Lecture Five - Stakeholders, external and internal

Lecture Five: Stakeholder Engagement: Theory, Mapping, &

ManagersFebruary 11th 2015

Lecturer: Tobias WebbTobiaswebb.blogspot.com

Stakeholder EngagementOther lectures covered employees, investors and NGOs. This lecture looks at other key stakeholders:

• Ed Freeman on Stakeholder Theory (video) • Mapping Stakeholders• Engaging Middle Managers (Stakeholders?)• How to get the CEO / Board on board

A good example of a company getting stakeholder engagement wrong: Tesco

• Suppliers

• Communities

• Financial stakeholders

Stakeholder Mapping

How to make it work for your business

Who are your stakeholders? It's not so simple..

A stakeholder in an organisation is... “any group or individual who can affect or is affected by the achievement of the organisation’s objectives”.

(European Business Ethics Network)

"A stakeholder is any person or organization affected by or with the power to influence a company's decisions and actions" (Blowfield and Murray, “Corporate Responsibility”)

Stakeholders are evolving…

From a business perspective, we've gone from:

"A stakeholder is anyone that can screw up my business" (2002)

to:

"Stakeholders are source of innovation and risk management for my company" (2013)

But most companies still live within the first paradigm of risk management...

Stakeholders, the “obvious” ones

Primary:

• Employees

• Business partners & suppliers

• Investors

• The government

• Consumers

• Communities

Secondary:

• NGOs (but very important)

• Institutions

• Lobby groups

• Academics and business schools

• The media

• Non-human stakeholders: Natural environment/climate change

So where to start? The most significant groups..

• Suppliers (child labour)

• Communities (pollution)

• NGOs (Greenpeace etc)

• Governments (Compliance)

• Employees (Innovation)

Stakeholder Mapping: A simple four step plan

Step one: Develop a categorised list of the members of the stakeholder community

Step two: When a list is relatively complete (not perfect: it's a moving target) assign priorities based on:

Stakeholder Mapping - Priorities

Power (high, medium, low)

Support (positive, neutral, negative)

Legitimacy/Influence (high or low)

Urgency (strong, medium, weak)

Stakeholder Mapping: A simple four step plan

Step three: Focus on the ‘right stakeholders’ who are currently important

Create a tool to visualise this critical sub-set of the total community

Stakeholder Mapping: A simple four step plan

Step four: Benchmark this against Freeman's model of primary and secondary stakeholder to check relevance

Primary stakeholders: Those withoutwhose participation a company cannot survive

Secondary stakeholders: Those that influence the company or are affected by it but who are not essential to survival

How do you justify this kind of work to your board?

Stakeholder analysis helps identification of the following:

• Stakeholders' interests

• Their mechanisms to influence other stakeholders

• Potential risks: Which groups may be affected by our work?

• Potential opportunities: Who can help us solve problems?

• Key people to be informed about the project during execution phase

• Negative stakeholders as well as their adverse effects on the project

Embedding CR

Lessons from management

When embedding, things to think about (1)

• Objectives, goals, targets, milestones: What is the difference for you and your company?

• How could you ensure your lower-level targets service your higher level objectives?

• Build your own: Would you prefer to use external tools or frameworks to define goals and targets, or create your own?

• The long-and short-term: What would help you in matching targets and timelines appropriately?

When embedding, things to think about (2)

• Benchmarking: Are you aware of what others do, and how can you know what makes a good target in your case?

• What role is there for ongoingperformance comparisons?

• Going off-piste: How can you prepare for when results are not as planned?

• What about when the targets (or even the objectives) seem mistaken?

Embedding CR: Six Phases

Phase 1: INSIGHT - stakeholder views, science based understanding of issues, benchmark of competitors and peers

Phase 2: Public commitment of the “headline goal” – reducing carbon by 30%, reducing injuries

Embedding CSR: Six Phases

Phase 3: Establish a baseline

Phase 4: Allocating responsibility for action, the business must own the baseline, own the target and own the achievement

Embedding CSR: Six Phases

Phase 5: Public reporting of progress. Revisit what you said you’d do, create the sense of continuity and recommitment

Phase 6: Transparently revisit and challenge the original goal

Key lessons for senior managers

• Clarify CR roles and responsibilities at board level, CR champion on the board, board-level committee

• Articulate CR strategy clearly, reflecting board responsibilities and accountabilities. Put it in the mission!

Key lessons for senior managers

• Encourage frank exchange and engagement at senior levels

• Avoid delegation of critical decision-making that senior leaders need to make

Key lessons for senior managers

• Join-up high-level communications, linking to the company’s CR goals, objectives and strategy

• Champions and cheerleaders are critical: Don’t “outsource” responsibility for CR issues: Manage internally

Key lessons for senior managers

The key lesson is:

Don’t try to eat the elephant all at once: A bite at a time. Your road map is an invaluable tool

Ten fundamental

things to remember in

stakeholder engagement in

emerging markets

Tobias Webb, Founder, Innovation Forum

www.innovation-forum.co.uk

Tobiaswebb.blogspot.com

There are no secrets.

Resist the urge to compartmentalize information.Treat all communications as if they were goingto be posted on the internet for all to see(because, that may just happen). Act authentically but remember everything can and often will, endup on the record.

Interest alignment.

Constantly search for alignment between

company/project interests and stakeholder

interests. Be creative – sometimes real

opportunities lie outside the box. Interest

intersections, where your interests and

stakeholder interests align are valuable gems.

Think inside and outside the box to find them.

Realistic timeframes and budgets forstakeholder engagement are vital.

Make sure your CFO understands and approves a

realistic budget. Help them to understand the cost

of your failure.

Share credit – it will multiply

Credit shared is goodwill created. Acknowledge,

recognize, praise and promote partners and

collaborators (government, NGOs, communities,

organizations, etc). Do it every chance you can.

You gain much and lose nothing.

Smile. Let your humilityand humanity show.

Credit shared is goodwill created. Acknowledge,

recognize, praise and promote partners and

collaborators (government, NGOs, communities,

organizations, etc). Do it every chance you can.

You gain much and lose nothing.

Understand before understood.

Communication is critical. Listening is key. Seek to

understand before you try to be understood. Think

about how you say things: Use soft language, not hard,

emotion generating terms.

Everyone is the face of the company.

They should be trained in stakeholder engagement.

Right person to right position: If you delegate, train and

build capacity. Make sure your people know how do it

right, never assume. This means your bosses, your

reports and others across the company.

Simplicity is good.

Complexity will cost you.

Simple guidelines beat complex prescriptive

procedures every day of the week. Be realistic. If your

stakeholder engagement plan, process, procedure

is too complex who is going to follow it. Don't turn

stakeholder engagement into box ticking! Train and

trust your people. Give them room to be creative and

responsive but let them now where the boundaries are.

All is not the same.

The importance of taking note of culture cannot

be underestimated. Things change from country

to country and project to project. Rigidity will often

crack and break. Allow room for adaptation to culture

and use it when necessary.

Stay in touch.

Ongoing communications even when there is no

obvious demand – Be open and transparent, it builds

trust. Think about being counter intuitive with regular

communications about the good and bad. Get the

balance right. Communicate frequently enough that

you are not forgotten but not so frequently that you

are ignored. Don’t always wait for a big win, or failure.

17 further lessons from a recent executive workshop can be found at:

http://tobiaswebb.blogspot.co.uk/2014/11/

27-expert-tips-on-engaging-stakeholders.html

A few examples:

SAB Miller in Ghana (more here)

• Developed new beer brand brewed using cassava roots

sourced from small holder farmers in S Ghana

• Considerable engagement with farmers, farming communities,

agricultural organisations & regional Ministry of Agriculture

personnel to understand the cassava industry and develop a

local supply chain

• Addressed supply security concerns and built trust

• Beer brand then sold back into these rural communities

A few examples:

Anglo American nickel mine in Venezuela

• Created significant community housing programme

• Provided healthcare, medical supplies for local hospitals,

which lacked capacity and supply

• Matched and exceeded local expectations

• Flood and practical disaster assistance for communities

• Resulted in ‘Chavistas’ protesting FOR the company

A few examples:

Nestle and Golden Agri Resources (GAR)

• 2010 Greenpeace campaign shocked Nestle to action

• GAR, leading palm oil suppliers, pushed to work with

Greenpeace and TFT (The Forest Trust)

• Created market leading partnership to prevent deforestation.

Set the scene for huge changes in the sector and in forestry

(APP, Wilmar, many others)

• Win-win outcomes created for all involved, including investors