What does stakeholder engagement mean to your organization? Is it proactive or reactionary communication? Is it something you are committed to or something you haven’t quite gotten around to or fail to see the value in? With the latter approach, it isn’t until organizations find themselves over their head in public scrutiny that a stakeholder engagement plan becomes front of mind. Information – and misinformation – spreads fast, and reputations can be severely damaged before corporations get around to investing time, money and resources to try to “fix” a problem that is already out of control.
The experience of Gap Inc., a large, well-known global retailer of clothes and accessories, is a good example of how one company ivolved its approach to stakeholder engagement.
In the mid-1990s, Gap was accused of outsourcing the manufacturing of its products to factories that operated with sub-par labour standards. According to an article by N.C. Smith, S. Ansett and L. Erez, entitled “How Gap Inc. Engaged with its Stakeholders”, published in the Summer 2011 edition of the MIT Sloan Management Review, Gap reacted by putting together “a team of internal auditors to verify that contractors were living by its code of conduct.” Ideally, this initiative would have been able to effectively monitor all outsourced factories and make sure that they were all operating within established labour relations standards and by the Gap code of conduct. However, without active engagement with stakeholders, this strategy proved highly ineffective for Gap.
According to the authors, “By the end of the Nineties, the protests and stakeholder opposition to Gap had escalated to TV documentaries being aired frequently accusing Gap of ignoring the problem of child labor in a subcontractor’s factory.”
It was at this stage that Gap executives decided to reevaluate their strategic stakeholder engagement approach, or lack of same.
Today, Gap follows a strategic stakeholder engagement plan that enables them to effectively communicate with stakeholders when issues arise. For example, in 2007 a new labour relations conflict arose in India. According to the MIT Sloan article, Gap reacted by communicating up front with trade unions and NGOs with the result that they and other stakeholders did not react negatively towards Gap (as they had previously done) because they participated in Gap’s decision-making and were pleased with how Gap handled the situation. This does not mean that Gap will never encounter another stakeholder issue; nonetheless, it shows that they are much more prepared to handle critical situations should they arise, and to engage and communicate with those stakeholder audiences.
An open and transparent stakeholder engagement plan is essential for any stakeholder-influenced organization aiming for sustainable growth, and stakeholder and Aboriginal engagement is one of Communica’s three core service pillars. Our team helps companies identify these types of external risks up front and assists with the creation of appropriate stakeholder engagement plans. Without proper planning and input, a stakeholder engagement issue can continue to escalate until a proper consultation plan is put into place and appropriate actions are taken to address the situation.
There are a number of steps to take when developing an engagement plan that include, but are not limited to:
Communica’s expertise is supporting our clients with these services, and providing a dedicated and experienced team of resources to help clients achieve their stakeholder engagement goals.
For more information about Communica and how we can help with the development of stakeholder and Aboriginal engagement plans, and with related corporate communication and stakeholder information management services, visit www.communica.ca.