All in Stakeholder Relations

I was delighted to discover today that McKinsey & Company agrees with me about the reputation challenges facing companies globally and the new approaches needed to meet those challenges.

Okay, maybe I am not given credit anywhere in the McKinsey Quarterly article called Rebuilding corporate reputations (registration required). Yes, I know others have been saying the same thing for a number of years. And native humility prevents me from claiming anything more about my contribution to these discussions among public affairs specialists. But it was satisfying nonetheless to read that the consultants in McKinsey & Company's strategy practice ALSO agree there are three changes profoundly altering the reputation management landscape:

"Those changes include the growing importance of Web-based participatory media, the increasing significance of non-governmental organizations (NGOs) and other third parties, and declining trust in advertising."

Add to this the recognition in the report that traditional media relations strategies alone are simply inadequate to deal with dispersed opinion shaping never mind stakeholder expectations for participation, dialogue and transparency, and you have the skeleton of most of what many of us who advise companies on reputation management have been clamoring about for a number of years.

Perhaps now that McKinsey & Company has said it senior executives will be more disposed to our strategies.

Reputation risk for companies is an underestimated consequence of global concern about climate change. Rather than expending more inventive energy on denying a relationship between CO2 concentrations and global temperature, smart businesses should be looking for ways to gain come reputation capital by managing climate change risks in cooperation with communities and global agencies.

Last week, the UN Global Compact and the Pacific Institute released a short paper on climate change and its impact on water which recommends a number of sensible management strategies. The context for the paper is the statement that:

"There is overwhelming scientific evidence that burning fossil fuels has altered the chemistry of the atmosphere. Figure 1 shows that atmospheric CO2 concentrations are reaching levels that are likely higher than in the last 20 million years.Rising CO2 concentrations along with other greenhouse gases (GHG) are changing the planet’s climate. Global mean temperatures have increased three-quarters of a degree Celsius since 1900 and 11 of the 12 warmest years since 1850 have occurred since 1996.These climatic changes are expected to accelerate over the coming decades."

The paper argues that a significant body of scientific evidence suggests climate change will affect the scarcity, sustainability and quality of the global water supply, which increases business risk, especially with respect to energy supply management, raw material inventories, industrial production systems and the associated financing costs.

Reputation risks can easily follow, for example as "people become more aware of their rights to access water . . . local businesses may find themselves using copious amounts of water in regions where people lack sufficient water to meet basic needs."

The paper outlines some business strategies which mirror two dominant themes on how businesses today need to think of corporate responsibility (CR): CR as part of business strategy discussions (integrating "water and climate change into strategic business planning and operational activities") and engagement of stakeholders in responsible planning (engaging "key stakeholders as a part of water and climate risk assessment, long-term planning and implementation activities").

Philip Sheppard, a past president of the International Public Relations Association, brought to my attention this exhilarating and numbing video called Did You KNow? posted on the Pilot Theatre (from Wakefield West Yorkshire) website . . . Lots to make you think about business, communications, knowledge management and North American education (strengths and failures).

Contemporary stakeholder theory holds that organizations should think differently about stakeholder communication programs. But in the lexicon of some organizations, such programs still mean the transmission of information in order to persuade a person or group to accept an organization's preferred outcome.

But if you accept the simplest definition of stakeholder as a person or group with a vested interest in a certain resource or organizational activity, then the fallacy in this approach should be self-evident and, it is fair to say, has become so over the last few years. However, there is a lot of thrashing around about what it means to design and implement these new stakeholder programs.

There are a couple of ideas I think should be explored each time a company or organization chooses -- or is forced -- to engage in a stakeholder communications program:

  1. Understand that dialogue actually means "the art of thinking together in relationship", according to William Isaacs author of Dialogue and the Art of Thinking Together and a senior lecturer at MIT. ("Dialogue is a conversation in which people think together in relationship.  Thinking together implies that you no longer take your own position as final.  You relax your grip on certainty and listen to the possibilities that result simply from being in a relationship with others – possibilities that might not otherwise have occurred. " It doesn't mean talking at someone until they are persuaded of your viewpoint. If you want a summary of what Isaacs is talking about see Chris Corrigan's comments, or buy Isaacs' book.
  2. Consider what Ann Svendsen and Myriam Laberge call the "co-creative approach to stakeholder engagement". Their theory goes something like this: "In contrast to the traditional approach, where an organization is at the centre or hub of a number of bilateral relationships, in a co-creative process, a network or web of organizations and individuals comes together voluntarily to address a shared issue, problem or opportunity." Make your engagement process inclusive, collaborative, and open so you are building social capital rather than drawing it down.

Even if it's too much of a stretch to see organizations surrendering the compulsion to build programs only to persuade, at least they should be thinking about how to integrate a little dialogue or co-creativity into the program framework . . . if only for the practice.

Thanks to a colleague with a personal blog here (really good, especially if you like indie music), I took a look at a CBC report of a blogging campaign targeted at pushing the song of an independent band to the top of the iTunes charts, bypassing the major record labels. The campaign -- called Bum Rush the Charts -- asks people to purchase a copy of the song Mine Again, by the alt-rock band Black Lab, at the iTunes Store on March 22nd.

Says podcaster Mark Yoshimoto Nemcoff, the campaign organizer, "Taking an artist like Black Lab and making them No. 1 on the [iTunes] charts would be making a statement. It would be like giving the music industry the finger.”  On Nemcoff's blog (here), he describes the motivation behind the campaign as creating a social movement: "Podcasting gets little respect from traditional media. To them we're little more than a joke, than amateurs. What they don't understand is that podcasting is more than just a delivery mechanism - it's a social movement."

Since I'm personally (let me tell you about my background sometime) and professionally (our clients can sometimes be the benefactors or objects of these campaigns) fascinated with the potential of such social movements finding a home online, I will be watching to see how viral this becomes. Stay tuned.