The traditional approach to employee and other stakeholder engagement
activities has been addressed predominantly on an operational level with a focus on what the corporation is doing.
By changing practices it is indeed possible to impact engagement but only if
your stakeholders believe that you are doing it for the right reasons and in the
right way.
Stakeholder engagement
strategies should follow Simon Sinek's golden circle model – always start
with the why, followed by the how before you even start thinking about the
what.
The Why
Stakeholders will forgive you for mistakes done for the right
reasons – not for perfect products created by the exploitation of others.
Although most companies have been started to serve a specific purpose or create
value for stakeholders, the same companies often over time transform their
value focus to a cost focus. A transformation that narrows the value creation
to one single stakeholder – the shareholder itself. Many senior managers proudly
declare their purpose as serving the shareholder – even when the other
stakeholders are listening.
“Problems are just businesses waiting for the right entrepreneur to unlock the value.” Jay Samit
Assuming that taking from the environment, society, the
customers and the employees to give to shareholders is in the best long term
interest of the shareholder is not logical. The shareholder will benefit when
all other stakeholders benefit in a way that creates long term sustainable
competitive advantage.
Most companies start like disruptive wolfs hunting apathetic market
sheep busy competing for grass. Over time they themselves become sheep
anxiously scanning for disruptive predators while protecting their patch of
grass. Not a purpose that is likely to engage stakeholders.
Preserving or recreation of the purpose of the corporation
will be increasingly important with the wave of millenials taking over as the
prime stakeholders. It will be important to have a ”why” that serves many
stakeholders simultaneously in what is know as super alignment.
"Make yourself sheep
and the wolves will eat you"
Benjamin Franklin
The How
The rise of the millenials also makes it important how
corporations operate not only as a corporate citizen with respect for society,
the environment, customers, employees and other stakeholders but also with transparency.
The concept of corporate transparency is developing rapidly
and can be a major source of stakeholder engagement. From being a spotlight you
only pointed at the cleaner areas of the corporate exhibition halls the social
media revolution is illuminating everything, including dirty laundry. Transparency is not a strategy anymore – organisations will have to work on
creating sustainable business models that can withstand light rather than try
and sugarcoat the existing business model.
”Transparency may be
the most disruptive and far reaching
innovation to come out of social media” Paul Gillin
Transparency normally stops when getting close to the
business model and the supply chain. Traditional companies are not comfortable
disclosing their internal costs of manufacturing and similar. The official
reason is that it is proprietary information that needs to be held from competitors but it could also bet that customers would be furious knowing how they
get robbed. And the other sheep are probably experts in grass anyway.
A few brave companies are taking this next step and
disclosing internal costs to their customers. The company Everlane in the
fashion industry have given full disclosure in a market where 8x markup is
common. No doubt they will attract unwanted attention to the other sheep in
that marketplace and has the potential of becoming a wolf.
It is uncomfortable for most leaders to address the why and
the how of their strategy. ”Why cant we just focus on the shareholder like
everybody else”? ”Why can’t we hide the true nature of our operation so we do
not attract uncomfortable questions”?
Unfortunately addressing the why and the how of the strategy
is seen as a negative that adds costs and not as having the potential to create
significant engagement with the company's stakeholders.
“The best way to predict the future is to invent it.”
Alan Kay
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