The definition of ‘stakeholder’ is broadening.
Companies have traditionally focused on a narrow group of stakeholders: shareholders, employees, customers, and regulators. Today, companies are interacting with many other people who affect (and are affected by) their business activities, including local residents, community development groups, environmental and development organizations, citizen associations, and non-governmental organizations (NGOs).
Engaging with community stakeholders can benefit the business.
Engagement not only benefits communities; it can also improve a company’s decision-making, legitimacy and competitiveness – by tapping into local knowledge, reducing conflict, boosting recruitment and preventing costly delays.
The Manila Water Company in the Philippines used to supply only 60 per cent of the city’s households. Two-thirds of the water in its system was lost to leaks and unauthorized connections. Based on collaboration with customers and local organisations, a new metering system was introduced – focusing on communities rather than individuals. The company tripled its customer base, dramatically reduced unauthorized connections, and increased customer satisfaction from three to 96 per cent in just five years.
Different businesses and communities require different engagement strategies.
Research identifies three broad strategies for companies to match to their own business objectives and context – and combine as required:
- Community investment: a one-way process of providing information or resources through information sessions, charitable donations or employee volunteering
- Community involvement: two-way communication with the community similar to the consultation processes used before major construction projects
- Community integration: a few, carefully chosen joint projects, jointly controlled with – and maybe even led by – the community.
Four steps to engagement – and tools to help
Step 1: Identify your community stakeholders and get to know their concerns.
Start by considering groups that have already expressed concerns, such as neighbours who have complained about noise. But don’t forget less visible stakeholders, such as those with low incomes or little education. Communities are groups of individuals, linked by:
- Issues that concern them
- Identity defined by sets of beliefs, values or experiences
- Interaction through social relationships or shared geography.
The table provides space for you to enter the information you have collected. Gather basic information about stakeholders and their connections to your company.
Download the guide for the complete toolset. As you work through the guide, you will gather more information about stakeholders and your interactions with them. A chart at the end of the guide (page 13) has space for all the information you will collect.
Step 2: Choose your engagement strategy.
Having identified your community stakeholders, prioritize the most important and, for those selected, choose whether to focus on investment, involvement or integration. Before launching into any project or initiative, clarify what the stakeholders really want, as well as your business goals.
Step 3: Plan your engagement process, selecting suitable practices and techniques.
If, for example, stakeholders just need more information to dispel confusion, plan “investment” techniques like flyers or ads. If, perhaps, they feel the company isn’t listening to their concerns, launch “involvement” activities like surveys or public meetings. If the community wants to get more closely involved, embark on “integration” projects like joint working groups or brainstorming sessions.
Use the table on page 13 to help identify practices and techniques to improve your stakeholder improvement processes. Make sure you have the resources (time, staff, skills, budget) to deliver.
Step 4: Make community engagement permanent.
Remember that a one-off initiative is not engagement unless you learn from, build on and share the experience. Replicate successes, learn from failures, and continuously improve.
A systematic approach to stakeholder engagement will reap business benefits.
The growing expectation that companies should engage with their communities needn’t be a burden. There are some simple, step-by-step guidelines that all businesses – regardless of size or sector – can follow, as well as practical tools to help at each stage. A systematic approach like the one outlined in this guide can bring genuine business benefits.