The Problem with Stakeholder Engagement

There is a problem with stakeholder engagement. We all use the term, but it often means different things to different people. This gives rise to confusion, crossed lines and inefficiencies.

I was recently in conversation on this very matter with the CEO of a well-known marketing consultancy. He put his finger on the challenge right away.

“You know James, the problem is, the stakeholder engagement category hasn’t been established.”

And the more I thought about it, the more I realised he was right. And here we use the term ‘category’ as a marketing person would use it. The category for stakeholder engagement has not been universally established. For some, stakeholder engagement is synonymous with public relations. Other folk see it as just another way of talking about public participation. And the project management people have their own take on stakeholder engagement. The same can be said for customer relations management or public affairs. To sum up, there is no commonly held understanding of stakeholder engagement as a substantive discipline.

Now all these other disciplines are important and they naturally form part of an organisation’s interface with the outside world. But stakeholder engagement occupies a unique space, which is generally not well understood. I find the following set of questions useful when deciding on a stakeholder engagement solution:

  • Do your organisation want [or require] a long term relationship with the stakeholder?
  • Does the stakeholder have a fundamental impact on your organisation’s performance?
  • Can your organisation clearly define what you want from the stakeholder?
  • Is the relationship dynamic?
  • Does your organisation want the relationship to improve?
  • Can your organisation do without the stakeholder?

These questions are good at winnowing down the number of stakeholder requiring structured engagement. The resultant conversations will provide the first differentiation between stakeholder engagement and the other disciplines.

It is possible to take the conversation further. You have to consider the behaviours exhibited by each organisation towards the other. Is it merely a set of mechanical meetings? Or are there deep, long-term collaborative ventures between the organisations? Do matters arise that influence the way the organisation is governed? Are there heated discussions, but the parties still walk away from the table with the relationship intact? Is licence to operate a tangible part of the relationship dynamic?

Furthermore, the articulation of issues between stakeholders is telling. Some of my clients have four bullet points on a PowerPoint™ slide, and this for them, suffices to share understanding about complex issues. Are issues expressed as unidimensional or multifaceted? Are the nuances explored and shared between the parties? Is there a willingness to understand the other side’s positions?

The final attribute that differentiates stakeholder engagement from other organisational relationship disciplines is the type of planning involved for engagement. Are they haphazard interactions aimed at building warm relationships or is there a clear outcome and purpose? Are specific engagement roles and actions defined and incorporated into personal performance contracts? Is there a planned programme of engagement and does this roll up into unambiguous metrics and a score card. Does the oversight body [board, trustees] play a role in driving and supporting the engagement actions?

All this might seem rather imprecise – so let’s express this in a more structured manner:

Organisational engagement mode….  …manifested as:
Public Relations involves managing the spread of information between an organisation and the public. Try to change the views and opinions of others in the public to be more positively disposed to the organisation.
Public Affairs involves the building and development of relations between an organisation and politicians, governments and other decision-makers. Build relations with government to secure decisions favourable to the organisation.
Public Participation facilitates the involvement of those affected by or interested in a decision. Involve the general public to convince them that a decision by the organisation was in their best interests.
Customer Relationship Management involves managing a company’s interaction with current and future customers through data analysis of customers’ history with a focus on retaining customers and driving sales. Do what is necessary to drive sales.
Stakeholder Engagement is when an organisation involves people who may be affected by its operations, or can influence the implementation of decisions about operation. These stakeholders may:

·         support or oppose the decisions,

·         be inside the organisation [employees],

·         be influential within the community in which the organisation operates,

·         hold relevant official positions or

·         be affected by the organisation’s actions in the long term.

Ensure social, economic and environmental sustainability. It is part of broad corporate social responsibility. Organisations engage stakeholders in structured dialogue to find out what social and environmental issues matter most to them in order to improve decision-making and accountability.


Once we express the differences in this way, we can understand why a person from a public relations or customer relations mind-set, fails to grasp the breadth and complexity of stakeholder engagement.

Stakeholder engagement is less about trying to convince others and win them over and more about understanding why they take a given position on an issue, and what they will lose by abandoning that position. Stakeholder engagement is also not about giving up your organisation’s stance on an issue in order to accommodate the stakeholder.

Stakeholder engagement is grounded on the belief that when persons or organisations engage deeply and honestly with each other in order improve the way they interact, everybody wins. Something magical happens in the engagement interaction and intractable problems transform into new opportunities.

We need this more than ever in our 24/7, constantly online world.

Author: James Forson

James Forson spends a great deal of time near the centre of an intricate Venn diagram where management consulting, fiction and business writing, social investment governance, home-grown vegetables and procrastination overlap.