If you need to constantly deliver change, you need a culture that will support it. A stakeholder engagement culture can set the stage for change.

That change is a constant feature of organizational life has moved from commonplace to cliché. We now accept it as ‘just the way things are’. Indeed, it is a sign of the times that somebody has had to invent the acronym VUCA: volatility, uncertainty, complexity, and ambiguity. And we now regularly apply it to describe the modern economic and commercial environment. So why are so very few organizations set up to deliver this constant change? 

Wikipedia suggests that common usage of the acronym VUCA began in the 1990s and derives from military vocabulary. It cites Stiehm, Judith Hicks, and Nicholas W. Townsend (2002), in The U.S. Army War College: Military Education in a Democracy. Temple University Press.

Take a look at our recent article, Top 10 Tips for How to Thrive in a VUCA Project Environment.

The answer lies, I believe, in the work of Karen Stephenson – a professor of corporate anthropology, and prolific consultant. Her ‘quantum theory of trust’ asserts that trust in organizations, and the social networks it creates, can be related directly to the organization’s ability to innovate and implement change. So, it seems to me that there is one change program that will enable all others: creating a culture of trust, and an infrastructure of resilient social networks.

Make Engaging Stakeholders Your Priority

The route to this is to ensure that, in everything your organization does, it makes engaging with stakeholders a priority. At the moment, we see ‘stakeholder management’ as a necessary component of project management and the management of change. It is a sub-discipline that we need to attend to alongside the other, more fundamental parts of the process of creating change. 

I think we need to change this around and put positive engagement with stakeholders front and center. We should stop trying to ‘manage’ stakeholders, and instead should start respecting them.  And we need to take this attitude and make this a systematic part of the way that we do business within our organizations. We need to create a ‘Stakeholder Engagement Culture’.

In this article, I will discuss:

• Why Create a Stakeholder Engagement Culture?
• The Characteristics of a Stakeholder Engagement Culture
• How to Create a Stakeholder Engagement Culture
• The Evolution of the Culture: a Stakeholder Engagement Maturity Model
• Conclusion and Learning More about a Stakeholder Engagement Culture

Why Create a Stakeholder Engagement Culture?

What will a stakeholder engagement culture give us? I suggest that if you can embed a positive focus on stakeholders throughout every activity, you will gain:

• Increased communication channels, which will hasten organizational learning, innovation, and change.
• Enhanced levels of stakeholder feedback that will inform long-term decision-making.
• A greater focus on ethical practices that will raise the social capital value of your organization.
• A drive to produce and evolve processes and systems to make results more predictable and easier to achieve.
• A shared language and methodologies to call upon, and levels of training and experience that will be valuable career assets for your staff.
• Reduced resistance to change, arising from a deeper understanding of pressures on your organization and a greater sense of being in control, among staff.
• And, as stakeholder engagement becomes a core skill, more of your staff will become excellent practitioners.

The Characteristics of a Stakeholder Engagement Culture

So, what would a stakeholder engagement culture look like?

The details of a stakeholder engagement culture will look different in each organization. This is so, because it will need to mesh into an existing culture, will attend to different organizational priorities, and will engage its own distinct ecosystem of stakeholders. However, some characteristics are generic. Let’s look at how it will integrate with other areas of your culture.

Customer or Client Service

Almost certainly, a stakeholder-focused culture will place customers and clients at the forefront of your stakeholders. So, how does this differ from a service-led culture? The answer lies in two words: context and balance. 

The ‘customer is always right culture’ that infuses many organizations can lead to resentment from staff.  The most effective client or customer-facing organizations place customer service very clearly in the context of respect. We serve our customers because we want to and because it makes us feel good about ourselves. 

These organizations place staff equally at the heart of their business, alongside their customers. And this balance gives staff the desire to justify the choice. A stakeholder-led approach creates a real balance among stakeholders whereby staff members cherish customers because the organization cherishes all stakeholders.

Product or Service Development

Many fine companies begin their new product or new service development process by listening to ‘the voice of the customer’ placing clients’ needs, and the problems they throw up, at the start of the cycle.  Increasing the range of stakeholders who we engage in these early conversations can result in greater innovation and pre-empt problems later in the development process. 

A stakeholder engagement culture creates a commitment to tap into the:

• voice of the customer service team,
• manufacturing operation, the sales force,
• merchants,
• distribution and logistics contractors, and
• supply organizations.

When you do this, you can create a more balanced design process. This delivers what customers want and need, but in a way that is more sustainable for the organization.

Management and Leadership

Leadership at all levels will put a conspicuous emphasis on stakeholder engagement, prioritizing it when allocating time in their schedule, and making it an important part of their team management.  I could argue that leadership is entirely about engaging with stakeholders. Certainly, this agenda certainly places a new emphasis on the role of leaders. 

Leaders must create a VUCA response to a VUCA environment.  In this case, the italicized VUCA response is one of vision, understanding, clarity, and agility. It is described in ‘It’s A VUCA World!’ by Denise Caron – a Slideshare presentation, originally given to a CIPS CIO breakfast on 5 March, 2009.

Leaders must engage stakeholders fully, if they are to make this work, I described this in my article, Stakeholder Leadership: Leading Bystanders as well as Followers.

Policies and Procedures

A strong culture does not arise from policies and procedures. But these are very distinctly a feature of that culture, creating consistency and identifying how engagement is managed and monitored at all levels, right up to the board, trustee, or political levels. Policies make engagement part of corporate governance and as such provide a powerful protection against ethical and reputational risks.

Competencies and Capabilities

Culture cannot be taken for granted – especially as many organizations are being continually refreshed by in and out-flows of staff. 

Karen Stephenson argues that high levels of trust within an organization will reduce staff turnover rates. But we also need to supplement an initial cadre of trained and skilled practitioners with core training packages for large portions of the staff group. And we need to lock competencies into formal job descriptions and career progression frameworks. Continual sharing of lessons learned can further embed the culture, whilst building practical skills and situational sensing capabilities.

Incentives and Performance Review

Extrinsic motivators like rewards and punishments are weak ways to build a culture. But, they do need to exist to strengthen the culture. ‘What gets measured gets managed’. So, systems need to be in place to review stakeholder engagement performance and intelligent incentives need to drive choices that make stakeholder engagement a part of everyone’s work.

Stakeholder Engagement Processes and Tools

The whole culture needs to be underpinned by a reliable set of processes and tools, with:

• supporting infrastructure
• access to documentation
• informal guidance, and
• support from experienced colleagues

In particular, tools need to exist that will help leaders identify the people who form critical nodes in the network of stakeholder relationships:

• the hubs who are central to their own networks,
• the connectors, who have links into two or more, largely separate, networks, and
• the feeders, whose ideas and insights prove highly influential among the people they are connected to.

How to Create a Stakeholder Engagement Culture

Getting to this ideal is a journey, and I suggest a six-step process^[3].

Step 1: Foundations

Test the case for a stakeholder engagement culture in your business.  Examine the evidence base for what is already being done. Then find good and bad practice benchmark comparisons in similar sectors.  From this, build a business case that addresses costs as well as benefits.

Step 2: Alignment

If you do not engage more than three-quarters of your senior leadership at Board (executives and non-executives) and second-tier levels, your initiative will be destined to fail. 

Use your business case, and tailor it to the needs of these stakeholders.  Yes, practice what you are preaching and deliver great stakeholder engagement in your campaign to promote a stakeholder engagement culture. You must settle for nothing less than conspicuous support, a highly prominent sponsor, and the allocation of sufficient funding and resources.

Step 3: Definition

Now you have support and resources, you can start defining exactly what the term ‘stakeholder engagement culture’ means in your organization. Once you have this, you can begin to develop the processes and tools that will support it.

Avoid the temptation to specify too many tools at the start. Pick a small number that will be highly relevant to your context and focus on these.

Step 4: Engagement

Now engage management at all levels; and staff too. You will need an enthusiastic cross-section of levels, skills, and specialisms to pilot your processes. 

Here too, when enrolling your early supporters, you can practice the engagement processes you have developed:

• Provide briefings and training
• Encourage ideas and contributions and, if possible
• Arrange visits to one or two reference organizations from which team members can learn by observation and discussion with experienced practitioners
• Involve your early adopters in planning, developing, and testing tools
• Make excellent communication among this group, and from this group to the rest of the organization, an early imperative

Step 5: Capability Building

Now it is time to take your tools and techniques out for a test drive. Carefully select opportunities to demonstrate the value of the process and hone skills. Then communicate successes widely.

From each opportunity, you should be able to enroll new supporters, whom you can develop further with training. Now is your chance to start formalizing your training materials into an established program, with polished content and case studies.

Step 6: Evaluation

Recognize and celebrate the successes you are having. Use both successes and setbacks as the basis for learning and honing your approaches. Particularly focus on examples of excellence to learn from.

Now take what you have learned and re-engage, by returning to Step 4. Evaluate pilot processes and tools, and develop them further. You can also test out your briefing and training materials. Keep cycling around Steps 4 to 6:

• Grow the initiative each time
• Build towards the critical mass that will create a culture shift
• Prove the value at each step along the way. 

At the same time, continue to scan your business, political, and competitive environments for changes that will have an impact on the tools and techniques you need to develop and use. 

The Evolution of the Culture: a Stakeholder Engagement Maturity Model

Software development, project management, and risk management all have maturity models. They set criteria to allow organizations to measure the level of institutionalization of good practices. It is time Stakeholder Engagement Management also had a maturity model too. So, here is a proposal for a basic model. 

Practitioners may find it helpful to start by assessing where your organization sits now, and what level would be a suitable aspiration for one-, three-, and five-year programs.

Stakeholder Engagement Management Maturity Levels

Conclusion

Change relies on people. And, in a culture where change is constant, we need to do better than ad hoc engagement or, worse still, trying to manage our stakeholders from initiative to initiative. 

A more sustainable, more ethical, and, ultimately, more effective approach is to recognize the overwhelming need to bring stakeholders along with us on the never-ending journey that organizations are embarked upon. 

For this to work, inconsistent application of half-understood techniques by a variety of different project managers and change leaders with varying attitudes toward their stakeholders is not sufficient. Organizations need to recognize the need to embed proactive and respectful stakeholder engagement into everything they do. And they need to make that priority a reality, by building a stakeholder engagement culture.

What part will you play in that?

Learn More about Creating a Stakeholder Engagement Culture

This article is an expanded extract from The Influence Agenda: A Systematic Approach to Aligning Stakeholders in Times of Change, by Dr Mike Clayton (Palgrave Macmillan, 2014).  In particular, the seven characteristics, six steps, and five-level maturity model are taken from Chapter 9.