16 companies’ breakthroughs in stakeholder engagement
A group of socially responsible businesses shared the ways they reach shareholders. Which will work for your company?
Many pressures changing the landscape of sustainability are also influencing how companies engage their stakeholders. In response to mounting social, economic and environmental challenges and growing societal expectations that business should take a leadership role on sustainability issues, companies are finding themselves increasingly reliant on their stakeholders to help them identify and respond to the risks and horizon issues that may affect their businesses.
At the same time, the stakeholder universe — once limited to groups that most directly affect a company’s operations — has expanded to a much wider set of individuals, connected through the power of technology and social media. In our increasingly transparent world, where a tweet can be as influential as an opinion in the boardroom, a company’s strategy to engage with and learn from its stakeholders never has been more important, or more complex.
Additionally, companies are looking for ways to engage stakeholders beyond their direct line of control, including those that influence their sector or operations, and have embraced new concepts of stakeholders, such as future generations.
A continuum of approaches
On March 27, BSR convened a group of 16 member companies for a breakfast discussion on how companies can better manage their external and internal stakeholder relations through stakeholder engagement strategies.
The group confirmed the importance of developing a multi-pronged approach to engagement: Companies can optimize their reach by tailoring their strategies, methodologies and communications channels to the unique interests of each stakeholder group. Through stakeholder mapping, companies can identify their most important stakeholders and determine the level of engagement for each group.
Once companies have a clear understanding of what they wish to achieve, they can select their engagement approach, which BSR conceptualizes on a continuum, from simply monitoring stakeholder perspectives through platforms such as Twitter to actively collaborating through problem-solving workshops or partnerships.
At the event, we observed that new technologies help companies reach a wider set of stakeholders in new ways. Companies such as Marks & Spencer are experimenting with real-time, mobile survey tools to engage with line workers in their factories and those of their suppliers. The company surveyed more than 60,000 employees in five countries, offering the opportunity to provide anonymous feedback on working conditions. Through crowdsourcing platforms such as My Starbucks Idea, companies are also engaging the collective creativity of their customers and clients to conceptualize new products and enhancements to their services.
These new technologies are only pieces of a broader stakeholder engagement strategy: Success depends on whether the engagement approach is designed to achieve specific outcomes with a targeted set of stakeholders. The group agreed that tying a stakeholder engagement strategy to the company’s most material issues is a foundational step toward more meaningful and impactful engagement.
Engagement along three axes
Finally, we examined BSR’s view on how companies are evolving engagement with their most critical stakeholders along three axes, leading to new engagement models and breakthrough insights.
1. The purpose of stakeholder engagement
Companies are exploring opportunities to go beyond consultation on performance by engaging stakeholders through collaboration on challenges of mutual concern.
2. The type of stakeholder
Companies are moving beyond their direct stakeholders to include more diverse (and divergent) voices, such as marginalized populations, youth and the poor.
3. The level of engagement
By linking stakeholder engagement to corporate strategy, companies are committing to deeper engagement on material issues with their stakeholders, led in close partnership with executive teams across multiple corporate functions.
We believe that stakeholder input is critical for integrating sustainability within a company and that companies can only resolve complex global challenges through deeper stakeholder partnership. We are therefore launching a new collaborative initiative, the Future of Stakeholder Engagement, to help member companies learn how to transform their stakeholder engagement approaches toward more collaborative, inclusive and deep engagement that provides mutual value.