: 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.