Holmes Report Blog

The Holmes Report blog focuses on news and issues of interest to public relations professionals. Our main site can be found at www.holmesreport.com.

Monday, February 06, 2006

Engaged: Steven Silvers notes Wal-Mart’s search for something called a “director of stakeholder engagement” and his first reaction is the same as mine, which is that this is just a fancy name for a PR person. If the company’s PR people aren’t engaging stakeholders, what exactly are they doing? (My second thought was that I should e-mail the FT’s Lucy Kellaway, whose column this morning deals with “creative” job titles: “livability theme manager,” anyone?

But Steve goes on to make an interesting point: “It's pure posturing to the CSR crowd, for example, to use the term ‘stakeholders’ when referring to all of the ‘non profits, non-governmental organizations, academics and government agencies’ that Wal-Mart's new director must engage. Sure, these are all critical relationships and influences to successfully building a brand and revenues.

“But these people don't have a ‘stake’ in Wal-Mart—not in the way that investors want increasing valuations, or in the way that a working mom wants her paycheck to buy as many corn flakes and school supplies as possible. Nonetheless, Wal-Mart will now label anyone with a potentially leveragable interest in the company's practices a ‘stakeholder’—not because they are, but because they want to be thought of as such.”

I posted my response at his site, but this is worth discussing: if someone believes they have a stake in your business, you’d better treat them like a stakeholder. Companies don’t get to decide who their stakeholders are—or whether those stakeholders are legitimate. If someone can impact your ability to do business—by withdrawing their labor or their custom, or by persuading others to do so, or by lobbying for regulatory change or community action—then you need to have a strategy for engaging with them.

As Steve indicates, there is a hierarchy of stakeholders. Shareholders, employees and customers are going the most important stakeholders in any enterprise, with legislators and regulators not far behind. In many cases, activists and academics will be a long way down the list.

Moreover, it’s important to remember that engagement does not mean appeasement. Not all stakeholders are interested in dialogue, compromise, or win-win solutions. Some of them may be out to destroy you or to undermine your business model. You don’t have to make nice with these people—there’s nothing one with confrontation—but you can’t ignore them.

3 Comments:

  • At 9:14 PM, Blogger lgr said…

    The BusinessWeek article also mentioned that they were looking for an "out of the box" thinker for this position which I liked. I am hoping someone has a new idea for helping Wal-Mart think creatively about who to communicate with and how to do it. Since everyone is watching them so closely, now is the time to change the stakeholder paradigm and surprise us all. lgr

     
  • At 9:52 PM, Blogger davidmaister said…

    This is a huge topic and one that is going to be relevant not only to corporations but also to their professional service firm providers. More and more reporters are covering the CSR programs of law firms, accounting firms, and, yes, even PR firms.

    Th last thing I am is a PR expert, but it seems to me that once the media starts asking firms to report regularly on
    their CSR programs, it may be too late to debate whether or not you should have such a program and what its character should be. The social pressure (or blackmail, depending upon your point of view) is nigh irresistible.

    A critical dilemma in CSR initiatives is that in choosing on which issues to engage, there rarely is a clear, non-controversial position to take.

    Consider for example the topic of gender and racial bias. Equality between genders and races can best be accomplished, according to different constituencies, either by treating all people as individuals and not as a member of a group (the meritocratic argument) or by putting in place programs to use their group membership to overcome social or historical disadvantages (the affirmative action argument.) To suggest that the firm will make only friends and no enemies by taking either of these positions would be foolish.

    For everyone who thinks supporting the arts is an appropriate form of CSR, there are those who question the class-based bias of supporting elite activities that cannot pay their own way, while neglecting the activities that underprivileged people enjoy.

    My point is not to argue either side of any of these illustrations, but to point out the obvious: there are at least two (and probably two thousand) sides to every case, and the risk of turning audience segments away is as likely as turning them on.

    Because of these perspectives, some firms (including PR firms) may attempt to develop a program of CSR activity is, and must be, of the “let’s stay out of trouble” kind. These programs, which are not based on strongly help causes or inherent values of the firm, are adopted to adapt (or be seen to be adapting) to social shifts.

    Obviously, any CSR program based on “stay out of trouble” will be risky. No business entity will ever be protected against charges that it is being biased, particularly as those who participate in debates about CSR cannot always be relied upon to engage in reasoned, logical discourse. Token policies will provide no shield to a determined social group that wants to impugn the motives of a business entity (or anyone else.)

    How well are we in the professions themselves ready to withstand the attention when WE are asked to care about our "stakeholders?"

     
  • At 3:54 PM, Anonymous Anonymous said…

    Speaking from a UK perspective, the 'stakeholder engagement' philosophy has widespread acceptance here. However it is not just seen as being something done by the 'CSR crowd'. Rather many of us involved in developing and delivering stakeholder engagement programmes come from and work within a public affairs or corporate communications environment.

    I fully concur with Paul's comments that it is not necessarily the company who decides who their stakeholders are. As any company who has had to deal with shareholder activists will fully understand.

    It seems to me that any credible organisation is going to be engaging with its stakeholders, the debate therefore is about how you decide who they are; agree on how to segment them into useful categories; work out how and what you want to say to them; and then prioritise your interactions with the various groups. It is not about having different messages for the different groups, it is about ensuring that you recognise what the interests and concerns are for your stakeholders and ensuring that your messaging responds and reflects their issues.

    I would argue that this is not about CSR, it is about ensuring that your corporate communications really communicates in a way that is understood by those various groups who need to hear it.

    Jon Sacker

     

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