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Stakeholder engagement and management


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Basics of stakeholder engagement and management
By Andre Knipe, Sept 2016

Published in: Education
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Stakeholder engagement and management

  1. 1. Stakeholder Engagement & Management André Knipe 072 417 4084
  2. 2. Agenda 1. What is a stakeholder? 2. What is stakeholder engagement? 3. Stakeholder identification 4. The link between stakeholder engagement and operational integration 5. Stakeholder management – integrating expectations and priorities 6. Principles of stakeholder management ©AKnipe 20162
  3. 3. 1. What is a stakeholder?  Individuals and groups with a multitude of interests, expectations, and demands as to what business should provide to society ©AKnipe 20163
  4. 4. 1. What is a stakeholder?  "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… ©AKnipe 20164
  5. 5. 1. What is a stakeholder?  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) ©AKnipe 20165
  6. 6. 1. What is a stakeholder?  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" (2015)  But most organizations still live within the first paradigm... ©AKnipe 20166
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  8. 8. Origins of the stakeholder concept What is a stake? An interest or a share in an undertaking and can be categorized as: Interest Right – legal/moral Ownership ©AKnipe 20168
  9. 9. 2. What is stakeholder engagement?  Series of activities that seek to inform, consult and ensure the participation of stakeholders.  Allows stakeholders to have an influence on the outcome of plans and projects.  Ranges from informing stakeholders to actively consulting them in cooperative decision making. ©AKnipe 20169
  10. 10. Why engage and what are the benefits?  Effective and strategically aligned stakeholder engagement can:  Lead to more equitable and sustainable social development  Give those who have a right to be heard  Allow for the pooling of resources to solve problems  Inform, educate, and influence stakeholders ©AKnipe 201610
  11. 11. Why engage and what are the benefits?  Build trust among and between stakeholders  Enhances cooperation and provides the potential to build consensus and avoid conflict among stakeholders  Increases transparency in project activities and legitimacy of decisions  Enhances accountability in decision-making related to the issues in stake  Creates a greater sense of empowerment and social responsibility ©AKnipe 201611
  12. 12. The key principles of stakeholder engagement  Information disclosure  Communication  Consultation and participation  Involvement  Cooperation and partnerships ©AKnipe 201612
  13. 13. Why is stakeholder engagement important?  Helps to determine and prioritise the policy/strategic issues at stake  Assists in the framing of strategy/plan  Facilitates the identification of which stakeholders should participate  Avoid conflicts between those making and those being affected by decisions ©AKnipe 201613
  14. 14. Why is stakeholder engagement important?  Makes use of local/specific knowledge  Promotes and encourages effective implementation  Ensures for continual engagement throughout the whole process  Cultivates good governance ethics from the outset  Encourages fairness and equity when making decisions ©AKnipe 201614
  15. 15. 3. Stakeholder Identification  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©AKnipe 201615
  16. 16. Evolution and development of the stakeholder concept  Views of the organization Production Managerial Stakeholder ©AKnipe 201616
  17. 17. Production view Suppliers Organisation Customers Environment ©AKnipe 201617
  18. 18. Managerial view Organisation & it’s Management Owners Customers Employees Suppliers ©AKnipe 201618
  19. 19. Stakeholder view of the organization Business Owners Consumers Community Government National Provincial Local General Public Environmental Groups Civic Groups Average Consumers Product Liabilities Social Activists Environment: Political Economic Social Technological Employees Minorities Women Older Employees Unions Private Citizens Institutional Groups Board Members Organization Owners Consumers Community Government National Provincial Local General Public Environmental Groups Civic Groups Average Consumers Product Liabilities Social Activists Environment: Political Economic Social Technological ©AKnipe 201619
  20. 20. Stakeholder identification in 5 simple steps 5. Analyse influence and interest 4. Associate stakeholders with roles 3. Select stakeholders 2. Specify stakeholders roles 1. Specify stakeholder types ©AKnipe 201620
  21. 21. Step 1. Specify stakeholder types  Primary stakeholders are those stakeholders that have a direct stake in the organization and its success  Secondary stakeholders are those that have a public or special interest stake in the organization ©AKnipe 201621
  22. 22. Step 1. Specify stakeholder types  Core stakeholders are essential to the survival of the firm  Strategic stakeholders are vital to the organization and the threats and opportunities the organization faces  Environmental stakeholders are all others in the organization's environment ©AKnipe 201622
  23. 23. Stakeholder Type 4 Mixed Blessing Strategy: Collaborate Stakeholder Type 3 Non-supportive Strategy: Defend Stakeholder Type 1 Supportive Strategy: Involve Stakeholder Type 2 Marginal Strategy: Monitor High Low Stakeholder’s Potential for Cooperation With Organization High Low Stakeholder’s Potential for Threat to Organization Types of stakeholders ©AKnipe 201623
  24. 24. Step 2. Specify stakeholder roles  Would depend on the nature of the business  Could include:  Influencer  Contributor  Reviewer  Approver …or ©AKnipe 201624
  25. 25. Step 3. Select stakeholders ©AKnipe 201625
  26. 26. Step 4. Associate stakeholders with roles Stakeholder A Stakeholder C Stakeholder D Stakeholder G Stakeholder B Stakeholder E Stakeholder F Stakeholder X Stakeholder Z Stakeholder J Stakeholder K Stakeholder P Stakeholder H Stakeholder M Stakeholder N Stakeholder S ©AKnipe 201626
  27. 27. Step 5. Analyse influence and interest  A typology of stakeholder attributes  Legitimacy refers to the perceived validity of the stakeholder’s claim to a stake  Power refers to the ability or capacity of a stakeholder to produce an effect  Urgency refers to the degree to which the stakeholder’s claim demands immediate attention ©AKnipe 201627
  28. 28. A typology of stakeholder attributes 1. Dormant Stakeholder 2. Discretionary Stakeholder 3. Demanding Stakeholder Power Legitimacy Urgency 5. Dangerous Stakeholder 7. Definitive Stakeholder 4. Dominant Stakeholder 6. Dependant Stakeholder ©AKnipe 201628
  29. 29. Analyse influence & interest ©AKnipe 201629
  30. 30. How do you justify this kind of work?  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 ©AKnipe 201630
  31. 31. 4. The link between stakeholder engagement & operational integration  Materiality  is judged in terms of its inherent nature, impact (influence) value, use value, and the circumstances (context) in which it occurs  Completeness  the organization should identify its stakeholders, and explain how it has responded to their reasonable expectations and interests  Responsiveness  characterise the set of values and beliefs that perceive certain stakeholders as more representative than others ©AKnipe 201631
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  33. 33. 5. Stakeholder management – integrating expectations & priorities  Key questions:  Who are our stakeholders?  What are our stakeholders’ expectations?  What opportunities and challenges do the stakes and stakeholders present?  What economic, legal, ethical, and philanthropic responsibilities does our organization have?  What strategies or actions should our organization take to best manage stakeholder challenges and opportunities? ©AKnipe 201633
  34. 34. Who are our stakeholders?  Management must identify generic stakeholder groups and specific subgroups ©AKnipe 201634
  35. 35. What are our stakeholders’ expectations?  Determine the nature/legitimacy of a group’s expectations  Determine the power of a group’s interests  Determine specific groups within generic groups ©AKnipe 201635
  36. 36. What opportunities & challenges do stakeholders present?  Opportunities are to build good productive working relationships with the stakeholders  Challenges are representative of how the business handles the stakeholders ©AKnipe 201636
  37. 37. What economic, legal, ethical, and philanthropic responsibilities does our organization have to its stakeholders? ©AKnipe 201637
  38. 38. What strategies or actions should our organization take to best manage stakeholder challenges & opportunities?  Should we deal directly or indirectly with stakeholders?  Should we take the offense or the defense in dealing with stakeholders?  Should we accommodate, negotiate, manipulate or resist stakeholder overtures (presentations/proposals)?  Should we employ a combination of the above strategies or pursue a singular course of action? ©AKnipe 201638
  39. 39. 6. Principles of stakeholder management  Key words:  Acknowledge  Monitor  Listen  Communicate  Adopt  Recognize  Work  Avoid  Acknowledge conflict ©AKnipe 201639
  40. 40. Principles of stakeholder management 1. Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders 2. Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about risks that they assume 3. Managers should adopt processes and models of behaviour that are sensitive to the concerns and capabilities of each stakeholder 4. Managers should recognise the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities ©AKnipe 201640
  41. 41. Principles of stakeholder management 5. Managers should work cooperatively with other entities to ensure that risks from corporate activities are minimized, and where they cannot be avoided, appropriately compensated 6. Managers should avoid altogether activities that might jeopardise inalienable human rights or give rise to risks which, if clearly understood, would be unacceptable to relevant stakeholders 7. Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such conflicts through open communication, appropriate reporting, incentive systems, and, where necessary, third-party review ©AKnipe 201641
  42. 42. 10 Fundamental things to remember in stakeholder engagement ©AKnipe 201642
  43. 43. 1. 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 remember everything can and often will, end up on the record. ©AKnipe 201643
  44. 44. 2. 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. ©AKnipe 201644
  45. 45. 3. Realistic timeframes and budgets are vital Make sure your CFO understands and approves a realistic budget. Help them to understand the cost of your failure. ©AKnipe 201645
  46. 46. 4. 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. ©AKnipe 201646
  47. 47. 5. Smile Let your humility and humanity show. ©AKnipe 201647
  48. 48. 6. 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. ©AKnipe 201648
  49. 49. 7. Everyone is the face of the business 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. ©AKnipe 201649
  50. 50. 8. 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. ©AKnipe 201650
  51. 51. 9. 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. ©AKnipe 201651
  52. 52. 10. 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. ©AKnipe 201652
  53. 53. Thank you! André Knipe 072 417 4084 ©AKnipe 201653