Task 1 : Identify Stakeholders : Companies have about as much ability to choose their stakeholders as children have to choose their parents, so the best any firm can do is to identify their stakeholders. The location, scale and nature of operations will determine who sees themselves as stakeholders. Stakeholders will expect to be recognized when the firm’s effect on them, for better or worse, is direct or immediate — employees, for example. Even people who seem to have no direct connection with the business may consider themselves stakeholders, such as the families of the employees and those who live in the communities in which the business is located.
A useful technique at this stage is stakeholder mapping. This is a way of visually representing the variety of stakeholder relationships the firm has and their relative proximity or strength. Some businesses use grid diagrams while others use circles. Regardless, it is important to include all the relationships in which the firm affects people or they affect the firm.
Thinking broadly about stakeholders often results in a list that is much too long to be of any practical use. To avoid engagement burnout (trying to talk to too many stakeholders) consider setting priorities, using the following criteria as a start:
(1) The significance of the effect of the firm in the view of the stakeholder (for example, layoffs at the only plant in town will be very significant to workers, their families and other residents).
(2) The importance of the stakeholder group to operations (for example, customers and key suppliers).
(3) The risk of getting incomplete information by excluding a group (for example, when a foreign subsidiary’s only contacts are with government officials, it will be difficult to learn the concerns of local workers or residents).
(4) The opportunity to access new ideas (for example, engaging a group that is likely to challenge current practices may provide fresh insight into a difficult problem — but the firm had better be prepared to actually change its approach).
(5) The requirements of regulators or permit-issuing bodies (for example, to get an operating licence in certain areas in Canada, a firm maybe required to engage aboriginal peoples).
Task 2 Understand the Reasons for Stakeholder Engagement : The firm may be contemplating stakeholder engagement to better understand its impacts, to help articulate its values, mission, strategy, commitment and implementation, to facilitate a regulatory approval process, to participate in measurement and reporting, to avert or solve a crisis, or to proactively improve• relationships. The reason for engaging stakeholders is to determine the style of engagement and stakeholders’ expectations, all of which could change over time.
It is important
to be clear about where each engagement fits into the big picture. Will the
role of stakeholders be advisory or participatory? Is the firm prepared to
change its plans significantly based on what it learns? The demands on some
stakeholder groups to participate in consultation processes have become so
great that sophisticated stakeholders are not willing to contribute much energy
to processes in which they have little influence.
Without committing any resources, becoming aware of stakeholders and their significance will benefit future business planning.
Task 3 : Plan the Engagement Process: Determine the engagement objectives. What do the firm and the stakeholders want from the engagement?
The engagement plan should describe each stakeholder group and any subgroups, to ensure that the participants are representative of the group. It should also describe existing engagement processes, since many of these can be used as the foundation to develop a more systemic approach.
For example, some engagement may already exist under the auspices of the current management approach (e.g. ISO 9000, Iso 14000). When engagement is planned in the context of a regulatory process or a crisis, it is crucial to ensure that the participants have the legal and/or moral authority to speak for their group. For engagement related to performance measurement or organisational learning, having representative participants is also important to ensure reliable results.
The engagement plan should note the capacity of the group to engage with the firm on specific issues. Communities, aboriginal peoples and other stakeholders may need resources to participate, including credible information, compensation or childcare (so that individuals can participate in meetings or engagement activities). Whenever possible, use the language of the stakeholder group. At a minimum, provide interpreters. Separate engagement processes fOr Aboriginal peoples should be considered. Ensure that vulnerable groups, such as employees and their representatives in some situations, can speak openly, without fear of reprisal. This may require holding engagement processes off-site. Be sensitive to gender issues. Providing a facilitator of the same gender as the participants may make the group more comfortable about sharing information.
Select the appropriate engagement approach. This may focus groups, individual or small group interviews, surveys, formal referrals, key-person meetings, advisory councils or some others. The approach chosen should reflect the engagement objectives, stakeholder capacity, cost and time constraints; and whether qualitative or quantitative information is required.
Task 4: Start the Dialogue: Entering into engagement in a spirit of respect and openness will increase the opportunities for mutual benefits. When inviting stakeholders to participate, be clear about the degree of influence they will have and commit to it. Nothing is more likely to destroy trust and discourage future engagement than revealing part way into an engagement process that the key decisions have already been made.
Remember that dialogue means two parties conversing. Cultivate the capacity for listening.