Organising for engagement

Organisations that engage well, are generally doing well (see my online stakeholder engagement post). So how do we embed engagement processes into organisational design? As organising around hierarchy was a core process of industrial age organisations, engaging is a core process of 21st Century knowledge age organisations. This calls for a reorganisation of how we work. From this perspective, if we strip organisations down to essentials, there are three core functions:

  • production of goods or services
  • engagement (internal and external)
  • support (e.g. leadership, management, finance)

The engagement ethos must displace older patterns of relating, and reorganising around this structure will help that to happen. Some functions that are clearly engagement functions are marketing, public relations, customer service and communications. Others, such as information systems could be positioned as either engagement, or support.

Leadership implications

For smaller organisations, especially commercial operations, this could translate easily to a three-person leadership team. Larger organisations is where it gets really interesting. Eric McNutty and Rupert Davis in the December 2010 Harvard Business Review ask, “Should the C-Suite have a green seat?” They discuss the relative merits of having a Chief Sustainability Officer, such as SAP’s Peter Graf. While I believe that stakeholder engagement is a function of sustainability, perhaps sustainability shouldn’t be partitioned off, but rather should be a guiding value of every organisational function, championed by the CEO. Companies that are successfully championing sustainability, such as Interface have a strong CEO or executive team driving it.

If sustainability is the goal, engagement is a means of achieving the goal. As discussed before, engagement represents a new way of relating. While sustainability calls us to rethink how we sustain our environment, society and economic well being, engagement calls us to rethink how we relate with one another – so fundamental to, and vital for, our survival and well-being.

So a Chief Engagement Officer would be a great place to start (its just unfortunate that the acronym is CEO).

Marketing, public relations and customer services

Positioning marketing, public relations and customer services as engagement processes should reorient them in most organisations. In many organisations these functions still have a “hunter-gatherer” approach – go out and score a new customer or fight off competitors. Securing new customers gets more attention than retaining existing customers. Engaging infers a longer-term orientation and creating relationships rather than merely completing transactions. For example, Zappos uses its call centre to engage and as a source of information and opportunity to create a relationship. They have no scripts, quotas or call time limits.

What do you think of the production, engagement, support model? Are there functions that wouldn’t fit? And where would you position human resources?

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Online stakeholder engagement – making the most of social media

How big is your company’s digital footprint – your online presence? As your digital footprint grows, your potential for online engagement grows with it. Ask yourself:

  • What are the interactive features of our website? How are we engaging? How transparent are we?
  • Do we have a LinkedIn group? How many of our staff are engaged there? Are we using Linked in to advertise jobs or link with other relevant industry groups?
  • Do we have a company presence on Facebook and Twitter? Are we monitoring what people are saying about us and how are we responding? How many followers do we have? Is our CEO leading the way?
  • Do we have a blog? What is our focus?

Growing your digital footprint, is a cost-effective way to enhance your brand. According to David Edelman, (in December 2010’s Harvard Business Review) up to 90% of a company’s marketing spend goes to advertising and retail promotions – “yet the single most powerful impetus to buy is often someone else’s advocacy”. If building customer loyalty grows sales – we can expect that building stakeholder loyalty, or at least engagement, will build your social capital.

Rather than build the case for enhancing you web presence, I now want to focus on two avenues to achieve greater online engagement.

Facebook

Nearly 20 million people “like” Starbucks providing the company with a platform to build their brand. Loyal fans promote their products without being prompted – the “mountain coming to the Muhammad”. Before I read their page, I wasn’t aware of the existence of an Earl Grey latte non-fat – but now I know where to go if I need one! The page I viewed included a suggestion from a customer for a Valentine’s drink.

Starbucks also uses their site to provide information about the company and its products, has an app for those wanting to find jobs at Starbucks and connects its fans to worthwhile social causes. For more on Starbucks, check out The Starbucks Formula for Social Media Success.

On a smaller scale, Tourism New Zealand’s Facebook page 100% Pure New Zealand, has over 300,000 followers. It’s a great platform for breathtaking photography and video featuring New Zealand. The front page appears to populated by staff, and engages through comments and “likes”. A “discussions” page enables engagement.

Blogs

If Facebook is not for you, consider a company blog. While blogs typically don’t reach the numbers as social media such as Facebook, a big upside is that you can screen out negative comments if you choose.

Blogger Mark Schaefer finds most company blogs bland, but has identified his top ten company blogs. He has excluded blogs for tech companies such as IBM and Oracle, because they are “so far ahead of the rest of the corporate world”.

Links to Mark Schaefer’s top ten blogs and their apparent goals
(unranked)

Caterpillar (problem-solving, community-building, loyalty)

Starbucks (new product development, engagement)

Marriott (customer satisfaction, sales, crises management)

Wegmans (direct sales, loyalty)

Manpower (thought leadership)

General electric (brand awareness)

Fiskars (customer engagement, brand awareness)

Southwest airlines (enhance corporate image and integrate with traditional media)

Patagonia (complement brand image, engage community)

Whole Foods Market (complement brand image, direct sales)

Note how these companies are using their blogs in pursuit of a diverse range of goals, but engagement, and aspects of community building are common to most.

If you are thinking that companies like Caterpiller and IBM (who are doing very nicely as figures emerge from the latest earnings season) have huge resources to support their blogging, consider this blog. I write Stakeholder Engagement blogs on a shoestring budget. From approximately 150 million blogs, mine appears second on a current Google search for blogs – and I haven’t got around to any search engine optimisation yet, apart from a few tags.

Mark Schaefer writes more about the benefits of blogging here.

Of course there is a down-side too. Those wanting to damage your reputation can have influence far beyond their numbers and resources by utilising social media. But why surrender without even joining the game? HBR’s Leslie Gaines-Ross recommends stockpiling your online credentials to draw on should they be needed.

So now’s a good time to engage online. There has been a fundamental shift from the shareholder to the stakeholder, and from announcement to engagement. The engagement ethos needs to permeate everything we do. We have two options – engagement or extinction.

Stakeholder Engagement for SMEs

Many sustainability processes, such as Accountability’s excellent AA1000 Stakeholder Engagement Standard (AA1000SES) are complex and require significant resources to implement them to their full extent. This poses a problem for small and medium enterprises (SMEs), as the resource requirements for implementing the system, could well divert those resources away from the business end of engagement.

Unlike clothing stores, many business systems are designed for the biggest in the business. When smaller businesses try those systems on, they find they are not necessarily designed to scale down. I live in a small city in a small country (New Zealand) that has a smaller GDP than dozens of corporates – so even our largest companies are comparatively small.

Another level of complexity, is that standards such as the AA1000SES are relatively new and still rapidly evolving. The AA1000SES is currently in the final stages of a major revision, so those that use it need to invest in ongoing development in the use of the standard. (Accountability’s revision process in itself is a stunning example of engagement, as the revision takes place online in a wiki, inviting contributions and comments).

So how do we garner the benefits from formalising engagement, while minimising initial costs?

The AA1000SES currently has a four-stage engagement process consisting of 18 steps. And note that this is the heart of the process and does not include the strategic context or assurance processes.

In simplifying the process there is always the possibility of eroding its value, but I believe that it is better to make a start and scale up, rather than wait for all the necessary resources to be available. Surely at the heart of the engagement ethos, is not the need to polish the veneer and look good, but rather to get to a point where we can engage in honest dialogue – and thus attain a better understanding of each other as a sound foundation for business sustainability.

So what are the essentials?

  1. Mapping stakeholders
  2. identifying material issues
  3. creating a draft plan
  4. engaging the engagers and building capability
  5. engaging
  6. reflecting and revising the plan.

Mapping stakeholders can be done with a small cross-section of staff, especially those with deep institutional knowledge and local connections. Ask this group “who are the stakeholders that we impact, or impact on us, we have some moral or legal responsibility for, who are geographically close or are relevant to our strategic intent?” Each of these factors can be scored on a scale of 0 to 3 (low to high relevance), and then ranked by total score. You will find that stakeholders such as staff and owners will be prominent, but some, more external, will also feature. I advocate starting with the top 10 stakeholders and focussing your efforts on them (more about this in the next blog).

Material issues are those issues of concern to your stakeholders. Its good to attempt to quantify these before launching into engagement. Again a mapping process is useful. This time, consider the impact of this issue on both you and your stakeholders, the potential for impact and the potential for positive change (to what extent can you improve with this issue?). What you will find fascinating with this process, is that it forces people to look at the issues from another perspective, sometimes, not easy to do. Again, you will end up with a ranked list. When you eventually engage, you will at least learn about any perceptual gaps between you and your stakeholders. Here is Vodafone’s mapping of material issues from their 2010 Sustainability Report.

Future blogs will deal more with the planning, reflecting and revising, so now lets consider engaging the engagers and building capability. Each stakeholder group is linked to someone who will lead, or at least monitor engagement. For some groups, there will be natural internal candidates, for example, client stakeholders might be linked to sales or manufacturing personnel. Those external stakeholder groups that don’t have a natural internal partner may need to be linked to a staff member charged with engagement.

You will now need to consider how well equipped this core group, and the wider organisation, is equipped to engage. The good news here, is that the skills and knowledge required to support good engagement – leadership, learning, communication and adaptive capacity (change), also support organisational development. The aim is to have all staff as enthused ambassadors for the organisation. Rather than wait for everyone to be totally equipped, at the very least, articulate these values and ensure that they are modelled from the top.

The first round of engagement can test the assumptions from your internal dialogue. Initially it is best to engage with each stakeholder in the method most appropriate for them. Ideally you will learn where you are doing well, and where you can improve, and it is in the latter where exciting opportunities may await. Engagement is an action learning process, so while engagement will be happening in different ways with different stakeholders, work to a consistent timeline for reflection and revising your plans.

Over time, as you complete more cycles of planning, engaging and reflecting, you can gradually align your processes more formally to the AA1000SES –and be a little more like the big boys.

Stakeholder engagement, culture and strategy

In earlier days, corporate sustainability was an add-on. Companies were often motivated by risk-aversion and the need to improve public relations. A rare few were motivated by genuine sustainability aspirations.

Stakeholder engagement is one of the more recent fruits of sustainability practice. Stakeholder engagement has evolved to a point where it can now move from the periphery to contribute as a core business process, supporting a strong culture and informing strategy.

Edgar Schein’s definition of culture illustrates how stakeholder engagement can make to cultural development. Culture is:

a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.

Let’s look at how two important elements of culture – external adaptation and internal integration are supported by stakeholder engagement. We know the pace of change seems to be ever increasing. We will continue to witness massive changes over the next few decades as we move to a low-carbon future and grapple with the complex economic and social problems of our global community. Those companies that lack adaptive capacity will simply not survive. If the thinking of those at the helm remains grounded in decades past, and they continue with succession practices that essentially clone themselves, they will struggle.

Engagement processes aspire to create dialogue with stakeholders – those affected by a company’s operations, or who can affect that company. When engagement processes work well, the company and its stakeholders will enjoy greater mutual understanding and get closer to shared meaning – where both parties have deeper understanding and empathy of each other’s perspective. This in turn, becomes a platform for external adaptation – as the company sees the world more through the eyes of its stakeholders, rather than its own filters.

To engage effectively, ideally all staff become the eyes, ears and voice of the company. Engaged staff, who understand the importance of engagement, are primed to spot threats or opportunities in the environment. And if the company’s learning processes are effective, the information from those staff members becomes useful knowledge.

Thus internal integration is closely linked to in external adaptation. These processes support each other.  Both require transparent communication, clear vision and the explicit expression of the values that underpin a culture of engagement.

Unfortunately, surveys from around the globe indicate that typically 60% of staff are disengaged. The good news is, that improving engagement with any group of stakeholders is likely to embed better engagement practices, potentially supporting better engagement with all stakeholders.

Of course these days, it is difficult to define a clear boundary between the internal and external. For example many companies have sub-contractors delivering core services. Others have suppliers manage the goods they provide. Some of the more successful companies are expanding the zone where internals and externals overlap.

By now you will see the link with strategy. Recall how a component of strategy was environmental scanning. The inference here is of a captain scanning the horizon from the bridge of the ship as it sails through dangerous seas. Engaging is a totally different way of informing strategy – it seeks to work with the “environment” in a more dynamic way, relying on shared understanding, rather than detached observation.

How does your company establish stakeholder engagement as a core business process? A first step is to establish a stakeholder engagement plan. This may mean simply formalising and intensifying what you already do. AccountAbility’s Stakeholder Engagement Standard is a great tool to use. As you draft your first plan, you will find that elements of strategy start to emerge. And as you intensify the process through engagement with stakeholders, more knowledge to inform strategy will surface. You will also see more clearly how the dynamics of leadership, organisational learning, communication and adaptive capacity (change) are critical to engagement, while also strongly supporting an adaptive culture.

Peter Bruce