Disregard your stakeholders at your peril
Without stakeholders a business doesn’t have a Social Licence to Operate (SLO). They are the ones who can build or breakdown a business based on how they perceive it to meet their values.
To be a stakeholder in the context of SLO means someone who is indirectly or directly affected by your business. This can be an extensive list for some businesses, with not all created equal. Those on the fringe often lack consideration, empathy, understanding or engagement at all. Stakeholder engagement is what fills your ‘Trust Wallet’. It’s what you draw from when there is an issue that needs to be solved. If there’s no trust there, your SLO can slip away before you’ve had a chance to engage. Reputations are hard to build and quick to be lost. We can all be tripped up by the passivity of our extended stakeholders and focus on the readily available and agreeable ones. The problem is, when there is an issue you don’t have a relationship to build solutions from. Having a business that will be around for the long-term requires a certain level of humility. The people at the helm need to understand “it takes a village”, and they’re a mere blimp (hopefully) in what is a long and successful business journey. Co-existing with stakeholders harmoniously and being inclusive of them ensures the business is able to adapt to stakeholders changing values over time. The challenge is to find empathy with all stakeholders. If we think of them as family members, we can move to a more inclusive and empathetic approach. An example would be; Stakeholder family tree
Immediate family = shareholders and staff e.g. siblings and parents
First cousins = customers, suppliers and the community
Second cousins = staff and supplier’s families
We are more willing to include family members, than perceived random members of society. This way, you can not only start to better understand the wide breadth of impact you have in a more empathetic way, but also improve the level of accountability you have. By bringing second and third tier stakeholders, such as your cousins and second cousins, into the fold they’ll, at most, be some of your strongest advocates and at least, not a disrupter. Finding out what matters and affects them not only shows you care, but you have an opportunity to fix it before it becomes a bigger issue. Don’t just barge in and take control though. Give them the control and ownership on what matters to them - they will create far more enduring solutions for your SLO. Disregard your family at your peril. Everyone likes to feel listened to, respected and considered. If stakeholders are not made a genuine part of the process from the beginning, a business can end up wasting a lot of time and money. Don’t assume your stakeholders think and feel the same as you. Acting on behalf of a community without consultation, shows a complete lack of respect and consideration for those who can make or break your business. The world is moving and changing too fast for you not to have your finger on the pulse. If you can empower stakeholders to provide the solutions, you can take your stakeholders from a level of acceptance, to feeling like they own (psycholigical identification) your business. Boutilier and Thomson (2011) explain how the social licence concept aims for universality in building relationships, by using the qualities universal in human societies. Translation? Have empathy and treat your stakeholders with respect. Be a ‘good human’.