People are connected to each other like never before.
A stark reminder for me last week came in the form of real-time email conversations with colleagues in Melbourne during a flight between Los Angeles and Seattle – 30,000 feet above the United States.
My destination was Seattle, the venue for a meeting of a business network which connects Currie and our clients to 50 owner-operated public relations agencies and 900 consultants in almost 60 markets worldwide.
Every day these agencies broker conversations between clients and stakeholders. These stakeholders are individuals or interest groups who care about what their clients do, how they do it and why they do it.
Stakeholders can create or destroy value, depending on how effectively they are engaged. They have the power to change an operating environment, design products or services, and answer challenging questions.
The question for all of us is ‘are we paying enough attention to them?’
Unlocking the value in stakeholder relationships
As digital technology increasingly enables stakeholders to be more connected with what industries or organisations do, there is a strategic value in identifying who they are and understanding them better.
Here are two reasons why it makes sense to engage stakeholders like never before.
1. Society grants business a licence to operate
Today, in business, it’s not so much a case of ‘who you know’, but more a case of ‘what they think about you’. The views of influential stakeholders shape regulations, standards and protocols which determine what you can and can’t do. We call this ‘social licence’. Understanding what people care about is vital.
Put simply, social licence, says Mick Keogh of policy think-tank the Australian Farm Institute, is “acceptance or approval continually granted to the activities of an industry or organisation by the community”.
We know from our work on the Dairy Industry Sustainability Framework that stakeholders continue to support the Australian dairy industry to operate based on how well it responds to their concerns. These concerns include, animal welfare, food safety, health and nutrition, industry profitability and environmental impact.
The better an industry or organisation understands and accepts the conditions that accompany its licence to operate, the sooner it can get on with creating value that benefits both shareholders and stakeholders.
One way the Australian dairy industry shows it deserves to keep its social licence is to regularly report on the progress it makes against a set of economic, social and environmental targets for 2020. Importantly, the framework is regularly reviewed to ensure it remains relevant to farmers and manufacturers, the operating environment, community expectations, stakeholder priorities and customer needs.
2. Complex problem-solving requires multiple perspectives
In his book The Wisdom of Crowds, James Surowiecki writes about the mind-numbing complexity of the strategic decisions corporations have to make. He argues this complexity requires a wisdom borne of multiple perspectives.
So deciding on seven priorities, 11 targets and 33 indicators in a sustainability framework for the dairy industry is complex. That’s why the Australian dairy industry sought input from multiple stakeholders representing the private, public and non-profit sectors. The framework was developed in consultation with farmers and manufacturers, as well as customers, retailers, government, regulators and special interest groups.
It’s what we at Currie call ‘stakeholder-led design’. The theory is that by harnessing the collective wisdom of multiple informed publics, you create a more resilient, longer-lasting, strategic outcome.
This is an approach we’ve also supported as a partner in the World Bank-funded Capturing Coral Reef & Related Ecosystem Services (CCRES) project. Finding answers to save coral reefs, mangroves and seagrass beds from pollution, unsustainable coastal development, overfishing and climate change is complex too.
Once again, as explained in the 2014 CCRES Annual Report, you can’t solve a complex problem such as marine conservation unless you involve those people who are using the oceans and those who care about what happens to them.
Remember, engagement is the means to an end
Stakeholder engagement is vital work – it involves time and commitment to actively engage. You must listen, build relationships and respond to people’s concerns and suggestions in a practical way. Engagement is not an end in itself, but a means to help build better relationships with those people and groups who share a mutual interest. Ultimately, it results in improved business planning and performance.
Now that we’ve shared our thoughts about staying connected with those people who care, let us know what you think.
Drop me a line. Yours, in anticipation