When I started out in sustainable development — longer ago than I care to remember — we did something called a social audit. It was basically a corporate 360 degree-capture of feedback from a range of stakeholders. This was all about companies effectively managing risk through understanding what people and organizations that affected them or were affected by them thought about what they were doing.
These days it's strange to think of this as a new concept because it's so central to most leading companies' sustainable business approaches. But I wonder whether it is still adding the same value. The conversations at these sessions seem to have lost their luster. Stakeholders give feedback and a bit of advice, but they leave with no actions or responsibilities and it is often unclear what the company ends up doing differently as a result.
In a world where we are facing big urgent challenges, this won't cut it anymore. Companies such as Unilever, Nike and PepsiCo recognize they have to get involved in solving big sustainability problems such as resource scarcity and climate change because they have an impact on their future business. So we have an opportunity to do things differently and make stakeholder engagement an active, collaborative process where people work together to achieve something. Call it stakeholder engagement 2.0.
This is an approach focused on solving tricky challenges too big for one company to address on its own. It is about creating the big shift (#theBIGshift) that Forum for the Future advocates, where companies work not only to create more sustainable products and services, but also to shape the context in which those products and their wider business will be more successful.
Stakeholder engagement 2.0 is all about moving from feedback on company performance to solving shared challenges — creating more mutual value for companies and stakeholders alike. The differences are captured below:
Nike's Launch is a good example of this new approach. In April, the company, along with NASA, USAID and the State Department, pulled together the materials system in a room to explore and support new sustainable solutions for materials. This was stakeholder engagement with a totally different focus — not Nike, but a critical system in which Nike operates. It demonstrates a willingness to work with stakeholders on an equal level to find new solutions without replacing the engagement that Nike needs around its own strategy.
Launch is probably more than most companies are able to do, but it is a strong indication of where we need to go. It is no longer enough to just get feedback from stakeholders — they need to be involved in finding new solutions. That is what stakeholder engagement 2.0 is all about. It could be transformational for both company performance and sustainability. Ultimately, it will move us towards a really big shift when companies talk to stakeholders as a key route to value.
In a changing world, that is exactly how value will be created or destroyed.
Boardroom image by hxdbzxy via Shutterstock.