As we discussed a few weeks ago, ignoring stakeholders is something for the foolish. But, while you might want to engage stakeholders it’s often difficult to know who exactly you’re supposed to talk to. As part of our new monthly Exploration series, Fulcrum dives deep into how individuals and companies can identify the right stakeholders for their sustainability efforts.
To start with, the stakeholder universe is huge, complex, and messy. Back in the day, it used to be much simpler with companies talking either to other companies or consumers. With the rise of connectivity, businesses have a whole slew of possible stakeholders they need to engage with. Understanding the who’s who is the foundation on which successful stakeholder engagement rests.
Let’s break down a few of the most important characters.
Employees: More often than not, employees are the forgotten stakeholder. Yet, when properly engaged can have a multiplier effect on programs. Engaged employees contribute more of their time to sustainability efforts, have been found to be more productive during their day, and have lower rates of turnover.
Management: Whether mid-level or executive, having management engaged in the formulation of sustainability strategies and programs is essential. Numerous studies have found that with executive-level support, for example a sponsor in the C-suite, sustainability programs have a higher likelihood of success.
Customers: In both B2B and B2C environments, knowing what the customer cares about can spell success or failure. Too often, though, companies take a patronizing tone to consumer needs. Don’t assume you know what consumers want.
Communities: All businesses operate within a community. Some, like extractives and chemical firms, have a larger impact on that community than others. Regardless, understanding the dynamics between your business and those in the local community can either get them on board with your work or create a very public enemy at the gates.
Peers and Competitors: Knowing what your competitors are doing is Business 101. Understanding the trends that will drive what they are doing in the future, and then getting ahead of that curve, is what differentiates your business from theirs.
Industry Associations and Consumer Organizations: Many industries have collaborative or governing bodies. These act as a conduit for information exchange and can also help fast track program implementation.
Supply Chain Partners: The relationship with a supplier should be one of partnership, not slavery. All too often, though, companies make unrealistic demands on production and a suppliers’ bottom line. Understanding things from a suppliers’ point of view can ease a lot of the stresses we encounter in operations.
Government: Depending on where you operate, interacting with local and national authorities may be a part of stakeholder engagement. In China, for example, the Government is the largest stakeholder in any relationship. The Holy Grail is executing programming to help meet local, provincial, and national targets.
Civil Society and Academia: Like with consumers and local communities, understanding the long-term needs and desires of civil society is important to strategic planning. Organizations fare better when they have the likes of Greenpeace on their side rather than against them. Those in the ivory tower of academia can add gravitas to organizational endeavors.
Determining who is the most important depends on your individual organization, industry, and market. These also change over time. Today it might be civil society and tomorrow your top-tier supplier. Being able to predict their needs ahead of time, through thorough analysis and understanding of each group, will help engage the right stakeholders at the right time.
In next week’s Exploration, we’ll discuss some of the best practices for understanding and engaging stakeholders.
Fulcrum’s Exploration series discusses critical issues facing today’s sustainability professionals. The goal of the series is to educate, inform, and generate discussion. If you liked some of these ideas, Fulcrum has plenty more. Set up a complimentary strategy session to dive deep into issues specific to your organization.