“Stakeholder,” a word as vague as anything, has come to dominate corporate vernacular as a kind of catch-all term for groups or individuals that are “important.” As opposed to elevating and personalizing the groups and individuals who enable a business to run–customers, shareholders, vendors, advocacy organizations, regulators, etc.—the careless use of this terminology has trivialized this important practice.
As aptly put by the Aspen Institute’s Judy Samuelson, “the word stakeholder fails to capture the dynamism of changing expectations of business and the complex challenges that put both humans and institutions at risk.” We agree; by labeling and interacting with stakeholders in this one-dimensional sense, companies undermine how important it is to achieve what they are ultimately after: relationships and a reputation that supports their business objectives.
At APCO Worldwide, we help organizations repair, build, and strengthen their reputation. Doing that well requires a clear understanding of one thing: people engage with companies they respect. This comes down to how well you listen, communicate and act. Companies that succeed incorporate these principles into every interaction and a positive reputation often follows. Conversely, those with facing challenges often see their problems drag on because of public and private reactions to inauthentic or half-hearted efforts to address issues.
Maintaining a consistent and open dialogue with your constituents, allies and critics in times of both calm and crisis can prevent circumstances that enflame controversy and erode reputation. What’s more, these discussions can help leaders uncover risks that should inform business decisions and identify new opportunities.
Building and maintaining authentic relationships with the people you serve is one of the single most impactful activities an organization can invest in. Here are seven ways you can put the lost art of “stakeholder” engagement back where it belongs:
- Give definition and distinction to your “stakeholders”—While “stakeholder” as a term is unlikely to disappear from the lexicon anytime soon (and for ease of reference, we’ll continue to use it here), it is important to define the specific characteristics and needs of each of the groups important to your business. What do your customers, partners, shareholders, employees value? What do they expect from your organization? Your approach to each of these groups will differ, and it is important to delineate how you engage them out the gate—they are not interchangeable. Make your outreach more personalized than the term used to define them.
- Make stakeholders a central factor in business decisions—No business decision, small or large, can be made without an understanding of the impact on these key groups. If we do not know how stakeholders will react, either positively or negatively, then we do not know enough to make an informed business decision. If you must upset a stakeholder, do the homework to understand why, and take proactive steps to help them understand why you made the decision.
- Give stakeholders agency—Effective engagement is not a one-way conversation. Provide opportunities for stakeholder input—as early as possible—that will help inform the company’s decisions. Many minds will dwell on risk here—these must be acknowledged and appreciated but assess what’s feasible to help build consensus and recruit allies in carrying efforts forward.
- Put people out front—Every stakeholder your business touches should have a designated relationship owner to understand that stakeholder in and out, escalate their concerns and share updates early and often. It is easy to publicly lambast a company but harder to have those conversations with a real person.
- Prepare for your critics—Critics critique, and usually in very predictable ways. Listen to your critics but never over rotate; learn to understand their patterns, prepare internal teams and leaders for these eventualities, and focus on other ways to build support and mitigate negative impacts. While you may never win over your harshest critics, you can certainly make more of them if you are not careful.
- Shore up your supporters—If you have allies, keep them happy and engaged. It can take years to secure a stakeholder’s support and a day to lose it. Give them opportunities to show their support in ways that advance their priorities and objectives. They have constituencies and boards to answer to as well, and you would be surprised by how often you will find yourself on the same side of an issue.
- Team up on challenges—As opposed to going it alone, it is critical to dedicate time and resources to identifying shared priorities with those with common problems, providing opportunities to co-create solutions where everyone has skin in the game.
Whatever the challenge, we have seen time and time again that traditional communications and public affairs tactics alone struggle to move the needle against complex reputational challenges. The adage, “you can’t communicate yourself out of a problem you acted your way into” rings particularly and increasingly true. Across every industry we touch, we have experienced one common thread: “stakeholders” are king, and they must be put at the center, always.