The Importance of Stakeholder Engagement

This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

Keeping your stakeholders "engaged" is not the only function of stakeholder engagement within the boundaries of CSR. Indeed, engaging your stakeholder is the basis for  good corporate governance and this is often something that companies either ignore or underestimate. In my practice, often I think of stakeholder engagement as a web of connections between all the various components. It helps to get a definite mind-map of the situation and mark out all the important connections between the various stakeholders both upstream and downstream.

Two Tiers of Stakeholder Engagement

Any company, at any given point has to deal with suppliers, distributors, customers and employees - these are the stakeholders that they engage with on a daily basis and are therefore the first tier and most important (always giving allowances for the type of business). The second tier is the wider community, NGOs, labour organizations, governmental institutions, industry organizations and financial bodies. This distinction is important because it allows for a clearer distinction  of how to strategize stakeholder engagement as well as to draw parallels between the two tiers.

In the age of social media there are many ways to engage with your stakeholders, especially with the first tier. This kind of direct dialogue is important for companies because not only are they doing some very essential PR and marketing but it is also needed to take a direct pulse of a company's performance and also how well their products are received.

Employee engagement is one of the key components of first tier engagement in my opinion. Not only are employees the brand ambassadors, they are also customers which gives them a unique perspective into the business model. Having a strong program of employee engagement is essential and many companies are beginning to realize this. Not only are employees attracted to companies with active engagement, but a good system of employee engagement also means that employees continue to work for the company thereby increasing brand loyalty.

When the Tiers Cross-Over

The next most important consideration for stakeholder engagement is an example of how the two tiers can cross over. Consumers and the larger community constitute not only a first and second tier but also a crossover between the two. Community engagement programs not only speak to the larger community and potential consumers but also existing consumers to reinforce brand loyalty. Of course when you put these two examples together there are many levels of interactions between these stakeholder groups - employees are also consumers but are also members of the community at large. In this manner the web of connection grows, programs have to become more sophisticated in order to get a larger 'throw.'

Six Degrees of Separation

One of the things that gets taken for granted is the rule of 'six degrees of separation' - with the advent of social media I reckon the degrees of separation have been reduced even further. Good news travels, but bad news travels faster - this is never more important than when dealing with stakeholder engagement. Erudite communication therefore is one of the best tools for effective engagement. Drawing a fine line between too much information and too little information is a constant dance that companies have to contend with for a successful program of engagement. Apart from this, communicating is such a way that your stakeholders are talking back and you are not just talking at them.

The key to good social engagement is a series of events where first the initial web is established. Then the two tiers are constructed. The third step is designing the connections between the two tiers and expanding the web. Finally, effective communication of initiatives is the glue that holds together the web of stakeholder engagement.

Image credit: Perry Grone/Unsplash