I really feel for non-executive directors, be they lead, independent; or listed or non-listed! They face a raft of challenges. These challenges fall awkwardly under a barrage of different headings: regulation, ethics, environment, law, competition, compliance, social investment, commercial sustainability, etc., the list goes on. Continue reading “The dilemma of the non-executive director”
The 2016 Local Government Elections are taking place next week. I see posters in our suburb proclaiming three candidates for my local ward. I know nothing about any one of them and they certainly know nothing about me. Continue reading “The 2016 Local Government Elections”
[This is a re-post of a blog I have published elsewhere]
Leading an organisation is much like flying an aircraft. To fly an aircraft successfully, you need a clear understanding of what your destination will be. You need to know the weather conditions along the way so that you can avoid storms and be prepared for turbulence: and you need to know other aircraft movements along the way so that you don’t collide with each other. And of course you need a well maintained aircraft.
The same applies to organisations, regardless of whether it is a government department, an NGO or a private enterprise. Three sets of information are needed in the Executive Cockpit. Firstly, you need your Strategy. This is your flight plan. It explains how you will get from where you are now, to where you want to be. It provides direction, lists resources required and describes the outcomes to be achieved. It is usually articulated within the performance management processes of the organisation, and enjoys significant attention.
Then you need a set of Scenarios to give you some idea of what the future could be like. Scenarios are descriptions of a set of possible futures based on assumptions about those long term futures. The Strategy is tested inside each scenario to assess the likelihood of success or failure of different strategic actions. Will there be sufficient demand for a new service? How will supply chains and procurement be affected? How will competition change? Have new technologies destroyed a product or service? Will political instability affect execution of the strategy?
But there is another important set of considerations to take into account to improve the chances of success. An organisation undertaking a structured approach to Stakeholder Engagement will improve its licence to operate, to be regarded as a trusted, valued participant, in a challenging business environment. This is a frequently neglected area in the Executive Cockpit. Organisations should ideally understand and respond to legitimate stakeholder concerns. In spite of interacting daily with their stakeholders they frequently do not understand them well. This in turn means that they do not encourage their stakeholders’ participation in shaping the future of the organisation.
Let’s expand on this a bit more. We have all seen Integrated Reports for companies listed on the Stock Exchange. Somewhere towards the back is a generic list of stakeholders with a bald statement: “The company creates regular opportunities to meet with stakeholders and to address their concerns.” Companies who pay lip service to stakeholder engagement are missing out of valuable opportunities.
A systematic approach to Stakeholder Engagement allows an organisation to discover what really matters to their key stakeholders.
Stakeholders gain a better understanding of your organisation by providing feedback on corporate strategies and performance and in identifying what and how things can be changed. You in turn have a better understanding of why they react in certain ways, and you can craft your responses accordingly with favourable outcomes. This increases beneficial communication and allows the organisation to monitor and manage stakeholder contributions and satisfaction levels.
Good stakeholder engagement puts value in the Licence to Operate piggy bank. It’s a slow process of accumulation. Little by little, trust is gained. But one day, when you really need it, it could save your organisation from disaster. This is a source of comparative advantage. An organisation with more stakeholder value stored in its license to operate piggy bank will be more resilient than an organisation that has not made this investment.
Poor stakeholder engagement can result in ruined reputations, lost market opportunities, disgruntled employees and customers as well as expensive, drawn out lawsuits.
To get your stakeholders working with you, rather than against you; you need to understand their concerns and priorities; you need to understand what their perception is of your organisation; you need to understand what their level of satisfaction is with your organisation and you need to better understand their strategic intentions and priorities. Stakeholder engagement works particularly well in heavily regulated environments: Mining, pharmaceuticals and financial services. But many more organisations derive great strategic value from a well-planned and executed stakeholder engagement strategy.
South Africa is going through turbulent times. Budgets are being cut, employees are jittery, businesses are struggling, government is cutting back on spending. Now is the time to invest wisely in effective stakeholder engagement. Make an investment in the licence to operate piggy bank.
Forson Consulting helps clients develop and implement effective stakeholder engagement strategies.
James Forson is a former Associate Director of AccountAbility, the international organisation that maintains the AA1000 Stakeholder Engagement Standard.
083 625 38 62
We are living in a time of dysfunctional government, widespread corruption and laggardly economic performance. Once an organisation is labelled with a MustFall hashtag, it inevitably loses value and its Licence to Operate [LTO]. Continue reading “From ‘Them’ to ‘Us’: making stakeholder engagement work”
This is my first post here! This blog is mainly about stakeholder engagement but it will include other things.
I used to be in the corporate world, but 23 years ago I set up on my own as a management consultant. I have been through various iterations of working with partners. However, I seem to function best in my own business.
My work has been mainly in organisational renewal and organisation design, strategy, due diligence and feasibility, regulatory impact assessment and of course stakeholder engagement.
I came to stakeholder engagement by accident. I was working for a large national client, and they were looking for a systematic approach to managing stakeholder engagement. As so often happens they were confusing stakeholder engagement with communications and public relations.
Eventually I found an organisation called AccountAbility, the custodian of the AA1000 suite of Standards, particularly the AA1000 Stakeholder Engagement Standard. For a short while, I was the AccountAbility Associate Director for Emerging Markets.
For the past six years, I have slowly been building up my experience in the design, implementation and management of stakeholder engagement strategies.
Understanding the Standard is one thing. Getting it set up and working in an organisation is another. Many overseas organisations use stakeholder engagement as part of their CSI and Environmental strategies. In South Africa, it takes on a much deeper sustainability meaning linked to the licence to operate.
Why am I so passionate about stakeholder engagement?
We live in the time of Marikana, and Vuwani, of burning schools and #RhodesMustFall. We live in a time of service delivery protests and making the streets ungovernable. Embedded in our society is a loss of trust, a loss of the licence to operate. It has been brought about by neglecting or disrespecting important stakeholders.
Honest, hardworking stakeholder engagement, by government, business and civic organisations will go a long way to improving our society if we can reach out to each other, honour and recognise each other’s licences to operate and build the trust and respect required.
This is not about a political solution, or an economic solution or an ideological solution. It’s about ordinary South Africans finding each other, understanding each other’s issues and resolving to improve relationships.
I do not intend to start a stakeholder engagement consultancy. I like to work on my own, giving quality time to my clients. There is far more work in South Africa than I can ever cope with. I want to share my experience, and help those organisations that actively want to create a better South Africa. Moreover, do so without political slogans, without accusations and without corruption.
I want to share ideas on the practice of stakeholder engagement. I will share some of my other consulting insights, but mainly I will blog about stakeholder engagement. I hope you will follow me and that we can work together to improve trust levels throughout our community, our society and our country.
Follow me or come back here from time to time. It’s good to make the journey with you.