5 steps to successfully engage your stakeholders

The business ecosystem is evolving. Business leaders are demonstrating that they see their mission as serving not only shareholders but also customers, workers, the environment, suppliers, and communities.



This evolution is stakeholder capitalism. A company is more than a balance sheet. It is an expression of human connections, a living entity that is sown and nurtured and whose fruit is lives and livelihoods. Stakeholder capitalism is a way to plant those seeds.

Embedding stakeholder capitalism into your business requires listening to your stakeholders and understanding their wants and needs. Listening is critical to building trust, and without trust, stakeholder capitalism is impossible to achieve.

Listening is not a one-off exercise and will have to change over time. Communicating and collaborating with your stakeholders to ensure that their needs are understood and met requires rigorous planning.


A successful strategy for engaging your stakeholders is one of the foundations of shaping a resilient and regenerative business. Helping you engage with your stakeholders is part of our 4-stage pathway.



Our Stakeholder Engagement Strategy framework aligns with the AccountAbility AA1000 SES global standard.

Not all businesses will require such a comprehensive approach, and how we use the framework to design a strategy for your company will depend on many factors. These include the size and complexity of your business, the number, diversity, and geography of your stakeholders, the industry you operate in, and your own needs and priorities.



Here are the 5 steps for designing and implementing a stakeholder engagement strategy:

Preparation


Setting the Objective

As a sustainable business, putting people and communities first is at the heart of what you do. By engaging in tailored ways, you can identify your stakeholders' wants and needs while maximising the value that you add to your customers. The informed feedback that you gather will result in clear and measurable actions that deliver the outcomes your stakeholders want and ultimately shape how your business operates.

Defining the Guiding Principles

Inclusivity

Encouraging a wide range of diverse customers and stakeholders to co-determine priority issues and engagements and voice opinions on business initiatives.

Transparency

Consistently demonstrate that openness, honesty, and accountability guide the organisation's decisions and are embedded within initiatives and outputs.

Continuous Improvement

Aiming to identify key stakeholder issues before they arise, proactively resolve issues when they do, and ensure that the outcomes are communicated to stakeholders.


The Step-by-Step Approach




Step 1: Engagement Planning

1. Identify topics for engagement

Perform a Materiality Assessment to identify the topics and areas of interest to engage your stakeholders. The engagement needs to be driven by critical issues directly affecting customers, employees, and business partners.


Using a Materiality Matrix, list and categorise the identified topics and align them with your business strategy.

  • Identify root causes of the topics voiced by your stakeholders to guide impactful engagement actions and remedy long-term problems faced by them

  • Determine the most impactful recurring issues that will determine your engagement

  • Schedule sessions to enable stakeholders to articulate issues


List and categorise topics which the engagement will be based on

Processes to use in this step:

→ 5-Part Materiality Assessment

→ 4 stages of issue maturity

→ Materiality Matrix



2. Define the purpose

It is crucial to be specific on the objective of the engagement and have clearly defined questions relevant to the identified topic or issue being discussed.


A list of straightforward questions is prepared for every topic to be discussed. The questions are defined before undertaking the engagement and are made available for stakeholders to answer during the engagement events.


Forming detailed questions provide a basis to record, measure, and determine whether the engagement event meets its goals.



3. Identify stakeholders

There are three broad categories of stakeholders:

  • Stakeholders who are inside the company, including employees, executives, the board, and shareholders

  • Those who are outside the company but interact directly with it, such as customers, suppliers, and non-shareholder investors such as banks

  • Entities that are outside the company but are critical to its operations, such as governments, communities, and the environment.

These categories are not clear; some stakeholders can fit into multiple categories. Use Stakeholder Mapping to categorise stakeholders and create a Stakeholder Profile to identify who is best placed to answer the questions defined in Step 2.

  • Continually update your list of stakeholders and recognise who you should engage with

  • Stakeholder segmentation is the process that will identify who your stakeholders are and who are best suited to provide feedback across a range of topics

According to every topic identified in Step 2, all stakeholders are assigned a knowledge score using a Segmentation Tool.


Processes to use in this step:

→ Stakeholder Map

→ Stakeholder Influence and Dependency Matrix

→ Stakeholder Segmentation


4. Tailor the engagement

a) Tailoring the engagement methods

To reach and communicate effectively with your target stakeholder group requires the selection of appropriate engagement methods. Using a matrix, rank stakeholders according to their knowledge of the issues and topics.


The chosen engagement methods are subject to review before and after the engagement to ensure that your stakeholders have been collaborated with in such a way that enables them to provide informed feedback.


Processes to use in this step:

→ Levels of Engagement

→ Questions for selecting engagement methods

→ Common stakeholder engagement approaches


b) Tailoring the engagement content

Tailoring the content before, during, and after the engagement is key to getting valid and informed feedback from your stakeholders.

  • Adapt your content based on the level of knowledge of your stakeholders

  • Adapt the level of detail and tailor content based on whether you are educating, informing or gathering information from stakeholders

Processes to use in this step:

→ Stakeholder Profile - Key Issues

→ Consider what the organisation is and is not able to do in relation to these issues and expectations

→ Develop a strategic engagement plan which lays out which groups of stakeholders you need to engage with, at what level and what you hope to achieve

→ Design and prepare for the engagement process



Step 2. Engage

5. Engage with your stakeholders.

Creating change requires listening to your stakeholders. Building an understanding of needs and wants is essential. Equally essential is prioritising these needs and wants, which form part of Step 3.



Step 3. Reviewing Feedback

6. Capture Feedback

After engaging with your stakeholders through various channels, it is crucial to capture the informed feedback that you gather. This will shape the direction of your future business decisions and strategies.


Using a Stakeholder Engagement Feedback template, capture feedback on;

  • the engagement event,

  • the questions defined in Step 2, and

  • more broadly on the quality of engagement.

Processes to use in this step:

→ Stakeholder Engagement Feedback



7. Co-determine actions

The success of your Stakeholder Engagement Strategy depends highly on the subsequent actions that you choose to take based on the feedback captured from engagement events.


Analyse feedback from stakeholders and, where relevant, work with them further to co-determine the actions you should take to improve your business processes and the actual engagement process.


Record all of the actions captured in an Action Tracker, which provides;

  • a central repository of all actions identified,

  • the relative risk that inaction on each of them carries, and

  • critical information such as priority and action owners.


Processes to use in this step:

→ Action Tracker



8. Prioritise efforts


The feedback gathered from engagement events will give rise to a wide range of possible actions. Feedback may be on marginal improvements to the engagement process, while other feedback will shed light on how you can improve business-critical processes. Therefore different actions will come with different priorities. To reflect the urgency attached to each action, allocate a red-amber-green status in the Action Tracker.


Step 4. Act

9. Define and measure ways to serve stakeholders


The objective of your structured stakeholder engagement process is only achieved if the feedback that you gather is translated into actions and, in turn, if these actions are controlled and completed by the most appropriate colleagues.


Serving all stakeholders is an ethical good, and companies should seek to maximise stakeholder impact. Refer: How to create impact for your stakeholders.


Processes to use in this step:

→ Develop a plan of action, including SMART Targets

→ Report back to stakeholders




Step 5. Close the feedback loop

10. Continuous improvement

You should aim to continually improve the engagement strategy based on your first-hand experience. Stakeholder Engagement Feedback captures learning from each engagement event and includes sections dedicated to the quality of facilitation, the level and ability of stakeholders to participate, etc.


The feedback captured in this section should be reviewed at regular intervals to identify how you can improve your planning process and the quality of your engagement events.


Feedback on wants and needs will be taken into the business for action. Issues and opportunities will feed into future engagement decision-making, linking back to Step 1- Identifying Topics for Engagement.


Processes to use in this step:

→ Review the engagement process to improve future management

→ Stakeholder Engagement Feedback