Five “Keys” to Unlock a Successful Sustainability Program - Key 5: Maximize Stakeholder Engagement
Companies that have a genuine commitment to sustainability can implement their programs in ways that add value and clearly demonstrate their commitment.
Accurately Define and Identify Stakeholders
Many businesses take a marketing approach to customers – selecting to focus their efforts on the most profitable segments of their market. This is a sound business strategy that companies usually come to when they realize that customers are not all equivalent and that an unprofitable customer fleeing to a competitor is not only an acceptable risk, but a circumstance that may actually benefit the company.
Sustainability is a new strategy and, like market segmentation, what we may be seeing today are companies in a desperate rush to be seen as ‘socially responsible’ in fact trying to establish presence the same way some companies grab for market share without questioning the profitability. This is part of the natural learning curve for companies, particularly in the beginning of their life cycle where economic need may supplant the necessary confidence to take a longer-term view.
Just as companies eventually recognize that it may be better off ‘firing’ a customer that costs time and resources that would better be invested servicing more profitable and less demanding customers (or customer segments) so too companies must be careful when they select the issues and organizations with which to associate and partner.
Some attempt to determine the issues most of concern to their stakeholders, and this is on its face a good strategy, provided the definition of ‘stakeholder’ reflects true stakeholders in the company’s success – including customers, employers, communities, governments and suppliers who have a direct impact by the company’s success.
Whole Foods Market CEO, Chairman and Co-founder John Mackey demonstrates the alignment between sustainability and issues that matter to customers and other stakeholders when he speaks publicly about the superiority of natural and organic foods. As the leader of the world’s largest natural foods emporium, he is speaking directly to like-minded people who patronize his stores. When Mackey speaks out against biotechnology and genetically engineered foods, it in fact can be seen as a combination of his personal beliefs and values with a savvy business strategy to appeal to his customers.
Those who argue that he is simply preying on the fears of the public in order to sell more food should consider the once radical but now accepted practice of auto manufacturers who tout their vehicles’ crash test results. Are they preying on the public’s fears or responding to the genuine concerns and value-drivers of their customers?
Effectively Engage Stakeholders
True stakeholder engagement requires relationship building over time; in order to build the necessary credibility and trust that are required. It also means being active – and proactive – with your messages. Companies that wish to be seen a certain way must not only act in a manner that is compatible with their desired image, they must also communicate with their stakeholders about their commitments, efforts, results and yes, even their missteps, if they are to be credible.
Through the “Acres for America” program, Wal-Mart has pledged to conserve at least one acre of wildlife habitat for each acre the company has, or will develop over the next ten years. Through this program at least 138,000 acres of land will be protected. But no matter how well intended, this program is not providing Wal-Mart with the maximum strategic value. For example, it is largely invisible to the local community, there is no linkage to the products and services the company provides and, the average Wal-Mart associate is unaware of it and does not personally participate. The company would do well to promote the program locally with in-store signage pointing out the corresponding land that has been set aside, ideally either closest to the location in question, or most closely resembling it ecologically.
In short, stakeholders – including employees, customers, suppliers, the local community, regulators and legislators and yes, even competitors (what happens to one company often reflects on the entire industry) – are necessary for long term success of any business enterprise. Understanding this and engaging these people in dialogue, rather than as ‘audiences’ asked to receive messages is critical and a major part of ‘The New PR.’
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John Friedman, an award-winning communications professional and recognized sustainability expert with more than 20 years of experience, is co-founder and vice chair of the board for the Sustainable Business Network of Washington (SBNOW).
Friedman has served as both an external and internal sustainability leader, helping companies, ranging from small companies to leading global enterprises, turn their values into successful business models by integrating their environmental, social, and economic aspirations into their cultures and business practices.
His insights on sustainability issues and strategy are a regular feature on Huffington Post.
Friedman authored the e-publication The New PR which outlines how companies must modify the way they communicate to meet stakeholders' changing expectations through five proven keys for developing programs that replace "spin" with transparency and unlock the full potential of a sustainability program to build reputational capital. Friedman is currently working on a new book Your Backyard Is My Front Yard.