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.

1 Comments:

  • 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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