Positive Engagement

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Corporate reputation is an intangible asset amounting to up to 70% of an organisation’s market capitalisation. Recent evolutions in the business environment and social communications have made stakeholder engagement an essential part of the strategy of responsible and successful organisations in order to maintain this capital. But research shows that most engagement efforts in multinational or multi-services companies are kept in silos and uncoordinated across business units or departments.

This document describes some of the engagement guidelines provided by the AA1000 and GRI assurance standards and how following these guidelines with an appropriate collaborative, full circle platform can help:

* identify important stakeholders and groups ;
* map them and their opinions on the organisation’s strategic issues ;
* engage them appropriately and monitor impacts.

in a natural continuous improvement cycle to help respond to short term events in the context of a long term communication and corporate reputation management strategy.

It also describes engagement in the context of crisis management and social media to show how detecting earlier warning signals both enhances the organisation’s ability to contain the crisis and lowers the cost at which this is done.

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Positive Engagement

  1. 1. POSITIVE ENGAGEMENTLeveraging your Stakeholder Engagement for Strategic Communications Planning and Corporate Reputation Management. Pascal Jappy, November 2010
  2. 2. TABLE OF CONTENTSEXECUTIVE SUMMARY p.31—WHY ENGAGE p.4 1.1 THE EMERGENCE OF CORPORATE RESPONSIBILITY p.4 1.2 NEW STAKEHOLDER EXPRESSION p.4 1.3 LINKING CSR AND STAKEHOLDER ENGAGEMENT p.72—HOW TO ENGAGE p.8 2.1 PRACTICAL COMPLEXITIES OF ENGAGEMENT p.8 2.2 FOLLOWING ENGAGEMENT GUIDELINES p.93—THE ENGAGEMENT CYCLE p.10 3.1 MAP (PHASE 1) p.11 3.2 ENGAGE (PHASE 2) p.14 3.3 MEASURE (PHASE 3) p.174—CRISIS MANAGEMENT p.215—CONCLUSION : BENEFITS OF ENGAGEMENT p.24BEFORE YOU GO ! p.26 2
  3. 3. Executive SummaryCorporate reputation is an intangible asset amounting to up to 70% of an organisation’s market capitalisation.Recent evolutions in the business environment and social communications have made stakeholderengagement an essential part of the strategy of responsible and successful organisations in order to maintainthis capital. But research shows that most engagement efforts in multinational or multi-services companiesare kept in silos and uncoordinated across business units or departments.This document describes some of the engagement guidelines provided by the AA1000 and GRI assurancestandards and how following these guidelines with an appropriate collaborative, full circle platform can help: identify important stakeholders and groups ; map them and their opinions on the organisation’s strategic issues ; engage them appropriately and monitor impacts.in a natural continuous improvement cycle to help respond to short term events in the context of a long termcommunication and corporate reputation management strategy.It also describes engagement in the context of crisis management and social media to show how detectingearlier warning signals both enhances the organisation’s ability to contain the crisis and lowers the cost atwhich this is done. Fig 1. Tag cloud of contents (wordle.net) 3
  4. 4. 1—WHY ENGAGE “Every company is a media company”Or so write Andrew Heyward and Jeffrey F. Rayport in the February 2009 issue of the Harvard BusinessReview, describing a communication and marketing shift to a world of User Generated Content (UGC) and theneed for organisations to produce great content and to deliver it to this new landscape of technologicallyempowered consumers and stakeholders.Traditionally, a CCO’s role in the organisation has consisted in, among other missions: Defining a communication plan illustrating and sustaining the company’s strategic plan Executing and orchestrating this plan consistently across services and subsidiaries Responding to crises or helping the CEO do soStakeholder Engagement has never been so important to a company’s strategic management andcommunication. And, as Heyward and Rayport tell us, technological and societal evolutions in the past decadehave indeed altered the definitions and tactics supporting these goals in meaningful ways.1.1 THE EMERGENCE OF CORPORATE RESPONSIBILITYFirst of all, as a result of highly-publicised events such as the shocking collapse of Enron and other poster boysof the world’s economy, Corporate Responsibility has emerged from an indistinct buzzword to an essentialpart of any business strategy.In the 2010 edition of its Trust Barometer, Edelman ranks Transparent & honest practices and Company I cantrust at the very top of factors influencing Corporate Reputation (1) in public opinion, Top Leadership andFinancial Returns being the least important factors. Furthermore, many other studies confirm thatorganisations now need to integrate the ethical expectations of their stakeholders into their activity: as earlyas 2001, Marsteller polls showed that 60% of US consumers would not knowingly purchase products fromcompanies who are not good corporate citizens and that 60% of CEOs said CSR was a priority given thecurrent economic climate, while 68% believed it was vital to their company’s profitability. Again, the 2010Trust Barometer gives about the same proportion today in public opinion, as Good Corporate Citizen ranks asa reputation factor for 64% of respondents (and Communicates Frequently for 75%). And, after all time lows intrust in businesses and leaders, a solid CSR story can have great impact on CEO reputation as well.The FTSE4Good Index Series provides a great illustration of the importance of CSR in business by measuring“the performance of companies that meet globally recognised corporate responsibility standards, and tofacilitate investment in those companies”. By benchmarking the environmental and social performance ofcompanies, the index is serving as basis for the creation of responsible investment portfolios.1.2 NEW STAKEHOLDER EXPRESSIONSecondly, the number and variety of stakeholder groups with which to engage has grown tremendously. For astart, numerous pre-existing populations that have always had their opinion but could not be heard globallyhave found in the Internet a tremendous opportunity to voice their concerns publically, thereby entering theradar of organisations as stakeholders to be monitored and engaged. And, in parallel to this, stakeholderswho would have previously acted in isolation have been given the opportunity to form groups, share ideasand wage common battles against actions perceived as unethical.1 - Weber Shandwick studies estimate that as much as two thirds of a company’s market capitalisation can be attributed to this mostimportant of intangible assets. 4
  5. 5. Below is a partial list of stakeholder groups and the sort of influence they can exert on corporations: Stakeholder Opportunity/ risk Media Coverage, balanced or not Consumers Boycott - Advocacy NGOs Boycott - Advocacy Governments Regulatory environment Communities Legitimacy Employees Recruitment, motivation, retention - turnover Suppliers Sustainability - Chain supply risk Academics Support, innovation Investors FundingExamples of exposures to these opportunities or risks abound in the literature and continue to surface everyday. Some, having had a profound impact on how companies monitor and engage their stakeholderenvironment, have achieved a seminal status while others are more recent: When Jeff Jarvis coined the term “Dell Hell” and publically complained about substandard customer service, the impact on Dell bottom line was severe (it coincided with a market downturn and the subsequent fall represented tens of millions of dollars). On the plus side, it also served to awaken Dell’s interest in Social Media and the company is now a very strong actor in this department. Much more recently, when cinematographer Kevin Smith used twitter and his blog to complain about his eviction from a plane by a Southwest Airline’s captain, the blow resounded equally strongly.These are two examples of customers complaining about what they feel was bad service, and yet themechanisms involved where very different. In the first case, Jarvis’s blog was an influent – and SEO savvy –blogger in a tightly wound network of business blogs that all relayed the complaint and linked to his originalposts. At the same time, Dell’s online presence was weak, so that any search for the keyword Dell placed DellHell at the top of search engine’s results, greatly damaging reputation and sales. In the second case, KevinSmith’s celebrity twitter and blog following ensured that his message was seen and echoed by enough peoplefor Southwest to take immediate notice and action. In both cases, however, a single dissatisfied customer wasable to elicit reaction from the organisation’s top management. 5
  6. 6. Granted, these were very special cases of famous or influential personalities. As CNET (Feb 16 th, 2010) puts it:“Nobody walks around with a Twitter follower count or blog URL painted on his or her forehead, and manyextremely popular bloggers still live in relative physical anonymity, which means that the customer relationsbusiness is like a game of Minesweeper--you can never be sure what might blow up in your face.” But morehumble consumers have achieved the same results by acting together as, for instance, when British studentslaunched a Facebook protest group against HSBC’s legal but crippling interest rates and forced the financegiant into submission in only a few weeks. Toyota’s recent recall ordeal was amplified into a PR nightmare by the cultural attitude (lack of response) of the company’s leadership. The story received enough coverage in the press not to need any more here. What is less well known, however, is that Toyota probably avoided several other recalls with the help of former regulators hired by the automaker to work closely with National Highway Traffic Safety Administration (Bloomberg, Feb 13th, 2010). While Toyota’s PR may have been criticized, their efficient engagement with a handful of highly important industry stakeholders may have saved them many millions in this instance. Domino Pizza made the news in April (2010) thanks to a food abuse YouTube video. The video was filmed and posted by employees, a third type of stakeholder having found in YouTube an unprecedented reach for their concerns (or delirium, in this case). Beyond the social media (relative) novelty, employees have always been one of the most important of any company’s stakeholder groups. Attracting talent and reducing employee turnover have always been an important mission of HR. New media simply enlarges the list of ways employee sentiment should be monitored and engaged. While NGO’s have always played an important role in reporting abuses and defending communities, the Internet has again helped many rise to a point of prominence that would have been impossible to envision previously, forcing even the largest corporations to take notice : When EarthRights criticised Total Oil’s activities around the Yadana pipeline in Burma, the energy major was forced to react and created a website that now ranks first and second on Google for the Yadana keyword (which any online marketer will tell you how easy and cheap it is to achieve). Greenpeace’s attacks on Nestle and Sinar Mas with allegations of illegal deforestation and use of unsustainable palm oil prompted immediate strategic reaction from the targeted C-Suites. On a more collaborative engagement note, GSK’s recent campaign on vaccination in partnership with Indian NGOs awarded them a CSR award and a strong foothold in the emerging Asian pharmaceutical market. And EDF Energy (UK) won a recent BITC award for its partnership with British Red Cross that has provided support, during power cuts, to nearly 100,000 EDF vulnerable customers in Britain in less than two years. President Barack Obama recently forced BP into accepting to finance a $20 billion fund to pay the claims of people impacted by the Gulf Coast oil spill and was subsequently pressurised towards raising the escrow the $100billion, which would almost certainly have thrown BP into bankruptcy after its 50% market capitalisation fall. The political sphere, including lobbying and pressure groups, is one of the most obscure of stakeholder groups to monitor and impact. As a concluding example, in a recently hot topic (July 2010), here’s what Bernard Ramanantsoa (Dean, HEC School of Commerce, Paris) had to say about Raymond Domenech’s managerial expertise during the Football World Cup: “His main mistake was to assume that a team spirit could be achieved by cutting the team off from the outside world. But in sport and in business, the most efficient cultures are developed by opening up to all stakeholders whether they are fans or clients, sports reporters or business journalists. Closing yourself off in this way is a classic, deadly mistake.” (BBC News, July 12th).The list goes on: some journalists, industry experts and lawyers have become prominent bloggers of specifictopics (think Robert Amsterdam and Shell Oil, for instance). Companies have seen their license to operate inreligious countries for failing to address appropriate communities with the appropriate protocol. 6
  7. 7. The bottom line is, communications with the media, while indispensible, is no longer enough. StakeholderEngagement is a business imperative and in The Relation between Stakeholder Management, Firm Value, andCEO Compensation: A Test of Enlightened Value Maximization (Nov 2009), Bradley W. Benson and Wallace N.Davidson III prove that stakeholder management positively affects firm value and that trying to maximizestakeholder welfare also maximises firm value.1.3 LINKING CSR AND STAKEHOLDER ENGAGEMENTSo, CSR (a.k.a. CR, Corporate Responsibility) and Stakeholder Engagement are two business necessities havinga strong impact on Enterprise Reputation. But the essential link between the two has often been veiled andmost organisations have separate and disconnected services for both and too many seem to think it’s enoughto publish an occasional Citizenship Report on a separate segment of the corporate website.The above picture is typical of lengthy CSR reports describing the various contributions to the defense ofenvironment or the social wellbeing of some minority in a corner of the world, sometimes quite unrelated tothe company’s core business. This is in no way a criticism aimed at the authors of these reports. Rather, it isjust an illustration of how difficult it has been for organizations to grasp the concept pragmatically and applyit to their own businesses and their stakeholder engagement.S O WHERE DO WE START ?The European Commission’s rather vague definition of CSR is: « A concept whereby companies integratesocial and environmental concerns in their business operations and in their interaction with their stakeholderson a voluntary basis ». Wikipedia proves more helpful with this sentence “Essentially, CSR is the deliberateinclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People,Planet, Profit.” I would personally sum it up by saying that CSR, the non-financial part of a company’s integralreporting is essentially about: Showing its compliance to the various rules, laws, codes and norms regulating its activity Demonstrating its understanding of its impact on the various communities surrounding its activity Demonstrating the influence these communities’ expectations exert on its policy Measuring the impact of its CSR communicationHOW DOES STAKEHOLDER ENGAGEMENT HELP?Defining a CSR strategy is beyond the scope of this paper or indeed of Augure’s business. However, ourexperience in international stakeholder engagement projects has taught us some facts relating to the abovedefinition. Engaging with stakeholders early ensures that issues addressed in the CR policy and report are the most meaningful. The insights gained from this exchange also provide new business opportunities. Corporate reputation is enhanced much more than by pushing forward the most charitable initiatives if these are unrelated to the main concerns of the stakeholders. 7
  8. 8. The usual forms of engagement measurement (outreach, media analysis, social media evaluation …) alsoconstitute very precious data for CSR reports. In particular those recommended in the AA1000 discussedbelow. So, far from being two isolated necessities, CSR and Stakeholder Engagement actually complementone another as the latter acts as precious a source of information and guidance for the former. Andreciprocally, a CSR report, when it is to the point and informative, actually provides tremendouscommunication material. This point is particularly important as a 2009 study by Business In The Communityshowed that the value created by CSR and unaccounted for by organisations amounted to Billions of poundsin the UK only.W HAT ABOUT CRISIS MANAGEMENT ?Crises spread faster online than in traditional media and can take on a viral aspect on social media, if“interesting” enough to a population group. In a crisis situation, the company that is known for being sociallyresponsible – that is, known for believing it has the duty of measuring its impact on the communities in whichit operates and compensate for it – is far better positioned to receive a favorable outcome than anorganization that doesn’t seem to care. It is bad for a company when the public first becomes aware of itsexistence through controversy. It is worse still when the company doesn’t even know whether the people ofthe community think it cares. An executive who maintains he does not need to conduct even basicstakeholder attitude and awareness research is operating on potentially incorrect, internally focused,assumptions and may be exposing his company to severe strategic and reputation risks. 2—HOW TO ENGAGE2.1 PRACTICAL COMPLEXITIES OF ENGAGEMENTThis new landscape introduces a complexity in that the long term communication plan not only has to includenew themes such as corporate responsibility but also has to co-exist with much shorter cycles of monitoringand engagement with stakeholders. Indeed, information exchanges between stakeholders occur at a pace nolonger controlled by the organisation and via channels it no longer owns. While communications before theweb 2.0 used to take place at the company’s initiative and was delivered to a well known set of relays (often,journalists) who then transmitted it to the general public, stakeholders can now inform and impact oneanother regardless of expertise, professional status and habilitation by the company.As is often the case, this disintermediation has made the landscape more complex, creating niche media forcertain categories of populations or business goals: think Facebook for teenage social life, LinkedIn forprofessional networking or niche forums for instance. Except that the landscape is undulating and constantlyshifting. Take Facebook: the social giant may be on the brink of desertion by early adopting teens now shyingaway from the scrutiny of their moms and dads who are themselves joining the network in great numbers.Facebook is also rapidly becoming a media outlet for large and small businesses turning their backs to theresearch and copywriting complexities of corporate blogging and might be stealing some of LinkedIn’sthunder for engaging professional peers. As another example, Facebook recently rolled out several features(homepage button, email, social inbox, profile updates) that required partnerships with Mircosoft in a moveto make its platform more suitable for small businesses. The giant has also just signed global partnershipswith Adobe and Omniture to optimize marketing campaigns, so who knows what the face of Facebook will belike tomorrow, what topics and populations it will favour and what stakeholder groups it will harbour? I cer-tainly don’t know and the same questions can be asked of many other social venues, particularly in themoblie/localisation niche, which will alter the ways in which people engage with one another.The solution, obviously, lies in constant monitoring of this evolving landscape (online and offline) to: identify important stakeholders and groups map them and their opinions on the organisation’s strategic issues engage them appropriately and monitor impacts in a fashion quite similar to the agile methodologies used in product development, lean management or strategy Kaizen. 8
  9. 9. The United Nations, partner companies and thinktanks have proposed several CSR reporting standards andengagement guidelines such as the AA1000, SA8000, ISO 14000, IAASB standards, ISEAL member standards,GRI Sustainability Reporting Guidelines, OECD Guidelines … to help with this cyclical process. In spite of this,most organisations seem to fall into two separate groups. One in which Stakeholder Engagement has becomethe main driver in strategic communications planning and implementation. The other in which all aspects ofstrategic management are fragmented into disconnected silos of sustainability, CSR, risk management or in aHQ / Business Unit opposition … with no « big picture » or long term orientation. This becomes all too evidentin the CSR reports produced by the members of the latter group and in the very low return on investment oftheir programs that fail to create advocacy by not engaging the right stakeholders on the correct topics.2.2 FOLLOWING ENGAGEMENT GUIDELINESThis great discrepancy in quality of practice and outcomes produced can threaten the credibility ofstakeholder engagement itself. To combat this, two standards in particular are very interesting. The GRI G3and the AA1000 series of Assurance Standards (and associated Stakeholder Engagement Handbook) weredeveloped in association with the United Nations Environment Program. They provide practical andunderstandable guidance on how to develop a robust and balanced stakeholder engagement program.The GRI G3 is the third iteration of a reporting framework that, by means of the use a series of set Protocolsand their associated Indicators, aims to achieve clarity, transparency and comparability of reporting. It setsout guidelines for establishing the boundary of a report and indicates what should be contained in the reportwithin the established boundary. It also aims to enable a reader to know what to look for and where to lookfor it. Further information can be found online at www.globalreporting.org/ReportingFramework/G3Online/The AA1000SES (Stakeholder Engagement Standard) is a part of the AA1000 series which provides guidancefor continuous improvement and to promote ‘accountability for sustainable development’. This is as set ofprinciples to guide socially responsible business practices and an assurance standard by which compliance tothese standards can be audited or ‘assured’. It serves to enable a company to adopt a culture of ‘continualimprovement’ – it is not simply a case of a company being compliant or non compliant. An assurancepractitioner can refuse to assure an organisation to the standard if the assurer is not satisfied of the reliabilityof the evidence presented, or can assure the organisation while detailing areas for improvement in the assur-ance statement which is generally included in the sustainability or annual report. It is worth noting that thestandard does not seek to standardise the operations of an organisation, but rather to give guidanceconcerning the principles which govern those operations.Both the GRI G3 and AA1000SES are intended to serve as the corporate memory for all the organisation’sengagement operations and are founded around the commitment to Inclusivity, i.e. giving all stakeholdersthe right to be heard and be appropriately represented and afforded appropriate resources, plus acceptingthe obligation to account to them. They hinge on the principles of Materiality and Completeness. In addition,AA1000 encompasses the principle of Responsiveness. Tony Hayward and Lloyd Blankfein’s ignoring of theserules earned them their recent (unofficial) rankings as worst CEOs of the year.I NCLUSIVITYEnsure all your stakeholder groups are represented at all levels of decision making, including governance.Map influence between key stakeholders to ensure engagement relevance and impact. Standards andeffective software help to: Aid in the establishment of an effective methodology for identifying stakeholders and stakeholder groups. Provide a organisation-wide taxonomy of stakeholder groups and organisations. Help ensure that the method of communication is appropriate to the relevant stakeholder group (ie. Adult literacy, access to technology etc.) Help develop a lasting relationship to strengthen the mutual levels of trustM ATERIALITYMateriality ensures outreach appropriately addresses stakeholder issues and concerns. Stakeholders areclearly linked to the issues concerning them and their advocacy ratings are measured. Standards and effectivesoftware help to: 9
  10. 10. Identify material issues from a wide variety of representative sources Provide a centralised repository of material issues and their relative importance to various strategic pillars of the organisation Relate all outreach to relevant material issues Demonstrate on-going commitment to stakeholder engagement on all issues (not a one–off)C OMPLETENESSThe organization is expected to demonstrate the completeness of its understanding of stakeholder concerns,that is, “views, needs, and performance expectations and perceptions associated with their material issues”.Standards and effective software help to: Explore the material concerns and associated needs, expectations, perceptions and views of stakeholders Design and implement the organisation’s engagement strategy Define measurement criteria and indicators of the quality of stakeholder engagement developed by the organizationR ESPONSIVENESSResponsiveness requires responding coherently to stakeholders’ and the organisation’s material concerns.Practically, the organisation should be able to communicate that not only have they identified and listened tostakeholders, but also that they have reacted to and acted upon their concerns. The organization’s responsemay not fit in with the points of view of all stakeholder groups. Standards and effective software help to: Effectively communicate back to stakeholders on issues and company policy Prioritize responses and communication according to the importance of stakeholder groups Measure the evolution over time of the opinion of stakeholders on certain issues 3—THE ENGAGEMENT CYCLEBehind these principles lies a very concrete set of recommendations for engagement best practices in arepeating cycle of mapping, engagement and impact analysis:Step 1 Identify and map stakeholders and manage the relationships between them. Are they connected?(Note that you also need to be able to communicate the stakeholder map to the stakeholders themselves)Step 2 Identify issues associated with your company’s activities, products, services, sites and the subsidiaries.Do these issues conflict?Step 3 Establish a strategy for stakeholder engagementStep 4 Establish a stakeholder engagement plan and communicate it to stakeholdersStep 5 Establish appropriate ways of engagementStep 6 Identify and assess stakeholder capacity needs both in resources (e.g. staff, money, time) andcompetencies (e.g.expertise, experience). The organisation shall commit itself to responding to these needs inorder to enable effective engagementStep 7 Analyse what has been learnt from stakeholder engagement to adapt the strategies and operations.Communicate these insights and the intended responsesStep 8 Measure, monitor and assess the quality of the stakeholder engagement practice… Re-map stakeholders and re-define the stakeholder strategy where changes have occurred or new learninghas been gained. 10
  11. 11. Lack of executive buy-in aside, the more prominent limitations to this plan are the lack of coordination andglobal strategy in stakeholder engagement, and the lack of actionable insights, making it impossible for theorganization to hinge its policy on its insights. Many LinkedIn discussions illustrate the communication issuesbetween business units and headquarters and the astonishing mass of local engagement data stored in silosinaccessible to anyone crafting a global strategy and putting global monitoring in place. This alone explainsthe huge communication quacks that plague even the largest organisations (for instance, when an energysector major announced record benefits and several thousand redundancies in separate press releases on thesame day).Therefore, communication with stakeholders and the consideration of opinions is no longer the sole reserveof traditional communications silos such as PA, PR, Investor Relations and Internal Communications but rathershould be integrated into the organisation as a whole and continue on an ongoing, iterative basis. A company-wide collaborative platform and effort are required to synchronise monitoring, planning, engagementcampaigns and impact analysis around corporate pillars. We articulate our software suite and services aroundthree phases encompassing the above steps and making them practical. The phases are described below.3.1 MAP (PHASE 1)Identifying Stakeholders is an extensive process requiring access to many sources of data. For instance, a fewtypes of stakeholders are listed with potential sources of information in the table below:A successful identification strategy requires access to all these sources – across the many business units andStakeholder Type SourceCustomers CRMSuppliers Company data, dedicated websites, NGOs …Media Data providersBloggers Data providers, blogs, twitter, social mediaGovernment Government websites, Data providersExperts Dedicated websites, Think Tanks …NGos Dedicated websites, UN …Employees HRInvestors Specialised providers, dedicated websites …countries in which the organization is present – and the ability to merge them in a common repository alongwith contact information, communication protocol, topics of interest …The above list is not exhaustive and other types of stakeholders and corresponding sources may need to beconsidered for specific projects (think of fishermen in the Gulf and who represented them in their battleagainst BP). But while it is essential to have access to potentially millions of people, the list of stakeholdersthat effectively need to be engaged has to be drastically reduced, to proportions where true qualityengagement is realistic. So, what does this change for a communication team? 11
  12. 12. While it may have been enough in the past to serve a few hundred journalists the same message, it is nowoften necessary for companies operating at an international level to address the – usually conflicting –concerns and needs of 50.000 or more stakeholders in various countries, social and political contexts andmutually incompatible creeds. Technically, that’s not an issue. 500 or 50.000 makes absolutely no differenceto any modern database. But in terms of strategy and operational tactics, the landscape has changed forever.This business threatening complexity has two aspects to its evil. Obviously, the time and logistics required toaddress a contact base that has expanded a hundred fold are a serious consideration. Much more critically,though, whatever the technological tools at their disposal, human beings have a limit to the number ofrelationships they can maintain in a social environment. In spite of the thousands of Facebook friends andLinkedIn connexions boasted by today’s link-a-holics (LIONS, in LinkedIn terminology), Robin Dumbar’s studiesposited 20 years ago that the vast majority of human brains are wired to maintain lasting relationships withfewer than 200 people (2). Since then, slightly more optimistic studies have raised this limit, though never upto 300. Beyond this lies the faceless rest of the world. In company terms, this could translate to 150 tier 1journalists and the rest of the public, totally ignoring the existence and voice of the other 90% of yourstakeholders. And the real threat is not just forgetting a large chunk of your stakeholder base, but consideringit as a diffuse unit in your communications and ascribing the same preoccupations and thought processes toall its members.The conclusion is that identifying stakeholders for a communication campaign requires the ability to access tomillions of qualified contacts via multiple sources and to extract and prioritise a manageable and relevant listbased on influence or importance related criteria.2 - Interestingly, Facebook recently posted statistics indicating that even power users maintain regular relationships with at most 130friends. And the recent profile modifications allowing the selection of “featured friends” only highlights this. 12
  13. 13. IDENTIFYING ISSUESBoth GRI and AA1000 cite the principles of Materiality and Inclusiveness as being at their conceptual heart.AA1000SES defines materiality of a report as follows: “requires knowing stakeholders’ and the organisation’smaterial concerns *…+ A concern should be considered material if it influences or is likely to influence thedecisions, actions and behaviour of stakeholders and/or the organisation itself.” The second sentence isespecially important in that it makes it clear that not all stakeholder concerns should be considered equallyimportant or in isolation. For instance, while many members of the public or transportation professionals mayvoice their concerns about the high prices of petrol at stations, there is actually not much an oil & gaz majorwill do to change this situation as so many factors external to its policy also influence this price. On the otherhand, an article raising serious doubts about security of supply in a strategic zone printed in a limiteddistribution but expert publication will grant its author a much higher priority in that organisation’s communi-cation plan.Therefore, the materiality principle principle states that all issues affecting stakeholders should be identified,recorded and prioritised according to significance and relevance (this is elaborated upon in the GRI concept ofSustainability Context). Platforms ranking all topics equally or algorithmically based on occurrence counts willmiss the point.Finally, stakeholder identification and opinion monitoring should extend well beyond the limits of onlinesources (and in particular social media) Customer feedback, for instance, is usually monitored via a CRM or internal channels, although some companies are using twitter extensively to this end. Members of government and other political figures involved in lobbying may have blogs or other modes of online expression, but following their mandates and their work in commissions requires very specific sourcing and processes. One to one meetings must be logged to record opinion. Forms and polls can be sent out to gather information of groups before and after outreach events … 13
  14. 14. MAPPING STAKEHOLDERSOnce stakeholders and groups have been identified and their issues recorded and linked to those of theorganisation, it is important to prioritise them and map them. The chart below shows an example of mapping(dereived from the Mitchell Grid) for one communication issue – Open Source software – in whichstakeholders, grouped into categories relevant to the organisation and rated for activity and advocacy. Theposition of a group on the graph and its relative size determine the organisation’s attitude towards it.In a multinational organisation, these ratings of advocation should also be linked to the geographical positionof the stakeholders as opinions on a same topic will vary greatly in various countries and regions.3.2 ENGAGE (PHASE 2)The real goal, therefore, is to determine the most important concerns of your various stakeholderpopulations, address them in your business strategy and communications and provide accurate informationon these two processes to all concerned and in due time.Some of this has to do with technology. Most aspects rest on your experience and expertise. But a greatliability in large corporations is the sheer number of internal actors delivering information and messages tothe outside world. Reports show that many Stakeholder Engagement efforts are being conducted today in anon strategic and uncoordinated manner and that many further fail to show that engagement leads tomeasurable change because of a lack of actionable insights. This pauses a serious threat to credibility andreputation. Only a global strategy and thorough implementation of stakeholder engagement campaigns via atruly collaborative platform can avoid this.To establish a communications strategy, you can use your stakeholder maps to prioritize your stakeholders intiers according to your communications pillars, the material issues of your stakeholders and their relativeimportance to the company’s operations. This information must be shared throughout the organisation. 14
  15. 15. It then becomes easy to determine who to engage one to one and dedicate the most effort to and who toaddress in a more generic fashion via a range of communications tools: Press rooms are very effective way getting your story out to the world. When carefully crafted press releases are sent out via wires, shared on bookmarking sites or other social media and contain links to documents hosted on a dedicated press room, the SEO effect goes a long way towards placing these documents at the top of search engine results for the search results the release was designed around. The mechanism and strategy was described in depth by David Meerman Scott in The New Rules of Marketing and PR (Wiley, 2007) (3). One or more corporate blogs can have similar effects. Wires are a very useful tool in the engagement kit. First because they reach out to people who have opted in and guarantee a lower rejection rate than traditional mailing. Secondly because news sent to wires get picked up by press agencies who can relay them. Google gives high credibility to these sources (or has direct contracts with some) so again the document can potentially occupy the top spots in search results. As described above, wires are most effective with press releases optimized for this purpose (ie not boring, making sharing easier and linking to your landing page or press room). An effective press release + wire + press room strategy is not enough to take care of all stakeholders but it at least ensures that your version of the story gets seen and is not lost in a sea of higher visibility writing. Remember that Dell Hell was only that painful because Dell had no Internet presence to speak of and left an avenue of free expression to SEO savvy Jeff Jarvis. Social Media: Engagement strategies depend on individual situation and context, but more often than not, it is important to send information where the targeted audience is most likely to find it. Sending a press release via a wire to calm a Facebook riot is unlikely to prove very effective. Twitter has become a very effective medium for customer relation management (examples include ComCast, Dell, Microsoft, Orbitz, Starbucks, Virgin Atlantic …), as described in this Mashable Article and this YouTube interview of social media guru Guy Kawasaki about his experience with Virgin Atlantic. Mass mailings of the paper, fax, email or mobile variety are nothing new and, in spite of severe – and often justified – criticism, are still some of the most effective ways of reaching and impacting your target. The qualities of emailing – ease of use and low cost – are also its pitfall in the hands of those who gave it its bad press. Compensating for rising rejection rates by increased mailing frequency (who heard spam?) and pressure is running head down into a PR brick wall. Instead, use the stakeholder maps and topics of interest you have constructed as simplified versions of the keyword search tools used by direct mail marketers to improve deliverability by ensuring emails are sent out to interested parties only and make sure the content actually provides helpful information.3 - Highlights from this book are available for download here :http://www.davidmeermanscott.com/documents/New_Rules_of_PR.pdf 15
  16. 16. And, in spite of the online community management craze, old fashion cellulose based merge mails should not be totally discarded. True, you will not be using them as often as other means of communication, but some (many) situations and protocols still require letters to be written: Patrons of large exhibitions, if you’re a museum; elected representatives and members of government … While many have become active bloggers and are actively embracing web 3.0 practices, if you ever send poke to a Brussels judge to complain about a recent international ruling, please drop me a line to describe how that went. Events are perfect, if expensive, occasions to create a much deeper form of engagement, giving you the opportunity to present products, people or even strategies in a more tactile environment and to make the invited stakeholders feel special. Events are great for managing one to few relationships and foster a stronger relationship with Mass Influencers (4). Appointments, phone calls … are obviously to most direct and privileged way of interacting with your stakeholders and, equally obviously, totally unrealistic for a large contact base. One on one interviews can be conducted during events or periodically for the Dumbar imposed Tier 1 group of stakeholders you have identified on each of your communication pillars. Again, stakeholder maps help target this audience most efficiently and access to a collaborative platform to log such events and their outcome enables other services to optimize their relationships with the outside world.4 - For more on this, the Forrester Report Tapping The Entire Online Peer Influence Pyramid can be found here:http://www.forrester.com/rb/Research/tapping_entire_online_peer_influence_pyramid/q/id/56537/t/2 16
  17. 17. THE ROLE OF A COLLABORATIVE PLATFORMSo why not take your paper and ink pen, grab your phone and log on to LinkedIn to handle all these tasksdirectly on their home turf rather than rely on software? You could, provided someone had gathered theinformation needed for stakeholder mapping. In this context, a collaborative platform serves the followingpurposes (see also the excellent The Enterprise Value of Social Software): As recommended by the engagement guidelines, it serves as a Corporate Memory for the whole organisation thereby insuring consistency and completeness of reporting. It guarantees consistent engagement with the same stakeholders some time later if the employees or agency in charge of engaging have changed, again by providing a complete history of the relationship, the topics discussed and the outcome It ensures consistent messaging throughout business units and services whatever the internal political context (and corresponding silos) and the communication pillar. It makes it possible to compare the actions of the company’s various departments / business units / brands. Finally, it lets you trace and measure the effects of individual actions on the company’s reputation (or sales or whatever metric engagement is measured against). This is essential to shorten the map / engage / measure cycle advocated by official guidelines and to adapt to the more rapidly changing business landscape while maintaining the long term a communication strategy.3.3 MEASURE (PHASE 3)Measurement spikes disagreement in the communication community. In spite of warnings by the boards ofAMEC and the Institute of Public Relations, and the literature of gurus such as Katie Paine, measurement bestpractices are slow to spread. Many practitioners cling to media outputs and AVEs like they would to dear life.A part of this is probably due to the conundrum facing communication managers as they feel the growingneed to speak the same language as the board in their reporting, find ROI metrics where current practices canprovide none and are plunged into communication social venues that make these goals all the harder toachieve. AVEs being perceived as a financial evaluation of the team’s work (they aren’t) they are kept in theloop in spite of the increasing difficulty of assigning financial value to a mention on media such as forums ortwitter (not to speak about the invalidity of the concept in the first place).Again, the GRI and AA1000 help by defining engagement quality indicators. These are beyond the scope ofthis paper but can be found in the respective guideline documents. Here, we will focus on the followingobjectives for measurement: Link outreach to outcomes and facilitate information collation and evaluation with respect to guidelines. Evaluate communication efforts in a business related and actionable way. Aid plan the next short cycle of engagement.At the heart of measurement is monitoring. Monitoring of the press, online, broadcast and offline. Monitoringof blogs, forums and other social media, including comments to original posts. Monitoring of press releases,of parliamentary proceedings … More often than not, this implies crawling data from multiple providers andsources and merging it into a consistent database segmented along the same pillars and topics that served tomap stakeholders. At the risk of passing on a Paleolithic image of myself and Augure, I’d like to stress howimportant it is to include traditional media in the monitoring mix. While it is true that posts on social mediahave some influence on the immediate network of their author, the someone like me influencer crase is allbut fading. This also is revealed in detail in Edelman’s 2010 Trust Barometer in which the true influencers areshown to be experts, academics & analysts and the most trusted sources to be analyst reports & businessmagazines. This is not to say that social media should be ignored, but that the opposite is even moredangerous. 17
  18. 18. Our approach to monitoring is the following: Define a concise and manageable reading-list Define semantic rules valid for the industrial sector for semantic indexation of the monitored data on the corporate pillars, disambiguation and sentiment analysisIn Early Warning, Ben Gilad writes “The difference between facts and intelligence, or data and analysis is thatthe latter is an expert interpretation of the former. *…+ The essence of intelligence is seeing the same facts aseveryone else but interpreting them in a way that allows a better understanding of reality”. And Jim Williamsin Thinking about thinking: “Good intelligence with bad strategy produces mediocre results. Bad intelligencewith good strategy can be catastrophic”.This applies to monitoring and planning more than any other part of the engagement cycle and manymonitoring solutions are much more focused on structuring mass quantitative data into databases anddashboards than extracting valuable intelligence from the most relevant sources. Our approach is theopposite and in a blog post provocatively entitled Augure monitors 2 Billion blogs, we explain why we couldn’tif we wanted to and, perhaps more importantly, certainly wouldn’t if we could.Why we can’t is simple: there simply aren’t 2 billion blogs out there. Furthermore, in depth study shows thatout of the 100-200M blogs in existence in 2010, only a tiny fraction are spam free and have – more or less –recent content: fewer than 500 000 in total. This shows in the offerings of most data providers monitoringblogs, who provide the option of following subsets of a few hundred thousand clean blogs out of the manymillions they crawl.Why we wouldn’t want to calls for a little bit more explanation. But first, let’s be open about this. How manydo we monitor? That depends on the industry, but, roughly speaking, a few hundred. Hundred thousand?Nope. A few hundred, well targeted blogs. So the real discussion boils down to the advantages and drawbacksof such tightly wound reading-lists over the more traditional digital mass-anschluss.SMALL IS BEAUTIFULIt is useful, in some circumstances, to identify all sources of conversation mentioning a brand. But, in thecontext of stakeholder engagement, the focus on exclusively industry-related sources drastically reduces thenumber of targets: 50K on average, per industry, fewer than 500 with real thought leadership and following.For online sources, this allows for a high quality and deep extraction of the source’s content rather than theone size fits all RSS download of multi-million blog platforms. And while 90% of blogs share most of theircontent in their RSS feed, the remaining 10% that do not tend to be some of the most influent ones that needto draw you to their digital property to sell eBooks, seminars or other high-value content.It also simplifies benchmarking. Intensive crawling algorithms are constantly updating the number of sourcesbeing monitored and make the task of creating actionable time series very tricky. Reading-lists maintain aconstant perimeter for comparisons.Semantic/sentiment analysis is also made easier and much more accurate by confining the semantic field ofyour monitoring to a very specific area of interpretation. Noise reduction is greatly simplified.In a word – and in the context of stakeholder engagement – dealing with a well thought out, consistent list ofsources optimises many of the analysis steps expected from any decisional tool. And whereas quality analysisusually comes at the expense of processing lag (counted in hours or days) in mass-crawling platforms, itdoesn’t in a low volume approach. Data from our partner LexisNexis is published in our platforms less thanfour hours after being published on the web, and this delay can be reduced even more for specificapplications.WHAT ABOUT MISSING SOMETHING IMPORTANT ?The obvious worry is to miss out on some important news happening outside your monitoring perimeter. Thisis easily dispelled by examining the networks formed by blogs citing one another: it is easy to target a few 18
  19. 19. central nodes in the graph through which all information flows. By monitoring these centers of influence, allimportant discussion and information is systematically intercepted.To illustrate this approach further, imagine the best guidance system ever (not developed over a fewman-years but evolved over millions) to guide a complex entity through a complex landscape while warningabout impending attacks from various origins: vision. The human eye doesn’t treat all portions of a sceneequally. Instead, it concentrates detectors very tightly over a very small area in order to be able to analyse itwith great precision. Peripheral vision has much lower acuity but is very effective at detecting movement. Thiscompromise allows the brain the react much more swiftly and/or with greater accuracy in importantsituations than if detectors were spread out evenly over the whole retina. Monitoring works in the same way:you can either treat all (100 million+) sources equally and force them into a single dashboard or focus yourtechnological and human power of analysis on the most relevant reading-list and rely on alerts to direct yourattention to areas when necessary. For a more ethics-based point of view on this topic, you can read whatKarl Havard writes on eConsultancy.Beyond this prioritising issue, monitoring should also focus on extracting meaningful information based onthe expertise of the industry in which it will be used: intelligence versus data. It is obviously possible to relypurely on generic algorithms for semantic and sentiment analysis but it helps tremendously to includeknowledge of the field in the mix. Bear and Bull take on completely different meanings in financial andagricultural fields.Furthermore, in order to reduce noise, a monitoring plan needs to define strict identification semantic rules ingeneric sources and can afford to be less strict on more specialised sources. For instance, Orange or Apple areless likely to refer to fruits in IT magazines than in the daily newspaper and require fewer disambiguationrules in the former. Defining these rules is not an exact science and too little produces lots of noise while toostrict increases the number of missed positives. Ask anyone having monitored company names such as Total,or Augure for that matter (5). Real world disambiguation semantic rules can contain more than 20 lines orcomplex syntax, a far cry from the simple keyword mapping rules often found in monitoring tools.5 - Augure means Omen in French. 19
  20. 20. In purely automatic systems, the cookie also crumbles when retrieving information from forums. Consumerforums are an essential source from brand monitoring and product communication and trade forums areequally crucial for B2B marketing. But retrieving data creates difficulties for most platforms, posts spread outover many pages and product name littered signatures creating many opportunities for noise and missedpositives. Again, vertical information helps alleviate or totally eliminate these problems.Once data from the most appropriate sources has been collected with both as little noise and as fewomissions as possible and has been interpreted for semantic indexation and sentiment analysis, dashboardscan be created to represent the indicators chosen for the campaign. These preliminary steps are essential,though. A common reassuring misunderstanding is that errors in purely algorithmic solutions tend to cancelout leading to highly accurate results in spite of individual errors. Ahem … If things were so simple, editorswould simply sprinkle a little randomness in their software to improve performance. While it is true thatrandom errors cancel out, the final output value will converge towards the algorithm’s bias, not towards thetrue value contained in the data.Making this information meaningful to both the board and stakeholders in an integrated report impliestalking a different language than PR practitioners have in past years. Focusing on media outputs (number ofclips in the media) cannot transcribe the impact stakeholder engagement has on communities, not does itenable a company to define an engagement strategy. And, the chosen indicators do not have to be financialto speak to the board, either. Some indicators can be strongly related to the evolution of market share, othersare efficient at transcribing the opinion of a certain population in a certain region of the globe on a certaintopic. Balanced scorecards and corresponding dashboards are essential to describe the whole picture andprovide data for annual reports.Furthermore, providing actionable analysis to rethink a strategy and showing the direct impact of outreach onindicators are essential features of an engagement platform to achieve the virtuous cycle of continuousimprovement. 20
  21. 21. 4—Crisis ManagementIn the past decade, crisis management has taken center stage in communications and strategic management.The collapses of financial empires, environmental devastation caused by the industries throughout the worldand the social misconduct of hitherto well regarded brands have taken a heavy toll on the reputation oforganisations and their leadership. The role of social media in the emergence and staggering speed of propa-gation of these crises has been described at length at the risk of being maybe a little over-inflated in somecircumstances.Crisis management includes strong focus on public relations to recover any damage to public image andassure stakeholders that recovery is underway. Four elements define a crisis: A threat to the organization An element of surprise when the crisis begins A short decision time More often than not, some hidden (or not) internal problem at the root of the threat. Industry dissonance, some misdeed, security failure …While risk management focuses on assessing potential threats, crisis management deals with them after theyhave occurred. However, thorough stakeholder engagement practice helps on both fronts by facilitating: The detection of early warnings of danger. Weak signals are more often than not found in be found channels that are easily monitored by the organisation (customer relations, social media) before they spread widely and gain momentum. Preparation and scenario rehearsal. Reluctance to make crisis preparedness a priority and relying on weak, untested plans are some of the main mistakes that allow an incident to grow into major turmoil. The intense communication rhythm imposed by containment and damage control tactics. Here, having built advocacy and a strong relationship with stakeholders is a tremendous help to find relays to your response. The long term recovery process (up to 4 years). This phase of profound fragility should be broken up in to short term achievable objectives 2 to 3 months long each corresponding to a small campaign. Constant monitoring is vital to detect new attacks before they can be devastating (6).6 - The latter two steps are very well described by Leslie Gaines-Ross in her book Corporate Reputation: 12 Steps to Safeguarding andRecovering Reputation (Wiley, 2008). 21
  22. 22. SO, WHAT ABOUT SOCIAL MEDIA?Crisis can originate online (Domino’s Pizza employee video, Student Protest against HSBC, Greenpeace OrangUtan video against the use of unsustainable palm oil, Dell Hell) or can simply be relayed or amplified via socialmedia.The more organised the attack and the weaked to organisation’s online footprint, the harder the blow andthe more reach the movement obtains. Below are two examples of fake twitter accounts used to criticise acompany:Here, the @BPGlobalPR account started on the early days of the Gulf BP disaster and spread as fast as thespill to 190.000 followers in just a few months. Compare this to the 7000 followers of the official BP account.BP never attempted to close the account or sue its creator, even suggesting that it was only fair to allowpeople to blow steam given the gravity of events. Endless conversations followed to determine whether BPPR and Crisis Management staff were geniuses or idiots. Whatever BP’s intention, Leroy Stick (the alias forthe @BPGlobalPR account) went on to provide hundreds of highly critical tweets – and a good old laugh – tohundreds of thousands of viewers. This kind of reach would cost a great deal of money to achieve via aneMarketing agency.@ATT_Wireless_PR is slightly different, originating from an unsatisfied customer. The account has onlyattracted 1500 followers but has also been serving very negative messaging for many months.Similar examples can be found on Facebook and other networks. So what should an organisation do to dealwith a social media revolt? A first, simple, answer can be found in the tweet below: 22
  23. 23. Why consider social media separately from other forms of potentially harmful exposure? In spite of what isheralded by some eReputation actors, there is nothing transcendent about social media. Social media belongto a tightly connected network of sources of information and expression outlets, consumer voicingsatisfaction or concerns on forums, journalists hunting for ideas of information online, analysts posting blogsummaries of their reports …, and need to be monitored closely as part of a carefully thought out plan ratherthan stigmatised and considered in isolation.A second clue comes from the other side of the fence. In an interview given to PBS, Leroy Stick (the manbehind @BPGlobalPR) declares: “But more importantly, in terms of corporate responsibility I hope this is amessage to people that your brand does not belong to you. If people perceive you in a certain way, there’snothing you can do about that. There’s no amount of damage control you can do to help that. I hope thatwhat it could ultimately lead to is actual corporate responsibility. Rather than covering your brand, youactually try to relate to people, see what people want and then hopefully make progress.” Two precioustakeaways from this are: Your brand does not belong to you. Not only does this imply the need for efficient monitoring but also points to the present of some and the future of many brands: “be prepared to let go of your brand”. One important corollary is the absolute necessity of being at the source of all information regarding your brand (via press releases, press rooms, mailings, social engagement …) in good times and in bad, rather than let others tell your story their way. The second is that there can be huge reward to letting go and actually helping the transformation process along. During the Mentos + Diet Coke video episode, Mentos organised video contests and road shows to promote the viral effect and hugely benefitted from coverage worth tens of millions – and sales – while Coke maintained a more distant position and had to rely on advertising on the website that originally posted the first videos to achieve the same effect. The ability to let go may be the essential difference between CEOs who successfully embrace social media (Michael Dell [Dell], Tony Hsieh [Zappos], Steve Jobs [Apple], Allan Mulally [Ford] and Howard Shultz [Starbucks], to name a few) and those who HATE IT (7). Make your Corporate act Responsible. Harm no one and thou shalt not be criticised. It sounds naïve but Leslie Gaines-Ross takes a similar stance when she writes (in the book Corporate Reputation) “Reputation wounds are often self-inflicted”. In the vast majority of cases, crises are due to technological issues (BP spill, Toyota brake recall, kryptonite locks), confrontation (KitKat vs Greenpeace, Nike boycott by PUSH), malevolence, preference of short term gain over social well being (Shell and the Ogoni people), deception, leader misconduct. The unfounded, social media amplified crisis is a myth. Even Domino Pizza’s nightmare video may to some extent have been fuelled by the partly admitted lack of quality of the product. Swift response on the very medium that started the drama and new recipes actually seem to have increased revenue (8).So, should CEOs actually forget about social media altogether? The truth is the @BPGlobalPR sold manyT-shirts to raise funds but, in spite of its tremendous following, played a very minor role in the approximately$100B drop in market capitalization that occurred between late April and late June, 2010. In the AdAge articleOnce Brand Takes Flight, Its Hard To Bring It Down (9), Al Ries argues that the sheer inertia of major brands issuch that they are almost impervious to bad (or good) news in the long run.This in no way implies that social media should not be reckoned with. Social media are an immense force inpublic relations and corporate reputation management. But they should be considered as opportunitiesrather than mere threats by applying simple rules: Accept loss of control of your brand and messaging, but always be at the source Monitor efficiently in real time Engage where the stakeholders dwell rather than trying to impose your turf (website)7 - http://www.deminghill.com/blog/corporate-social-media/why-executives-hate-social-media/comment-page-28 - http://www.annarbor.com/business-review/redesigned-recipe-leads-to-sales-increases-for-dominos-pizza9 - http://adage.com/columns/article?article_id=143631 23
  24. 24. 5—Conclusion: Benefits of EngagementMcKinsey write in their June 2009 Quarterly Rebuilding corporate reputations: “Now more than ever, it will beaction—not spin—that builds strong reputations. Organizations need to enhance their listening skills so thatthey are sufficiently aware of emerging issues; to reinvigorate their understanding of, and relationships with,critical stakeholders; and to go beyond traditional PR by activating a network of supporters who can influencekey constituencies. Doing so effectively means stepping up both the sophistication and the internalcoordination of reputation efforts. Some companies, for example, not only use cutting-edgeattitudinal-segmentation techniques to better understand the concerns of stakeholders but also mobilizecross-functional teams to gather intelligence and respond quickly to far-flung reputational threats.”And, in a response to the DemingHill Executive’s Why Executives Hate Social Media,Eric Qualman (founder ofSocialnomics) suggests reasons why Executives should love Social Media, namely: Unfiltered Feedback Authenticity Low Cost Six SigmaThe same can be said of all stakeholder engagement as the process described in the GRI and AA1000guidelines provide the opportunity for constant improvement and detection of early warnings and shifts inopinion before they become fully blown crises.The diagram above describes the dynamics of a crisis and the traditional response tactics. The main takeawayis that, as time goes by, the organisation has a greatly decreasing ability to influence its outcome and will doso at greatly increased costs. By the time lobbying has to be resorted to in order to influence governments,the predictable losses and consequences are already staggering. Addressing issues effectively as early aspossible greatly improves the odds. No amount of stakeholder engagement will stop an underwater oil wellfrom leaking millions of barrels into the sea but it may improve your company’s perceived ability to do so andinvolvement to slow the anger and financial landslide. To an extent, a crisis does not need to permanentlydamage a reputation. Corporate reputation being the sum total of perceptions by individual stakeholders,companies can use stakeholder engagement to turn what is a negative event into an opportunity for positivechange.Stakeholder engagement is also indispensible for CSR practice and reporting. 50% of indicators used in theGRI-performance are driven by stakeholder engagement and dedicated to areas where intangible values needto be measured. CSR without stakeholder engagement is therefore only partial and lacks credibility and10 - http://socialnomics.net/2010/08/09/3-reasons-why-ceos-hate-social-media 24
  25. 25. relevance (materiality). Consistent reporting is not only for the warm feeling of doing things the right way asrecent British Brands Group research has shown that “billions of pounds of value is currently hidden as brandowners do not measure fully the impact of their CSR activity”.In large and complex companies, formal Stakeholder Engagement can be tricky to turn into actionable insightsfor senior management: Stakeholders in the various business units and headquarters are engaged by different services and the history of this engagement is either lost or hidden in silos. Stakeholders groups can have partisan and conflicting points of views reflecting local levels of information and social priorities.Stakeholder Engagement dealt with on a local level then often results in uncoordinated and inconsistentmessaging and counterproductive results. Avoiding this requires global intelligence on stakeholder views inorder to foster global convergence of interests. A global and collaborative platform is required for this. 25
  26. 26. Before You Go!Thank you for reading this document. Please forward it to everyone you believe can benefit from any of itscontent, at work or in your industry. By doing so, you will spread ideas and share comments to evolve yourown strategy. If you’d like to do so, heres the link you can share: White Paper — Positive EngagementFor more discussion on Stakeholder Management, Corporate Reputation Management and Media Evaluation,you can subscribe to our blog Reputation in Action. This document was made up of posts originally publishedon that blog and you contribute to the ongoing conversation on these topics via your comments as well ascatch up on new events, trainings, features and ideas.Finally, if you’re curious about how you can use the ideas and our products to benefit your business, feel freeto contact us. We will be happy to engage in a discussion to assess mutual opportunities and will provide youwith more information on how you can use our software and services. You can find datasheets here, here,here and here. 26

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