganizations anticipate on societal issues and thereupon proactivelyset the direction for growth. Even the requirement of regularlyinteracting will let stakeholders feel only involved regardingstrategic options and will still cause defensiveness.
The best optionto go for is stakeholder engagement, which requires organizations toinclude stakeholders in their whole process. Organizations not onlylisten to and join the interactive discussions, but also re-emphasizenegotiations that produce satisfaction for all parties; co-creationwith synergy. This engagement prepares both organizations andstakeholders to change, which more easily can lead to a win-winsolution. Organizationshave to fit in the stakeholder engagement.This means that they have to know why they want to engage withstakeholders and what is needed of the organization itself to succeedin this process.
Why to engage: there are many reasons to engage, forexample reducing constraints, minimize risks and enhancingopportunities. Achieving this together with suppliers, customers, newentrants and social contracts gives competitive advantage and licenceto operate in today’s society. What is needed: the wholeorganization must embed and align the process, including strategiesand procedures. Developing the strategy is the first step accordingto the seven stages and BSR. Further steps for the organization areto understand the stakeholders on different indicators by mappingthem and prepare and align internally for the engagement. Next,the organization and stakeholders have to sit together.Creating an oversight in a scheme of the OWANS (organization’swants and needs) and SWANS (stakeholder’s wants and needs) caresfor a clear starting point and direction for growth. Such a schemesketches the differences and similarities, from which effectivediscussions, including synergy can arise.
Finally,the steps for the engagement process.Before starting, it’s important to understand the necessity tocreate alignment, embeddedness and trust with all stakeholders(internal and external) about the organizational culture andstructure. Alignment, embeddedness and trust cares for relationaltransparency, which enlarges the piggy bank (Covey).
Next step is toreally engage stakeholders; choose representatives, communicateappropriately and track issues of interest and concern. Then, make aninternal and external course of action. For the external course ofaction and if it’s about strategic options, the FOETSJE model canbe used to measure a stakeholders’ feasibility; financial,organizational, economical, technical, social, juridical andethical/ecological. When applying a few other proper criteria, astakeholders’ support can be measured. Last step for everyone is tomonitor, evaluate and document the whole process.
Theessence of the subject based on my opinion and examplesIthink that the essence of this theme is to understand the importanceof stakeholder engagement.When understood, an organization is better able to apply stakeholderengagement, because it will work from the heart. This emotionalcommitment will make the organization more valued by its stakeholdersand eventually (as goal) will make the stakeholders feel emotionallycommitted as well.
Subsequent goal for the organization is to createtrust, alignment and embeddedness. This goal not only counts for therelations between different organizations and stakeholders, but alsofor the internal organizations and stakeholders. For example, Nexus(see theme introduction) still has to focus a lot on their internalorganization; an important manifest was written of which only half ofthe organization was aware (no embeddedness) and each time whenhaving an internal meeting, it appears that Nexus disagrees on manytopics (no alignment). However, relational transparency will onlyarise when there is trust, alignment and embeddedness.
Whatwill flow out from proper stakeholder engagement, includingrelational transparency, is a quicker process regarding fulfillingstrategic options.Stakeholders are prepared and willing to change and thereforecommunicate and interact continuously and efficiently, which caresfor less misunderstandings and faster satisfaction for everyorganization and stakeholder. As consequence, organizations willunderstand their stakeholders even better which works effective whenworking out an external action plan regarding strategic options. Whenimplementing a strategic option by stakeholder engagement, itautomatically will cause sustainable development; for both thestrategic option as the organization with its stakeholders.Havingread this two-pager isn’t a guarantee to succeed in stakeholderengagement.Often, organizations think it’s difficult to determine the startingpoint with many stakeholders. Or, to many recommendations toimplement came out a stakeholder meeting.
To overcome those issues,it’s important to focus and follow appropriate processes. Anexample of an organization which tries to succeed in stakeholderengagement is Coca Cola. This organization recognized the effectsfrom their bottling process in, especially, India; it had hugeenvironmental impacts which caused literally deserts and thereforecriticism.
The inhabitants unionised, because of having highinterest, but low power. Coca cola already associated and dealt withthose inhabitants as stakeholders, but started to gain an even betterunderstanding of their motives while mostly using the indicator’interest’. Together with the inhabitants and other stakeholders,Coca Cola is trying to fulfil a collective action approach.Continuously dealing with stakeholders and creating a collectiveaction approach is how Coca Cola applies stakeholder engagement.