Lecture slides on effective stakeholder engagement. Oct 31, 2014. London
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Aligning interests: Stakeholder engagement tools, strategies and approaches
1. Aligning Interests
Stakeholder engagement
tools & approaches
Wayne Dunn
President & Founder
CSR Training Institute
Professor of Practice in CSR @ McGill
wayne@csrtraininginstitute.com
www.csrtraininginstitute.com
Thursday Oct 30, 2014
London, England
2. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Should business
serve shareholders? Should business
serve society?
We help it to do both. Simultaneously
Consulting
Advisory services
Training
CSR events
Strategy
Project review
CSR diagnostics
Custom workshops
Partnership development
Stakeholder engagement
Executive programs
CSR communications
3. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Aligning Interests
Value for shareholders AND society
4. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Session Objectives / Agenda
Think Inside AND Outside the Box
• Stakeholder engagement: Simple but not easy:
Develop some common understanding around
stakeholder engagement
• Aligning Interests: Self-interest, the sustainable
common denominator for all stakeholders
• Strategic tools & approaches:
• Some Cases
• Guinness Ghana
• Extractive Sector Case
• Industrial chemicals marketing case
• Competing stakeholder interests
• Discussion
Value for
shareholders
AND
society
5. CSR/Stakeholder engagement
in the OLDEN DAYS
Policies &
Good Intentions
Solving Social
Problems
Suddenly
communities could
influence how, or
if, a project could
proceed.
Business had a
new challenge to
figure out
6. the OLDEN DAYS (cont)
Stakeholder Engagement/Community Relations
Framework
Plan
?Results?
System
7. Stakeholder Engagement/CSR
Compliance / Strategic
Compliance
• Internal codes
• External codes & guidelines
• Global norms
• Reporting protocols
• CSR Laws & regulations
• Often zero sum
Important, but tend to establish
a ceiling. Everyone targets
minimum required (who
volunteers to pay more tax?)
Strategic
• Room for innovation &
creativity
• More challenging, even
overwhelming (blank slate
fear)
• More room for value creation
(make bigger pie)
• More fun and interesting (for
me anyway)
Both are important. Some
balance between the two is
ideal
8. Compliance / Strategic
Compliance
• Change over time
• FPIC
• IFC/World Bank
• Canada-Supreme Court
grants Indigenous Title:
Tsilhqot'in Nation v.
British Columbia
Compliance is price of
admission – and admission
costs keep rising
Strategic
• Will focus on strategic in
this session
Both are important. Some
balance between the two is
ideal
9. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Stakeholder engagment: Simple, but not easy
Sometimes even confusing
10. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
CSR: Simple, but not easy
What’s in it
for me?
Aligned with
What’s in it
for you?
11. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
CSR: What’s In It For Me?
Does CSR make sense
without self-interest?
Key issue is value alignment:
Value propositions that align
shareholder interests with
those of other stakeholders
12. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
It is about value
• $121M in cost savings by developing local supply
chain
BHP Billiton
• 60% of water reclamation project offset through
partnership/shared value strategy
Anglo American
• 20% reduction in cost of treating by-products by
re-purposing water used in production processes
Pacific Rubiales
• 88,000 reduction in shifts lost to malaria
Anglogold Ashanti
*Extracting with Purpose, FSG
14. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
If not Value, then what?
15. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Effective stakeholder engagement
What’s in it for me
What’s in it for you
16. Step by Step How To
• Great if nothing
changes
But…
• Tend to be specific to
projects, companies,
industries, countries,
etc.
Strategies & Approaches
• Foundational
• Can be applied to ‘How
To’ guides
• Portable across
projects, companies,
industries, countries,
etc.
Stakeholder Engagement
Needs to be some of both
Our focus will lean towards the art side
Science or Art
17. Strategies & Approaches
• Best strategic practices,
strategic guidelines, principles
• Provide tools frameworks for
addressing tactical/structural
topics
• Will review and use case
studies and group work to
deepen understanding
Tactical/Structural Topics
• Pre-engagement due-diligence
• Stakeholder mapping
• Stakeholder engagement
planning
• Social entry strategy/approach
• Data management and
reporting
• Managing expectations
• Capacity building
• Partnerships
• Training your bosses
Strategies & Approaches
18. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
19. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
What about “Shared Value”
The ‘Shared Value’ 4 bucket model
Do
Nothing
Bad
Philanthropy
Better
But not good
CSR
Alright
OK..
The Best
Shared
Value
22. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Value Sustainability
•CapEx or OpEx?
• Does the initial investment continue to
provide value beyond the investment
timeframe
• Community Sports Event
• Local Supply Chain Development
24. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
25. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Best practices in effective
stakeholder engagement
Foundation: Honesty, trust, integrity, openness, humility &
transparency
1. Think Value and Interests – and do it transparently
2. It’s OK to disagree – but, disagree without being
disagreeable. And stay curious
3. Do compliance but think and act strategically – check the
boxes yes, but that is just the foundation
4. Share the credit, multiply the resources. Find partners!
5. Communicate so you are heard and understood.
6. Define stakeholders broadly and strategically – go beyond
compliance
Will review each and then look at how each applies in a case
26. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
1. Think value & interests
and do it transparently
• Engagement is based on
self-interest
• Be open about your
interests and shareholder
value
• Invest a lot of time and
effort in thinking about
your stakeholder’s
interests
• Don’t judge their
interests. Identify them.
Think about how you can
further them.
27. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Be creative – think outside the box
• Don’t limit yourself to the obvious
• Look at other industries and sectors
• Sometimes you’ll find interesting examples
28. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Scrimshaw Artworks
• Hobby to a business
• Creating allies
• Creating cash-flow
• Aligning interests
• Creating & leveraging value
• $3 cost: Up to $5,000 value
29. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
30. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
RCMP Foundation Series
31. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
And the winner is
• Over $10,000,000 raised
through donations of prints
and artwork
• Over $1,000,000 cash
contributed through co-
published prints
• Over $300,000 for RCMP
Foundation alone (19 prints)
• 65% of prints are co-published
with charities
• Glen built comfortable life
from a passionate hobby
www.glenscrimshaw.com
32. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
2. It’s OK to disagree
• But, not OK to be disagreeable
• Be open about your interests and shareholder
value
• Invest a lot of time and effort in thinking about and
understanding your stakeholder’s interests
• Don’t judge their interests. Identify them. Accept
them. Think about how you might be able to
support their interests and yours at the same time
• Stay open and engaged
33. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
3. Do Compliance AND be strategic
• Know the compliance requirements
• Know what you want to comply with AND WHY
• You don’t have to comply with everything
• Compliance is seductive.
• Checking boxes feels like accomplishment
• It’s easy to communicate
• Provides defensible cover if things go wrong
• Don’t let compliance be your ceiling
34. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
3. Do Compliance AND be strategic
• IFC has published a great guide to stakeholder
engagement
• Good Practice Guide for Companies Doing Business in
Emerging Markets- http://bit.ly/IFC-Stakeholder
• Lots of processes, lots of examples, lots of
additional resources
• Covers a lot of compliance focused material (and
some strategic and operational too)
35. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
4. Find partners
• Think about your stakeholder’s interests
• If they are met, who else’s interests get met too
• Share the credit – Stakeholder/CSR credit is funny
math. Everyone can claim credit without anyone
losing credit
• Remember, be creative
36. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Natural Partnerships
Unnatural Partners
• Education, health, environment, economic
development and livelihoods, environmental
management and gender equity
• Common stakeholder interests in frontier markets
• Who else shares these interests?
37. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
5. Communicate
so you are heard and understood
Applies to verbal, written, internet and everywhere
• No Socialwash (greenwash for CSR)
• Communicate value created, not just what the
company did
• Acknowledge what’s in it for the company
• Focus on issues, interests and stakeholders, not the
company
• Acknowledge concerns and shortcomings
• Keep it simple and straightforward COMPLEX
38. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
5. Communicate
so you are heard and understood
• Don’t be defensive. EVER
• You often are a local political football. Be a spectator.
• Share the credit, liberally. Don’t take a look at us,
we are wonderful approach
• Tell stories. Put facts into stories, don’t always let
facts tell the stories
• Think about timing – sometimes best to let results
speak without your help
• Be interesting BORING
39. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Communication touchpoints
• Who all is involved in the project?
• Who is benefiting from the CSR project?
• Why is that important for them?
• Why is it important for society?
• Who is helping us with it and what are they doing?
• What have we really achieved?
• How have we achieved it?
• Why is the company investing in it?
• What are the challenges and issues?
40. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Communication Case Study
Guinness Ghana Video
41. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Communication Assessment
• No Socialwash (greenwash for CSR)
• Communicate value created, not just what the company did
• Acknowledge what’s in it for the company
• Focus on issues, interests and stakeholders, not the company
• Acknowledge concerns and shortcomings
• Keep it simple and straightforward
• Don’t be defensive. EVER
• You often are a local political football. Be a spectator.
• Share the credit, liberally. Don’t take a look at us, we are wonderful approach
• Tell stories. Put facts into stories, don’t always let facts tell the stories
• Think about timing – sometimes best to let results speak without your help
• Be interesting
42. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Guinness Ghana
• Input cost pressure, Declining local currency made
imported inputs costly and risky
• Crowded and competitive marketplace (lots of
other beverage/alcohol producers)
• Reputational issues
• CSR outreach had been traditional (grants,
donations, small scale, ad-hoc)
43. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
0%
10%
20%
30%
40%
50%
60%
70%
F12 F13 F14 F15 F16 F17
PERCENTAGE INCREASE IN LOCAL CONTENT BY WEIGHT
2012 – 12% local content by weight
2014 – 38% local content by weight
44. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Guinness Ghana
Increasing local raw materials resulted in:
Reduce forex exposure / managing cost
Lower input costs (theoretically)
Provide value to communities
Provide differentiation in the marketplace
Provide connection with communities and consumers
Support national and community economies
Provide framework for further community investments
Overall brand and reputational capital value
46. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
6. Define stakeholders
broadly & strategically
• Go beyond compliance
• Sometimes national and international stakeholders
can benefit and bring value for you
• Think about groups and individuals whose interests
are affected. Positively or negatively
• Think about those who could be supportive and
helpful and how you can make it in their interests
to do so
47. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Beyond compliance saved the day
• Engaged before
it was required
• Engaged on
issues beyond
what was
required
• Identified and
worked with
strategic
influencers on
broad value
interests
48. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Industrial Products Case
• How can We Be Good use stakeholder engagement
to support its business development and marketing
strategy
49. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
50. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Six Best Practices
Applied to a complex case
• First major international mining company to enter post-
apartheid South Africa
• Retrenched 50% of workforce and didn’t follow
established ‘norm’
• Challenged in court by mining union
• Company publicly called ‘worst employer in South
Africa’
• Government, industry and other stakeholders standing
back
• Created progressive and very ambitious program to
support retrenched workers and families
• 70% of workers/families are economically active
This case is used as a consultation best practice by
Northern Ireland Ministerial Advisory Group http://bit.ly/1sfeJVy
51. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
1. Think Value and Interests
and do it transparently
• Interests of the company
• Interests of the retrenched workers
• Interests of the workers families
• Interests of the worker’s communities (migrant
labour force – 5 countries, scattered across
Southern Africa
52. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
2. It’s OK to disagree
• But, disagree without
being disagreeable.
And stay curious
• In court with Union
• Yet collaborating with
Union’s development
arm
Workers and unions resisted the retrenchment
53. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
3. Do compliance
but think and act strategic
• Met the legal requirements for retrenchment
• Didn’t make lump sum payment to the Union (the
‘norm’)
• Accepted responsibility to mitigate impact at family
level (huge innovation, raised the bar for industry)
• Set up elaborate data gathering and management
systems
• Ensured that management systems supported
objective of family level economic action
54. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
4. Share the credit, multiply the
resources. Find partners!
• CIDA partnership
• TEBA
• Mineworkers Development Agency (gave Union a
way back in)
• Other national, local, international partners
• Always, always, always acknowledged partners in
communications.
• Let partners lead much of the communications
55. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
5. Communicate so you are heard
and understood
• Communication strategy needs to be based on the
situation
• In this one it was show me, don’t tell me
• Created results first and then let partners lead the
communication
• Direct communication at the onset would have
created focal point for opposition
56. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
6. Define stakeholders broadly and
strategically – go beyond compliance
• Opened
retrenchement
benefits to women
and families
(recognized traditional
family as a
stakeholder)
• Brought in CIDA and
MDA
• Chokwe example
57. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
58. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
8 self-interested steps to a CSR plan
1. Admit that it is all about self-interest. What’s in it for
me?
2. Find out who else cares. Or should or could care.
Make a list.
3. What’s in it for them?
4. What are their biggest wants/needs?
5. Where does What’s in it for me? meet What’s in it for
them?
6. Group, arrange and re-arrange the stakeholder
interests
7. What’s in it for me? (Again!)
8. CSR and stakeholder engagement are about business
efficiency and value too!
59. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
CSR is about Self Interest
• Self-interest. What’s in it for me? This is the true heart
of CSR and stakeholder engagement. How could it be
otherwise?
• Why would companies, individuals, communities and
others not act in their own interest? CSR is simply about
finding ways to align those self-interests.
• CSR is about finding ways that you win by helping other
stakeholders to win too. It is about aligning interests so
that others win when you win. So that you win when
others win.
60. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
CSR is Self Interest
• Good work yes, Do-gooder no
• Business works with shareholder
resources and interests. Actions
MUST create value for
shareholders.
• It’s the law!
• It’s OK for company to benefit from
CSR (Mandatory even)
• It’s OK to feel good about doing
good (that’s a self-interest)
No
Do-gooders
61. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Identifying Stakeholders
Who else cares?
• Start by identifying who might win or lose if your
business or project is successful. Who is effected?
Who might be effected? Who could be effected?
• This step is critical. Don’t just limit yourself to the
obvious.
• When identifying stakeholders boldly go far beyond
where others stop.
• Your most perfect and influential ally might be
lurking way out there.
• Just because you identify them doesn’t mean will
engage with them
62. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
What’s in it for them?
• Go through your list asking “What’s in it for them?”
• Good or bad
• Make a list of how your success, or failure, would
affect the stakeholders on the list.
• Go back over the list again and push the
boundaries. Ask “What might be in it for them?
What could be in it for them?”
Be crazy, be creative.
• No idea is wrong at this point. Push the horizons.
The gem may lay on the far horizon and you’ll miss
it and leave a lot of value on the table if you don’t
push.
63. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
What are their biggest wants/needs?
• Go through your list again and try to make a list of
the biggest wants and needs of each stakeholder.
• Don’t confine yourself to whether or not the want
or the need is related to your business.
Note: In the real world you would be interacting
with these stakeholders throughout this process.
64. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Where does What’s in it for me?
meet What’s in it for them?
Find the interest intersections
• Go through your list, stakeholder by stakeholder
and look to see where/if your interests meet theirs.
• Positively or negatively.
• Even tangentially.
• These meeting points are where value is created, or
destroyed
• Apply creativity, insight and anything else you can
think of to the interest intersections to find and
release value
65. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Organize, Analyze, Prioritize
• Of course, it had to get boring sometime!
• There is no magic here. Some of the stakeholders will
have the same or similar interests. Some will have
complimentary interests. Some will have opposing
interests.
• Sometimes two stakeholders may have common,
complimentary and opposing interests, all at the same
time.
• The point is that by analyzing stakeholder interests you
will get an understanding of the interest landscape as it
relates to your business.
• Remember, much of the success of CSR and stakeholder
engagement rests on efficient and effective alignment
of interests.
• The better you understand the interest landscape the
better your chances of success.
66. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
What’s in it for me (again)
• Look through the interest landscape you have
created
• See where there are natural intersections, positive
and negative
• What are the stakeholder interests that will be naturally
supported by the success of your venture?
• What are the stakeholder interests that, at first glance,
are harmed by your business?
• What are the stakeholder interests that, no matter how
hard or creatively you try, just have nothing to do with
your business?
• Set aside those interests that have nothing to do
with your business.
67. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
What’s in it for me (continued)
For those interests that are naturally supported
• Is there any way they can be supported more?
Better?
• Are there any natural partners?
For those interests that will be harmed
• Is there any way to mitigate or reduce the harm?
• What else could you do?
• Are there any partners?
68. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Extractive Sector Case Study
• Strategy to deal with stakeholders and issues and
secure robust social license for development and
operation of the mine
69. Best Practices
• Think Value and Interests –
and do it transparently
• It’s OK to disagree – but,
disagree without being
disagreeable. And stay
curious
• Do compliance but think and
act strategic – check the boxes
yes, but that is just the
foundation
• Share the credit, multiply the
resources. Find partners!
• Communicate so you are
heard and understood.
• Define stakeholders broadly
and strategically – go beyond
compliance
Self-interested steps
• Admit that it is all about self-
interest. What’s in it for me?
• Find out who else cares. Or
should or could care. Make
a list.
• What’s in it for them?
• What are their biggest
wants/needs?
• Where does What’s in it for
me? meet What’s in it for
them?
• Group, arrange and re-
arrange the stakeholder
interests
• What’s in it for me? (Again!)
70. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
Key Questions
1.Who are your key
stakeholders?
2.What are their main interests?
3.Which interests can you easily
support/address?
4.Which interests will likely be
opposed to your success?
5.Are there any potential
stakeholders that weren’t
specifically named in the case?
6.Are there any allies or
partners that you might be
able to work with?
7.If there are interests that
would likely be opposed to
your success how would you
deal with them?
• Would you have any natural allies?
8.What are the major areas
where your interests meet
those of your stakeholders
9.What do you plan to do
around those intersection
points?
• What is the value in that for you?
• What is the value in that for your
stakeholders?
71. London, UK – Oct 2014How to effectively engage stakeholders in frontier markets
And that’s all for today!
Overall Objective
• To be able to think smarter and ask smarter questions
In two intense days in a small group you have
• 20 hours of lectures, cases, group time
• 6 speakers/faculty with well over 125 years combined
experience in frontier markets
• 7 case studies / scenarios
• Engaged and worked with people from 9 different
countries with combined experience in over 75
countries
For (free!) follow-up support contact
Wayne Dunn
wayne@csrtraininginstitute.com
www.csrtraininginstitute.com