Stakeholders: tips for engagement in a ‘green’ organization
If your organization is mission-driven, and I am almost sure it is: if you are reading these lines, you have albeit once asked yourself the question — for what? or rather — for whom?
Why do I do what I choose to do? Which problem am I solving? What drives me to apply my efforts into a certain cause?
Although the answers vary greatly, there is almost certainly one common component among them.
PEOPLE.
Those organizations that succeed in satisfying their customers and other interested parties bet their success on people:
- they value and cherish their employees (read ‘Delivering Happiness’ by Tony Hsieh & see this),
- they take care of their customers by anticipating or meeting their needs, wishes and concerns (for example, about environmental & social injustice, or sustainability advancements, as described here,
- they provide younger and less experienced talents with a base for hands-on internships and make efforts to retain their brightest minds,
- they meet (or try to meet) financial expectations of the investors or financial donors with no surprise.
See, it’s all about people. And I didn’t even include ‘making a positive impact on humanity’ in the equation.
The topic of this issue is the nucleus, the core of any business — stakeholders engagement.
Companies that have grasped the importance of actively developing and sustaining relationships with people on every stage of their progress, are reaping the benefits of improved risk management & better outcomes on the ground.
Approaches to doing business have changed, the society became more sophisticated and demands a broader level of transparency and disclosure, all the way from short-term means of meeting regulatory requirements, to a longer-term, more strategic channel for relationship-building, risk mitigation, a new business identification, new approaches & forms of engagement are evolving.
Stakeholders play a vitally important role when companies develop their approach to corporate sustainability. By listening to their stakeholders, companies can better understand emerging trends and material issues, as well as prioritize among them.
Just as no one could ever fully develop while skipping evolution steps, your company will evolve its relations with stakeholders following a simple process.
4 STEPS OF DEVELOPMENT OF RELATIONS WITH STAKEHOLDERS (YOUR COMPANY WILL EVENTUALLY UNDERGO)
1.Awareness. At this stage, the stakeholders know that the company exists. The company wants to communicate with its stakeholders by providing them with more information about the company so that they can begin to evaluate the company’s mission and values.
2. Knowledge. Stakeholders begin to understand what the company is doing, its values, strategy, and mission. At this stage, companies want to provide stakeholders with information for decision making. Customers want to know how the products of the company meet their needs, employees need to understand the organizational structure and systems, and suppliers want to understand what the company needs from them.
3. Admiration. As soon as stakeholders have gained knowledge about the company, trust needs to be developed. This is the stage at which stakeholders will develop a sense of commitment to the company.
4. Action. Company is taking steps to further engage its stakeholders. Customers recommend this company and its business, investors recommend its shares, and employees are ready to take more responsibility.
So how to travel from step 1 to step 4 in the shortest possible time?
First and foremost, decide upon your values and mission.
This, as you may remember from the previous article, should be outlined and made available for your stakeholders in the Policy of your organization. This will let everyone know, who you are and what you stand for. Also, it will keep you accountable for all your actions.
Then, fast forward from, essentially, understanding what kind of problem you solve with your existence on the market (this is the phase of brand recognition establishment), to building commitment — a reason for people (or let’s get used to calling them stakeholders, as fancy) to come back to you, to work with you, to invest in you, to be interested in you.
Before expanding on the highest level of stakeholder engagement — action — it is of great importance to emphasize the value of asking the right question.
Start with WHY. Yes, it’s a referral to the famous Simon Sinek’s book, but also, seriously, first understand what you want to achieve via engaging the stakeholders, then map them carefully and thoughtfully.
So, why engaging?
In brief,
- for sustainability advantage,
- for better services to clients and customers,
- for innovation and market development,
- for easier access to financial support,
- for enhanced image and reputation.
Now, off to step 4, which tells us — Action! Take steps.
What to do exactly to make customers recommend your company and its business, investors recommend its shares, and employees take more responsibility, leadership and serve as true ambassadors of your company?
EXAMPLE FROM THE IDEAL WORLD
To better understand the stakeholder engagement at this, most prominent stage, let’s take some example, that would serve as a good model.
I’ll take the green bank, since the concept of it has already been explored previously on this blog, also because such institution would allow us to look at the things in the organization through a prism of environmental and social sustainability.
What is the possible mission of the green bank?
I’d say — to promote sustainable development, to foster alternative energy and energy efficiency development, to help shift to green economy, to make a positive impact by reducing climate change rate.
What are the values of such an organization?
- Transparency (we, the stakeholders, want you to openly report upon actions you take towards your mission)
- Environmental approach (if you call your organization ‘green’, practice what you preach; the stakeholders will surely want some proofs: maybe you implement the concept of ‘green office’, or fully digitalized your internal processes so that to reduce paper usage where possible, or perhaps your top-management comes to the office by public transport, on bicycles, or at last — in the electric cars, and encourages the employees to do the same)
- Diversity (is organization inclusive of various groups of society? gender-balanced not only in terms of quantities but also of fair payment? does it welcome students/ interns/ seniors/ disabled/ veterans?)
- Social responsibility (is organization proactively thinking and working towards providing your internal and external stakeholders with cultural, social, and educational opportunities? does it develop initiatives aimed at social prosperity and positive impact?)
The list can go on and on, with core values like Respect, Work-Life Balance, Openness & Trust, Innovation, whatever else is deemed of great importance at the organization in question.
But honestly, I don’t think it’s worth any good having more than 4 values.
Less is more.
Quality should prevail over quantity.
Ideally, the goal is to define the values that would be sharp, easy to remember, and most importantly — resonate with the internal culture of the organization.
I like to joke that ‘an employee of the organization, awaken at 3 a.m. should be able to name the values of the company he/she works for’.
Values should be YOURS.
Now, with values and sustainability prism in mind, we’re off to map our stakeholders.
As I was exercising with mapping the stakeholders, I recalled the words of Peter Blom, the CEO of Triodos Bank:
“ The financial sector is in a very good position to contribute to a sustainable world. Every financial decision makes impact after all.”
I think, only now I started to really understand them.
To implement the ideas outlined in the table successfully, grab these 4 tips for successful engagement.
TIPS FOR SUCCESSFUL ENGAGEMENT (source)
- Get in early
Relationship-building takes time. Many of the hallmarks of good relationships — trust, mutual respect, understanding — are intangibles that develop and evolve over time, based on individual and collective experiences & interactions.
2. Don’t wait until there is a problem to engage
In the Eisenhower matrix what seems less important and less urgent, never gets done. Anticipate, even if there’s no urgent need today, tomorrow can be a bit too late.
3. Take a long-term view
Establishing and maintaining good relationships requires a long-time horizon. Companies who take this view tend to make different types of decisions. They invest in hiring and training staff and see the value of consistently following through to their communities to stakeholders. They make an effort to personalize relationships through informal and social interactions to build links to local communities. They take grievances seriously and deal with them in a reliable and timely manner. They listen and learn. Importantly, companies that focus on lasting relationships think in terms of the bigger picture and do not allow short-term interests (such as negotiating the lowest possible compensation rates) to jeopardize their broader social license to operate in the area.
4. Manage it as a business function
Like any other business function, stakeholder engagement needs to be managed. It should be driven by a well-defined strategy and have a clear set of objectives, timetable, budget, and allocation of responsibilities. Companies that take a systematic (rather than ad-hoc) approach that is grounded in business operations, are likely to get better results in terms of the time and resources they invest, and are able to track and manage stakeholder issues and risks more effectively.
As with other key business functions, direct reporting lines and the engagement of senior management is critical.
As you can see, Stakeholder Engagement is a broad topic yet to be explored, today we’ve only touched base. In the next chapters of this journey, I’d like to look into prominent examples of stakeholder engagement and share the tools companies use to engage with various stakeholders effectively, such as, for example, sustainability and climate reporting, grievance mechanism, and other.
Stay tuned & engaged with Ecognize!
Writer Anna Chashchyna
Editor Maria Isabel Acosta Lopez
