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.


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