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Lecture Five - Stakeholders, external and internal



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Lecture Five - Stakeholders, external and internal

  1. 1. Lecture Five: Stakeholder Engagement: Theory, Mapping, & Managers February 11th 2015 Lecturer: Tobias Webb
  2. 2. Stakeholder Engagement Other lectures covered employees, investors and NGOs. This lecture looks at other key stakeholders: • Ed Freeman on Stakeholder Theory (video) • Mapping Stakeholders • Engaging Middle Managers (Stakeholders?) • How to get the CEO / Board on board
  3. 3. A good example of a company getting stakeholder engagement wrong: Tesco • Suppliers • Communities • Financial stakeholders
  4. 4. Stakeholder Mapping How to make it work for your business
  5. 5. Who are your stakeholders? It's not so simple.. A stakeholder in an organisation is... “any group or individual who can affect or is affected by the achievement of the organisation’s objectives”. (European Business Ethics Network) "A stakeholder is any person or organization affected by or with the power to influence a company's decisions and actions" (Blowfield and Murray, “Corporate Responsibility”) Stakeholders are evolving…
  6. 6. From a business perspective, we've gone from: "A stakeholder is anyone that can screw up my business" (2002) to: "Stakeholders are source of innovation and risk management for my company" (2013) But most companies still live within the first paradigm of risk management...
  7. 7. Stakeholders, the “obvious” ones Primary: • Employees • Business partners & suppliers • Investors • The government • Consumers • Communities Secondary: • NGOs (but very important) • Institutions • Lobby groups • Academics and business schools • The media • Non-human stakeholders: Natural environment/climate change
  8. 8. So where to start? The most significant groups.. • Suppliers (child labour) • Communities (pollution) • NGOs (Greenpeace etc) • Governments (Compliance) • Employees (Innovation)
  9. 9. Stakeholder Mapping: A simple four step plan Step one: Develop a categorised list of the members of the stakeholder community Step two: When a list is relatively complete (not perfect: it's a moving target) assign priorities based on:
  10. 10. Stakeholder Mapping - Priorities Power (high, medium, low) Support (positive, neutral, negative) Legitimacy/Influence (high or low) Urgency (strong, medium, weak)
  11. 11. Stakeholder Mapping: A simple four step plan Step three: Focus on the ‘right stakeholders’ who are currently important Create a tool to visualise this critical sub-set of the total community
  12. 12. Stakeholder Mapping: A simple four step plan Step four: Benchmark this against Freeman's model of primary and secondary stakeholder to check relevance Primary stakeholders: Those without whose participation a company cannot survive Secondary stakeholders: Those that influence the company or are affected by it but who are not essential to survival
  13. 13. How do you justify this kind of work to your board? Stakeholder analysis helps identification of the following: • Stakeholders' interests • Their mechanisms to influence other stakeholders • Potential risks: Which groups may be affected by our work? • Potential opportunities: Who can help us solve problems? • Key people to be informed about the project during execution phase • Negative stakeholders as well as their adverse effects on the project
  14. 14. Embedding CR Lessons from management
  15. 15. When embedding, things to think about (1) • Objectives, goals, targets, milestones: What is the difference for you and your company? • How could you ensure your lower-level targets service your higher level objectives? • Build your own: Would you prefer to use external tools or frameworks to define goals and targets, or create your own? • The long-and short-term: What would help you in matching targets and timelines appropriately?
  16. 16. When embedding, things to think about (2) • Benchmarking: Are you aware of what others do, and how can you know what makes a good target in your case? • What role is there for ongoing performance comparisons? • Going off-piste: How can you prepare for when results are not as planned? • What about when the targets (or even the objectives) seem mistaken?
  17. 17. Embedding CR: Six Phases Phase 1: INSIGHT - stakeholder views, science based understanding of issues, benchmark of competitors and peers Phase 2: Public commitment of the “headline goal” – reducing carbon by 30%, reducing injuries
  18. 18. Embedding CSR: Six Phases Phase 3: Establish a baseline Phase 4: Allocating responsibility for action, the business must own the baseline, own the target and own the achievement
  19. 19. Embedding CSR: Six Phases Phase 5: Public reporting of progress. Revisit what you said you’d do, create the sense of continuity and recommitment Phase 6: Transparently revisit and challenge the original goal
  20. 20. Key lessons for senior managers • Clarify CR roles and responsibilities at board level, CR champion on the board, board- level committee • Articulate CR strategy clearly, reflecting board responsibilities and accountabilities. Put it in the mission!
  21. 21. Key lessons for senior managers • Encourage frank exchange and engagement at senior levels • Avoid delegation of critical decision-making that senior leaders need to make
  22. 22. Key lessons for senior managers • Join-up high-level communications, linking to the company’s CR goals, objectives and strategy • Champions and cheerleaders are critical: Don’t “outsource” responsibility for CR issues: Manage internally
  23. 23. Key lessons for senior managers The key lesson is: Don’t try to eat the elephant all at once: A bite at a time. Your road map is an invaluable tool
  24. 24. Ten fundamental things to remember in stakeholder engagement in emerging markets Tobias Webb, Founder, Innovation Forum
  25. 25. There are no secrets. Resist the urge to compartmentalize information. Treat all communications as if they were going to be posted on the internet for all to see (because, that may just happen). Act authentically but re member everything can and often will, end up on the record.
  26. 26. Interest alignment. Constantly search for alignment between company/project interests and stakeholder interests. Be creative – sometimes real opportunities lie outside the box. Interest intersections, where your interests and stakeholder interests align are valuable gems. Think inside and outside the box to find them.
  27. 27. Realistic timeframes and budgets for stakeholder engagement are vital. Make sure your CFO understands and approves a realistic budget. Help them to understand the cost of your failure.
  28. 28. Share credit – it will multiply Credit shared is goodwill created. Acknowledge, recognize, praise and promote partners and collaborators (government, NGOs, communities, organizations, etc). Do it every chance you can. You gain much and lose nothing.
  29. 29. Smile. Let your humility and humanity show. Credit shared is goodwill created. Acknowledge, recognize, praise and promote partners and collaborators (government, NGOs, communities, organizations, etc). Do it every chance you can. You gain much and lose nothing.
  30. 30. Understand before understood. Communication is critical. Listening is key. Seek to understand before you try to be understood. Think about how you say things: Use soft language, not hard, emotion generating terms.
  31. 31. Everyone is the face of the company. They should be trained in stakeholder engagement. Right person to right position: If you delegate, train and build capacity. Make sure your people know how do it right, never assume. This means your bosses, your reports and others across the company.
  32. 32. Simplicity is good. Complexity will cost you. Simple guidelines beat complex prescriptive procedures every day of the week. Be realistic. If your stakeholder engagement plan, process, procedure is too complex who is going to follow it. Don't turn stakeholder engagement into box ticking! Train and trust your people. Give them room to be creative and responsive but let them now where the boundaries are.
  33. 33. All is not the same. The importance of taking note of culture cannot be underestimated. Things change from country to country and project to project. Rigidity will often crack and break. Allow room for adaptation to culture and use it when necessary.
  34. 34. Stay in touch. Ongoing communications even when there is no obvious demand – Be open and transparent, it builds trust. Think about being counter intuitive with regular communications about the good and bad. Get the balance right. Communicate frequently enough that you are not forgotten but not so frequently that you are ignored. Don’t always wait for a big win, or failure.
  35. 35. 17 further lessons from a recent executive workshop can be found at: 27-expert-tips-on-engaging-stakeholders.html
  36. 36. A few examples: SAB Miller in Ghana (more here) • Developed new beer brand brewed using cassava roots sourced from small holder farmers in S Ghana • Considerable engagement with farmers, farming communities, agricultural organisations & regional Ministry of Agriculture personnel to understand the cassava industry and develop a local supply chain • Addressed supply security concerns and built trust • Beer brand then sold back into these rural communities
  37. 37. A few examples: Anglo American nickel mine in Venezuela • Created significant community housing programme • Provided healthcare, medical supplies for local hospitals, which lacked capacity and supply • Matched and exceeded local expectations • Flood and practical disaster assistance for communities • Resulted in ‘Chavistas’ protesting FOR the company
  38. 38. A few examples: Nestle and Golden Agri Resources (GAR) • 2010 Greenpeace campaign shocked Nestle to action • GAR, leading palm oil suppliers, pushed to work with Greenpeace and TFT (The Forest Trust) • Created market leading partnership to prevent deforestation. Set the scene for huge changes in the sector and in forestry (APP, Wilmar, many others) • Win-win outcomes created for all involved, including investors

Editor's Notes

  • (FYI - SABMiller have now launched two cassava beer brands in Moz and Ghana, in Uganda, they launched a brand also called Eagle, brewed using local sorghum a few years ago now. The sorghum and cassava projects were very different, different models etc. So might be best to change the slide to SABMiller in Ghana and Mozambique. My experience is obviously only from Ghana although I did visit the project team in Mozambique and same learnings would apply.)

    - Developed new beer brand brewed using cassava roots sourced from small holder farmers in Southern Ghana
    - Considerable engagement with farmers, farming communities, agricultural organisations and regional Ministry of Agriculture personnel to understand the cassava industry and develop a local supply chain
    - Beer brand then sold back into these rural communities

    - Key learnings:
    - Understanding of local context/cultural differences/how local markets work very important
    Local farming communities expressed concern about a large company coming into farming communities and buying up large quantities of cassava roots. Concern regarding adequate supply of other cassava based food products (like gari - ground cassava)

    - Building trust within local communities is key
    lots of farmers said various companies/organisations had come to them in the past promising to provide a market for their goods but failing to deliver. Be honest and keep people informed.

    - Engage on a personal level
    when you go into rural communities as a white person, stepping out of a big new 4x4, people are understandably wary and even hostile
    you need to know how to get people to feel comfortable and open up. Share a joke, pay a compliment, be genuine, listen.

    - Understand differing priorities/interests
    obviously the interests of a global brewing company are very different from the interests and priorities of a local farmer who wants to be able provide for his/her family. Sounds obvious but easily forgotten.

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