eNewsletter > Good Growth Issue 1.2: Engaging Stakeholders for Good Growth (Spring 2008)
Greetings!
Our first issue of
Good Growth introduced you to the world of reporting, highlighting best practices and trends that are shaping the way organizations are communicating with their stakeholders. In this issue we discuss stakeholder engagement, what it means for your company and how you can effectively engage key audiences. Stakeholder engagement is a critical prerequisite for beginning any corporate responsibility and sustainability endeavor, including the reporting process.
We also congratulate the past two winners of the
Do Good. Do Well. Win™ with BrownFlynn campaign, our monthly give-away contest for
Good Growth subscribers. As you find value in the content below, please forward this email to clients, colleagues and friends – and urge them to sign-up for the monthly drawing by subscribing to
Good Growth! We are always open to your feedback, suggestions and questions, so feel free to contact us at
barbandmargie@brownflynn.com.
Do Good. Do Well. Win. ™
Barb Brown & Margie Flynn
Principals and Co-Owners
BrownFlynn
GOOD NEWS!
BrownFlynn is pleased to welcome
Khaled Salehi to our team as our newest Senior Consultant and
Emily Baunach as an Associate Consultant. Khaled’s extensive stakeholder engagement, public-private partnership and strategic consultation experience enables clients to forge solid relationships while establishing support for long-range objectives that lead to growth, stability and success. Emily, a LEED-accredited member of our team, has a passion for environmental sustainability and knowledge that allows her to synthesize global impacts across a variety of sectors. To find out more about Khaled or Emily,
click here.
Stakeholder engagement is the sustainability issue most integrated into the “boards, brands and business models” of 50 top corporate responsibility reporting companies. A 2006 study gave over a third of the companies (including BAA, Enel, Ford, Kesko, Natura and Vodafone) a perfect score for integrating stakeholder engagement into their management practices.
ISSUES IN DEPTH: Who Are Stakeholders and Why Should We Engage Them?
Identifying and engaging key stakeholders around corporate initiatives, communications and planning is becoming increasingly important to your company’s long-term success. Growing mainstream awareness of social and environmental issues has elevated stakeholder expectations. They want greater transparency, more responsible business practices, and the inclusion of stakeholder groups in shaping corporate agendas. The definition of “stakeholder” also has broadened, with dramatic consequences for how your company both functions and remains competitive.
Figure 1: How Stakeholder Engagement Has Evolved in Recent Decades
Source: Future 500 (2004)
So, what is “stakeholder engagement”? At its most basic level, the term “stakeholder” refers to any individual with an interest in or stake in the goals, operations, outcomes and impacts of an organization. Engaging these audiences can take a number of forms, including focus groups, satisfaction surveys, open dialogues and volunteer or philanthropic activities.
Twenty years ago, the word “stakeholder” within the corporate boardroom translated almost exclusively to “shareholder.” Over time, the definition of “stakeholder” expanded as companies adopted a broader perspective of “corporate citizenship” (also known as “corporate responsibility” or “sustainability”).
[i] Many companies now use this wider lens to explore the impacts of their operations and facilities on a variety of stakeholders, including employees, customers, vendors, interest groups, political landscapes and communities (Figure 1). In doing so, these companies see more clearly how they are affected or influenced by various stakeholder groups.
A focus on corporate citizenship inspires some businesses to prioritize stakeholder feedback in corporate planning, business operations, government affairs, marketing and community investment. Integrating stakeholder engagement into your business processes and planning offers several benefits, including accelerated market entry, mitigation of legal risks and enhanced customer and employee loyalty.
[ii]
Engagement activities will significantly expand as industries and communities focus more on environmental and social stresses in coming years. Stakeholder engagement can help companies anticipate and lessen the impact of the risks associated with these shifts. There are also key opportunities for corporate responsibility in markets related to climate change, gender issues, human rights and anti-corruption, according to a report on stakeholder engagement by AccountAbility. Taken together, the report estimates these markets will be worth at least US $5 trillion by 2050.
[iii]
Successful corporate stakeholder engagement requires recognizing pressing global issues all industries will face and listening to a broader set of voices. (Figure 2). By engaging stakeholders who were traditionally ignored (e.g., suppliers, advocacy groups, NGOs, financial institutions, and government entities), you can build greater trust, buy-in and credibility among these key constituents. Most importantly, effective stakeholder engagement can result in unveiling solutions that lead to greater profitability and longevity.
Figure 2
Adapted from: Brown, B. and M. Flynn. (2008). ‘The Metatrend Stakeholder Profile: The Changing Profile of Stakeholders in a Climate and Water Stressed World.’ Greener Management International, 54. (Greenleaf Publishing Ltd.)
QUICK QUOTE
“Many corporations have come to regard engagement with a variety of individuals and entities on social, environmental and economic issues as an important aspect of how they manage their activities….Today, leading companies have started to develop an appreciation that stakeholder engagement can contribute to learning and innovation in products and processes, and enhance the sustainability of strategic decisions within and outside of the company” [iv].
(The Practitioner’s Handbook on Stakeholder Engagement [v])
BEST PRACTICES: How to Identify Your Stakeholder Groups
For any company enlisting feedback through stakeholder engagement, the first step is determining who to engage by asking some simple questions, such as:
Who supplies our company with the resources we need to deliver product(s) to our clients? How do we transport materials to clients? What individuals, communities or other businesses are affected by our operations? Who controls internal operations, communications and strategic planning? Who advocates for policy at the local and national level? Who accounts for our social, environmental and financial impacts? To what trade organizations do we belong? What other non-profit, civic or advocacy organizations either support or resist our efforts?
The answers to these questions will reveal a list of your company’s stakeholders–some of whom you may never have engaged in prior dialogue. Engaging these new groups can unveil a variety of opportunities for improving your company’s performance socially, financially and environmentally. Addressing adversity and drawing on stakeholders’ unique perspectives can strengthen your operations and provide greater awareness and understanding of your footprint. Surveying your suppliers, for example, to see what issues are most relevant to them may point to ways to enhance operations, curb environmental waste and increase efficiency and productivity. A critical outcome of stakeholder engagement is aligning the expectations of key groups of influencers.
So, who do I engage first? How do I know a primary stakeholder versus a secondary stakeholder? A primary group of stakeholders are those who you directly engage on a daily or weekly basis--employees, board members, trusted advisors, etc.—those who help ensure your operations remain on track. Garnering buy-in from this group of stakeholders is necessary to move forward with any initiative. As for the secondary stakeholders—this group typically includes those mainly affected by operations or those influencing or suggesting change; in some cases, secondary stakeholders might represent the “naysayers” to an organization’s strategic direction or processes and remain one of the most important groups to engage.
For one client, identifying and engaging key stakeholders had significant, positive impact.
In 2006, one of BrownFlynn’s valued clients received a request from a prospective customer about building a new facility close to its Wisconsin operation. In response, our client traveled to the region to meet with a diverse set of stakeholders. As the company evaluated entering the new geographic market, they invited neighbors, local organizations, elected officials and businesses to join in the planning. They incorporated community feedback into the conceptual plans and invited a cross-section of the community to visit one of their Michigan locations to provide a realistic example of how their commitment to and impact on the community shaped operations.
As the process of building a new facility moved forward, our client received unanimous approval when applying for all of the necessary permits, saving the company significant time and financial resources. A community advisory council, including land owners, local conservation groups and academics, invited the company to participate in regular meetings around sustainable development, issues affecting their community and ways to collaborate. With the support of the local community, the company plans to open this new facility in the next quarter, and it will serve as a model for operating and social standards at existing and future sites.
BROWNFLYNN HAPPENINGS:
And the winner is…
“One for me, one for you…make every day Earth Day!”
JONI MARRA, DIRECTOR OF CORPORATION AND FOUNDATION RELATIONS, of UNIVERSITY HOSPITALS HEALTH SYSTEM is the winner of our April monthly drawing and will receive two Water EcoKits™, two Gas EcoKits™ and two Electric EcoKits™ from our sustainable product partner Niagara Conservation!
Each EcoKit includes several easy-to-install and effective Niagara efficiency products, as well as energy saving tips for everyday use that will help to save money on utility bills as well as valuable resources. We ask that you share one of each kit with a friend, family member, colleague or client to spread the word about the importance of conservation!
To get your own EcoKitTM and find out more about Niagara’s conservation solutions, visit www.niagaraconservation.com
JONI, enjoy your prize!
Also, Congratulations to…
Jeanne Hammerstrom, Chief Marketing Officer, of Benesch, Friedlander, Coplan & Aronoff LLP, our February winner of handmade truffles and caramels from Katherine Anne Confections!
Veronica Croucher, Sustainable Development Project Director, of sanofi-aventis Inc. our winner of a recycled wall clock from Pivot Boutique!
SNEAK PEEK:
A Look at One of Our Upcoming Prizes
Fun in the Sun! Summer is almost here, and BrownFlynn wants you to have fun in the sun in a safe and sustainable way. This selection of BefoRE Sun skincare products comes to us from Natalie Myre, Regional Vice President with Arbonne International. These products are botanically based, formulated without any animal products or by-products, and free of synthetic dyes or fragrances. Plus, they help you cope with increasing UV penetrations associated with damage to the ozone layer. The set includes Damage Control (Water Resistant SPF 30 Sunscreen), To the Rescue Hair Protectant, Self-Tanner and Baby Sunscreen. For more information about Arbonne, contact Natalie Myre at
nmyre@hotmail.com or visit
www.defygravity.myarbonne.com.