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Lessons from Dell’s Stakeholder Engagement Model

3p Contributor | Monday December 20th, 2010 | 0 Comments

Vijay Kanal, CMC, Kanal Consulting

Few companies have advanced their stakeholder engagement on sustainability as quickly and effectively as Dell. The company (like some other leading sustainability ones) realized long ago that engaging with stakeholders is not a necessary evil, but in fact adds enormous value to their sustainability efforts. Based on my almost 90 minute conversation with Mark Newton, Dell’s Director of Sustainable Business, on their external stakeholder engagement model, this article is a summary of a few best practices that Dell has adopted, which I think all stakeholders should consider. For the complete interview, please visit our website.

  • Diversity of Perspectives Dell values the diversity of perspectives that comes from bringing many different stakeholders to the table, especially now that the issues are getting tougher. In addition to the usual groups like suppliers, NGOs and industry consortiums, Dell has benefited enormously from the perspectives of peers and competitors, government agencies, investment groups, academics, faith-based groups, and customers. The company has found that about 10 – 12 different organizations is the optimum number of participating stakeholders on any particular issue. Beyond that, some stakeholders feel their opinions are not being heard or considered.
  • Stakeholder as Organizer Some stakeholders also provide a valuable service to convene and facilitate discussions with other stakeholders because this helps to build trust and credibility.  Dell leans heavily on Ceres for instance, to help select and bring together diverse stakeholders, agree on the objectives, facilitate discussion, and most important, conduct follow-ups. By delegating Ceres – which is highly respected in the investment community – other stakeholders gain confidence that their issues will be heard, and are more willing to participate in a collaborative atmosphere. Dell also cited BSR as another organization that serves in this role.
  • Dealing with Vocal Critics Like most companies in the spotlight, Dell has had its share of very vocal critics who do not hesitate to make their opinions known in a very public way. Dell’s approach is to deal with them very respectfully and engage in dialog, even if at the end, both parties agree to disagree, or in some cases even disagree about disagreeing. Newton points out that usually the disagreement is not about the end goals, but how to get there, or the pace of change. But by engaging with them rather than ignoring them and hoping they’ll go away, Dell strives to find other areas of common ground where they can (and do in fact) collaborate.
  • Consider the social aspects There can be some unintended social consequences from doing good for the environment. Dell points to their early efforts in computer recycling in 2002 that used prison labor for equipment dismantling. Unbeknownst to them, there were some safety and labor concerns due to inadequate transparency into the prison labor system, which were rather dramatically pointed out by some NGOs at a shareholder meeting. (As a result, Dell found other partners for their recycling programs, and has subsequently developed strong partnerships with the very same NGOs.)
  • Dell as Contributors When working with its stakeholder group, Dell doesn’t just say, “Hey we need help here. Can you come work with us on this issue?” They also serve as contributors to industry consortiums and other stakeholder groups where they are providing their expertise on a particular issue. They recognize that stakeholder engagement is a give-and-take relationship, and they want to give something back to the folks who are lending their expertise and perspectives.
  • It’s a journey not a destination Dell considers its engagement with stakeholders a relationship, not transactional, and which evolves with the issues. And it has found that as the relationship builds and deepens with time, there is a greater level of trust and accountability occurring on both sides, for mutual benefit.

As some of these best practices from Dell show, it is possible to have a collaborative and effective relationship with a number of different external stakeholders. (I’ll address the topic of stakeholder engagement among employees in another post.)

What’s Next for Dell

Going forward, Dell believes that one of the key areas they’ll be working on with the investment community is a standardized way to measure the materiality of their sustainability initiatives. This is an area that is getting more attention and lacking a methodology and guidance from the SEC and others.

Click Here to hear the rest of the interview with Mark Newton.

Vijay Kanal, CMC, is Founder and Chief Consultant at Kanal Consulting, a strategy and marketing firm that conducts assignments worldwide to help companies grow profitably and sustainably. He is also a frequent author and speaker on sustainability. He can be reached at vijay@kanalconsulting.com


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