When Michael Porter, the renowned authority on business strategy and competitiveness, introduced the world to the concept of “creating shared value” earlier this year, he provided little in the way of innovation for most sustainability practitioners. While CSV is essentially an elegant repackaging of sustainability principles, the article is noteworthy not only because it was authored by one of the preeminent minds in business, but also because its prescriptions for achieving shared value require consistent deftness at stakeholder engagement.
This makes logical sense – other players are imperative if value is to be shared. But it also emphasizes the importance of approaching stakeholder engagement as an extension of systems thinking. Every institution that survives does so because of the resiliency of the system in which it operates. Resiliency comes from the diversity of individuals or organizations and the strength of the connections between them. Stakeholder engagement is an opportunity to build and fortify these relationships as well as tap the collective brain trust of the system, but in Porter’s words, it will require “leaders and managers to develop a deeper appreciation of societal needs and an ability to collaborate across profit/nonprofit boundaries.”
In a world of ubiquitous transparency, the buy-in of customers, suppliers, employees, and every other institutional partner is crucial to success. Stakeholder engagement has long been regarded as good defense, but it is even better offense and should be at the heart of any strategy to innovate. Companies need to understand and work with the communities that comprise the competitive landscape-- their profits rely on it. However, there is even greater opportunity for innovation when a company seeks to not only engage stakeholders, but also collaborate with them.
In the executive education programs at Presidio Graduate School, we stress the importance of stakeholders as people to engage, but also as co-designers of student initiatives. In order to do this, students first map out the system in which they are operating. From this map, they identify and prioritize stakeholders and consider the best ways to approach and collaborate with them. We encourage students not to become too attached to a solution until they have a solid understanding of their stakeholder’s needs and ideas. The solutions derived from this co-design process drive the metrics for each project. This is a more strategic and efficient approach to choosing what to measure – if it matters to stakeholders, it is worth tracking.
Collaborating with stakeholders requires a different mindset; one that is best described as leadership rather than management. It warrants offering more questions than answers. It entails more listening than speaking. It involves creating the space for people to understand the wholeness of the problem, feel safe to share ideas, take ownership of the initiatives and solutions that they agree to, and hold themselves accountable for creating results. This is an initial list – what other qualities will the stakeholder collaborators of the future require?
Carl Schneebeck is the director of the executive education program and an adjunct professor of communication and management at Presidio Graduate School.