DIFFERENT LEVELS OF ENGAGEMENT

DIFFERENT MAGNITUDES OF CHANGE
In general, low level engagements such as monitoring or informing may
be considered as adequate for solving or addressing minor challenges to
stakeholder and corporate behaviour and strategy, while engaging at a higher
level has the potential to enable bigger changes and transformation, and the
solving of more systematic and deep-rooted challenges in managing corporate
impacts or sustainability issues.
However, this does not mean that, for example, providing information to your
stakeholders can not lead to signifi cant changes in your relationship with them
and in their behaviour. In fact, eff ective engagements are usually a combination
of approaches from diff erent levels, and informing is an essential part of most
higher-level engagements like consultation or collaboration.
Important Note: Th e ‘fi rst’ three modes (passive, monitor, inform) are not
really engagements as such, as real engagement is interactive. However, they are
often the fi rst steps in a relationship with stakeholders and can lead on to more
involved engagement.
A key diff erence between the low levels and the high levels of engagement is the
degree to which you pool resources (knowledge, human resources, operation
capacities, fi nances or infl uence on others) in order to achieve a shared
objective. In general, the more fundamental the transformation is that you
and your stakeholders want to make happen, the more important it is that
you work together closely and make the best use of each others resources.
For example, if you simply want to address your stakeholders’ concerns
resulting from their lack of knowledge about the health implications of one
of your products, informing them may be suffi cient. However, if you want to
develop a company policy that successfully serves as a guideline to developing
all products in a way that addresses stakeholders health concerns, then you may
have to consult more thoroughly with a number of stakeholders (e.g. internal
research and development vs. customers) in order to make sure that the policy
meets the diff erent expectations. Finally, if you want to encourage your whole
industry to address consumer health issues in its products and marketing then
you will have to collaborate with an even broader number of stakeholders (e.g.
industry and consumer associations, governments, industry peers) – and often
on a higher level – in order to make this happen. Th e level of and approaches
to engagement that you and your stakeholders choose therefore depend
on your strategic engagement objectives, i.e. on whether these imply only
incremental or systemic changes, and also on the social maturity of the
issue. If an issue is still ‘latent’, monitoring stakeholders may be a suffi cient
reaction, but if an issue is consolidated and likely to become institutionalised, it
is important to collaborate with a broad range of stakeholders to make sure that
the issue is addressed thoroughly.
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Philips’ Stakeholders and Main Engagement Approaches
The table below illustrates some of the ways in which the Dutch electronics company Philips engages different stakeholders.
Stakeholder
Economic Stakeholders
Customers
Employees
Suppliers/business partners
Mainstream investors
Financial service providers
Social investors
Social Stakeholders
Communities
Local/national/international
Non-governmental organisations
Academia
Media
• (B2C) Surveys (trend related, customer satisfaction related, application research),
complaint resolution. Focus groups,
• (B2B) Advisory boards, co-R&D, co-strategy development
• Employee Engagement surveys, town hall meetings, People Performance system,
compliance system, (local) ombudsman
• Supplier days (local, global), co-R&D, industry membership (e.g. WBCSD)
• Road shows, analyst (face to face) meetings, ratings
• Surveys
• Ongoing ad hoc involvement, fi nancial ratings
• Social investment activities focused on education and health, local networking
• Local networking (business/community driven). Participation regulatory bodies
in advisory bodies, cooperation in community projects
• Surveys, project development, ad hoc involvement
• Co-R&D, exchange programs, local networking
• Local networking, surveys
Main Means of Interaction
P7: ASSESSING YOUR CURRENT ENGAGEMENTS AND DRAFTING STAKEHOLDER SPECIFIC OBJECTIVES
STAGE 2
SUGGESTED METHODOLOGY M7:
ASSESSING YOUR CURRENT ENGAGEMENTS AND DRAFTING
STAKEHOLDER SPECIFIC OBJECTIVES
Th e purpose of this activity is to identify the ways in which you are currently engaging
with the relevant stakeholders on the material issues that you have prioritised, and
at the same time to start thinking if and how you want to develop these relationships
further. Th e outcomes help to fi ll in the stakeholder assessment Template (Template 6),
and feed into further decisions.
Conduct a workshop or have a series of internal discussions with those
involved in managing stakeholder relationships. Get together with the people
(e.g. procurement-manager, customer relations, external aff airs, etc.) within your
company who are currently dealing with internal and external stakeholders on the
issues prioritised. Explore the current relationship with them, and how
these relate to the issues that you have identifi ed regarding the specifi c
stakeholder group.
Discuss the possibilities for engagement with these stakeholders.
Is the current combination of approaches to engaging with them suffi cient
to address the issues in a satisfactory way? Does it require other engagement
approaches, maybe on a diff erent level? Would the stakeholders actually have
the capacity (e.g. human and other resources, global presence) to take part in a
diff erent approach to engagement?
Formulate simple Stakeholder Specifi c Objectives that relate to the issues and
stakeholders – considering the possible levels of engagement – using sentences like:
• “To make sure they are well informed of our approach to XXX”
• “To ensure that they do not become hostile to us.”
• “To be aware of their actions regarding…”
• “To convince them to…”
• “To make sure our policy on XXX meets their expectations.”
• “To share responsibility with them for…”
For some stakeholders, you may wish to formulate several objectives. Be sure that
these are aligned with your overall strategic engagement objectives for the issues
that you are engaging on.
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Document outcomes of the conversation in Template 8.
Note the issue that you are engaging on, the current ‘owner’ of the relationship,
the history of the engagement, the current level and approaches in the Template,
as well as potential future levels and approaches. You can either do this for whole
stakeholder groups, or ideally already for specifi c representatives – whatever seems
most appropriate to your situation.
Use your conversations to consider ‘specifi cations’ of further stakeholder
representatives that you feel you need to identify in order to address your
priority issues. Again, Template 8 – as well as the next step – provides you with
an overview of a range of further factors you may wish to consider.
THINGS TO CONSIDER
It is important to be aware that you are not yet taking any fi nal decisions
on how you will be proceeding with these stakeholders, this will happen in
Stage 4. Th is is still an initial assessment, and helps you to gain a deeper
understanding of the adequacy of current engagements, as well as of the potential
for ‘more’. Th is also means that the fi lling in of Template 8 is only preliminary,
you must reconsider your entries as you learn more about your stakeholders
throughout the engagement process. The Template should be used as a
constantly evolving documentation of your stakeholder relationships.
If for any reason you feel you do not have enough information to fi ll in parts of
the Template, just leave them blank. You may return to them later. Th e next step
will also guide you in learning more about your stakeholders.
The activities described above partly overlap with the next step of assessing
stakeholder representatives. Where possible, you may wish to combine the two and
address them in the same conversations and/or workshops.
P7: ASSESSING YOUR CURRENT ENGAGEMENTS AND DRAFTING STAKEHOLDER SPECIFIC OBJECTIVES
P8: UNDERSTANDING AND LEARNING ABOUT STAKEHOLDERS AND THEIR REPRESENTATIVES
8 See box 4.2, p.53 in Volume 1: “The Guide to Practitioners’ Perspectives on Stakeholder Engagement” for further clarifying examples.
BACKGROUND
In order to design stakeholder engagement processes that work, you need
a clear understanding of who your stakeholders are and how and why they
may want to engage with you.
In some cases you will need to engage directly with stakeholders themselves either
as a self-selected or statistically representative sample. In other cases you will
want to engage with stakeholders’ formal or informal representatives in the form
of opinion leaders, elected representatives, community leaders or advocacy or
membership organisations.
Th is section will introduce a more detailed assessment of stakeholders. It will also
include guidance on the selection of appropriate stakeholder representatives to
engage with.
Specifi cally important points to consider are the geographical scales at which
the stakeholder representatives operate and their relationship to the level at
which any outcomes may have to be implemented. For example, in engagements
regarding the global issue of climate change, many of the organisations
representing stakeholders’ viewpoints are themselves large global organisations,
who may not always have the necessary insights into the expectations of local
level stakeholders. In such cases, it is important to ensure that dialogues on
a more local level with local stakeholders are also undertaken which then
complement, feed into and verify the outputs of the global dialogue. 8
When learning more about stakeholder representatives, the following factors
should be considered:
STAGE 2
THE PRACTITIONER’S HANDBOOK ON STAKEHOLDER ENGAGEMENT | 65
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Stakeholders will have their own specifi c view regarding an issue, about potential
problems, their causes and solutions. Furthermore, stakeholders investing time in
engaging with you will expect a ‘return on investment’ in terms of action and response.
Try and be as clear as possible about both, the stakeholders’ general view on the issue,
and their expectations towards you. Some stakeholders only expect you to have an open
and honest conversation with them, others may expect you to make specifi c operational
changes or adhere to a certain set of performance standards.
Compare the expectations to what you think you can and want to actually do about an
issue, given your resources and strategic objectives (these ‘margins of movement’ are
further considered in the next step.)
Be clear about the representative’s knowledge of the issue. Some stakeholders know as
much or even more about an issue than you. In such cases, you may wish to learn from
them. Others know far less, and you may want to inform or educate them. This may be
particularly important if their actions can have a strong direct or indirect impact on you,
for example when they infl uence public policy regarding the issue.
When engaging with an individual or an organisation you are often seeking for them
to stand as representative of a larger group of stakeholders. Be clear about any
assumptions or claims about who a representative speaks for. Are they an elected
or recognised representative? Do they have legitimacy in terms of broad support or
acknowledged expertise? Or are you seeking a representative sample opinion from
individuals who refl ect the broader make-up of the community?
Successful engagement requires willingness on both sides. If there is unwillingness,
it is advisable to investigate the reasons for this. Sometimes, this may be due to
circumstances which you can control and change. In other times, it is important to
acknowledge the stakeholders’ right not to engage.
Be clear about the specifi c possible impacts of the stakeholder on your business.
How can s/he contribute to your objectives? How can s/he stop you from achieving them?
When doing this, you also need to consider her/his indirect impacts on you via other
stakeholders.
Some representatives’ potential impacts on you or on the stakeholder engagement
process may be so signifi cant that there is a defi nite necessity to engage them.
Consider the specifi c cultural circumstances of the engagement, e.g. language, customs
regarding social interaction, gender issues. This may be very relevant to the methods
you choose for engagement, as well as to the resource implications. The consideration
of cultural issues should ideally be undertaken together with someone familiar with that
culture, whether from within or outside the organisation.
The geographical scale at which the representative operates, or is willing to operate,
should match your engagement plans and objectives. Do you need someone who
can engage on a global issue (e.g climate change)? This would require that the
representative organisation possesses a signifi cant degree of credibility, legitimacy
and oversight for this (e.g. WWF). An issue like the environmental considerations in the
building of a new plant, however, is for example more competently addressed with the
local administration and/or community.
Stakeholders must be treated as a scarce resource, which includes the respectful
treatment of their attention and time. Smaller organisations may have very limited
fi nancial means and staffi ng capacity. See Stage 3 for further considerations on
stakeholder capacities.
If you are intending to engage with different stakeholders at the same time, or maybe
even involve them in the same activity or locality, it is important to understand their
views of and relationships with each other. Tension between your stakeholders can,
especially if they are not considered, have very negative infl uences on the outcomes of
your engagements with them.
Stakeholder Profi le – Key Issues
Stakeholders’ expectations
Knowledge of the issue
Legitimacy of stakeholder
representative
Willingness to engage
Possible impacts (negative or positive)
of the representative
Cultural context
Geographical scale at which
they operate
Stakeholders’ engagement capacity
Relationships of stakeholders with
each other
P8: UNDERSTANDING AND LEARNING ABOUT STAKEHOLDERS AND THEIR REPRESENTATIVES
STAGE 2
Novozymes’ Partnerships in China:
Expanding a company’s business activities into China brings unique challenges, especially for companies from the western
hemisphere. The different cultural, economic and regulatory environment in China poses unique challenges. Also, China faces
huge pressure in balancing economic growth with environmental and social development. Danish biotech company Novozymes has
taken cooperative approaches to managing such challenges and to make the most of the Chinese business environment.
For example, Novozymes has teamed up with various Chinese and foreign businesses to set up the China Business Council for
Sustainable Development (CBCSD) in January, and currently holds the vice presidency. This gives Novozymes in the opportunity of
understanding the link between economic growth and sustainable development in China. Novozymes and all of the other involved
companies have undertaken to promote sustainable business practice in China. The CBCSD is affi liated to the World Business
Council on Sustainable Development.
Another example are Novozymes various partnerships with Chinese universities. These help Novozymes to draw on China’s
longstanding tradition in microbiology. In practice, this often involves Chinese students from e.g. Yunnan University in Southern
China working together with researchers in Novozymes’ laboratories. Novozymes also invites customers to work with them to
increase knowledge of different enzymes and allow them to infl uence the development of solutions to meet their needs. In the
longer term, Novozymes expects these engagements with customers and universities to help identify completely new enzyme
applications that are directly suitable for the large Asian market.
SUGGESTED METHODOLOGY M8:
BUILDING STAKEHOLDER PROFILES
Th e purpose of this activity is to build up profi les of stakeholder representatives, their
expectations, preferred levels of engagement, and their potential impacts.
Identify potential representatives for the stakeholder groups that you have
identifi ed.
• Consider the stakeholders you are already engaging with (identifi ed in
previous step), and those that you have come across in your previous research
and analysis.
• You also have the option of ‘spreading the word’ that you are looking for
engagement partners as wide as possible. You may want to launch articles in
industry or issue specifi c magazines – asking stakeholders who are willing to
engage to approach you. Th is pre-empts the criticism that you are only dealing
with ‘the same old stakeholders representatives’ who never push you hard.
However, if you do this, make sure you have the resources to at least reply to all
stakeholders that approach you.
Use the table above as guidance in learning as much as you can about the
stakeholder representatives. Visit their websites, read their reports, investigate
others’ opinions. Talk to people internally and externally who have been in touch
with these stakeholders. You may also want to have some initial conversation with
stakeholders, but be careful not to create any false expectations at this Stage.
Summarise your understanding by fi lling in parts of the summary Template 8
(next page) for each stakeholder representative that you are already engaging
with, or for those that you are considering seriously.
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Based on the completed templates consider the advantages and disadvantages
of each of the assessed stakeholder representative and create a prioritised list of
representatives that you would like to engage with on specifi c issues. You may
decide that you would like to engage with several representatives on a specifi c issue.
Th is is very recommendable if there is no single legitimate representative for the
stakeholder group (a common occurrence!), engaging with several representatives
will then provide more ‘balance’ and contribute to the completeness of your
response.
THINGS TO CONSIDER
This Template draws its contents from this step, the previously described step
where you assessed your current engagements, and on further knowledge that
you gain throughout the engagement process. Th erefore, it is important that you
do not need to fi ll in the whole Template right from the start. Th e Template
should be considered as a ‘living’ document’, used for capturing your growing
and changing experience with and knowledge of stakeholders throughout the
engagement history. You may only know enough to fi ll in some cells once you have
gone through a full engagement cycle with a stakeholder.
Continuously double check your answers with others – people within and outside
of the organisation that have experience with these representatives. Some of the
aspects you can also check directly with the stakeholders.
Be aware that the Template suggested here is only one possible way of compiling
this information. You may want to simplify it or add some rows. An alternative
approach you could adopt is to use the table on p26, with a third column, as a
means of compiling information about your stakeholders.