Closing the engagement gap Closing the engagement gap
Leveraging the outside-in edge for people, planet and profit
The traditional view of value being driven by closed doors and inside thinking still holds strong. While there are some notable exceptions, business success is still viewed as competitive advantage. However, in recent years we are beginning to see this view increasingly challenged.
As Paul Skinner suggests in his new book Collaborative Advantage, “the most value is created in the spaces between us.” At the centre of this lies the understanding that creating value with—rather than for—customers and society will bring great returns for all players. Nowhere is that likely to prove truer than in business and societies’ responses to some of the intractable global challenges we are all facing.
The Engagement Gap
This is already being recognised and leveraged by businesses. Although not all are fully embracing triple bottom line thinking, many businesses are now realising how much the societies and natural environments within which businesses operate are value drivers in their own right. With this, sustainability leadership is picking up pace. Yet, while many rush to create solutions, stakeholder engagement is not moving at the same speed resulting in an ‘engagement gap’ in most businesses.
We still see engagement mostly treated as a transactional exercise. Businesses may engage their diverse stakeholders, but only in cycles or in response to specific events. This is most often in relatively shallow and sometimes one-directional ways. By taking this approach they are missing out on the enormous opportunities and risk management stakeholder engagement can bring. As Connect: How Companies Succeed by Engaging Radically with Society highlights, up to 30% of corporate earnings are at stake in a company’s relationship with external stakeholders.
When stakeholders become partners through intentional and authentic engagement, businesses are finding that they can provide a wealth of insights into how to do business better—in every sense of the word. From long-term risk management to ground-up innovations, the benefits are tangible and differentiating for those who get it right. When Mars launched its $1bn-backed Sustainable in a Generation plan last year they kicked off the process with a series of value-chain crossing stakeholder engagement workshops to bring together supply chain actors, NGOs, governments and even competitors. By engaging the people who will be the levers to achieving their ambitious goals, Mars was able to understand the realities, risks and opportunities they face in everything from soil depletion to blockchain-driven transparency. Especially in the highly sensitive cocoa and coffee markets that are predicted to be early victims of climate change, finding new ways of securing long-term value transcends the boundaries of ‘CSR’ and is genuinely business critical. Bringing the outside-in by building an authentic relationship with stakeholders can reveal risks and unlock opportunities that have traditionally been hidden in plain sight. It will inspire strategies to build stronger foundations.
We are reminded of Paul Hawken’s metaphor in The Ecology of Commerce of business and the environment being synonymous and symbiotic. Like a tree in a forest, business operates as part of an ecosystem, in a give and take relationship with everything around it. If a tree has a singular focus on growth to the exclusion of everything else, it will grow strong at first but wither in the long-term as it ignores all of the services provided by its environment. Long-term success can be won by realising that both are part of complex value chains and build value and resilience through their interactions and relationships. In this context the importance of re-tooling an organisation to be able to engage and work in step with external stakeholders as one part of these systems is paramount. The benefits to doing so are increasingly recognised, especially as the link between business and increasingly complex global challenges is made clearer. Because of this we are seeing a fundamental rethink from some when it comes to the purpose, type and depth of stakeholder engagement they pursue. Each example varies from business to business, but one core theme emerges: they have a clear intent to drive change (and in turn value) against specific objectives.
The Outside-In Edge: Directions Forum 2018
Embracing this shift to a more intentional process of stakeholder engagement is something we have been encouraging our partners to do for many years now. There is no doubt that it involves a mindset shift as much as a process shift, and the development of new skills and disciplines that need to be fostered for successful relationship building is essential. But the opportunities and rewards are obvious. Businesses who can work and learn together, building on each other’s strengths, will be stronger in the long run.
It is for this reason that our annual Directions forum has taken 'The Outside-In Edge' as its theme for this year. With speakers from organisations such as H&M, Signify, Scania, Philips, DSM and the Sustainable Apparel Coalition, we’re bringing together a mix of businesses, NGOs and experts to share their stories on how we can begin unlocking the benefits of stakeholder engagement. Hosted in Amsterdam’s Impact Hub on the 17th October, a space dedicated to fostering entrepreneurship and idea incubation, we’ve crafted a day to help inspire new ways of growing collaboratively and creating shared value.
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