Why It Matters to Know What People Think—and Why
- To maximize an organization’s impact, its leaders must discover what drives the behaviors and motivations of its stakeholders and then use that knowledge to design its strategies.
- After conducting a comprehensive review of its own stakeholders, the NGO Innovation for the Blind went from potentially being six months away from closing its doors to building up a year’s cash reserve.
- To get the most benefit from stakeholder engagement, leaders must not ignore criticism. Instead, they must set up feedback loops to ensure that stakeholder insights are used to drive strategies and processes.
When the QuadPara Association Western Cape, a nongovernmental organization (NGO) in Western Cape, South Africa, invested in a review of its members, its leaders were both intrigued and disconcerted with what they discovered. Their research showed that while QuadPara had been successfully engaging most members, around 25 percent were not engaging with the organization at all.
But once QuadPara’s leadership dug deeper into the data, that finding made more sense: Most of the individuals in this 25 percent were in the first years after their injuries. At this early stage, they were still coming to terms with their situations and finding it difficult to manage many aspects of their lives.
“For an organization that was dedicated to assisting quadriplegics and paraplegics to live their lives to their full potential, it was uncomfortable to discover that we could be serving newly injured members better,” says Anthony Ghillino, QuadPara’s general manager.
This realization prompted a shift in QuadPara’s strategy. The association began to stage more regular interventions with newly injured members, not only to make sure they were aware of the services available to them, but also to help them through the initial stages of their grief. “Early intervention is key,” says Ghillino, “because the evidence also showed that the sooner we got involved in someone’s life after an accident, the more likely they were to report that their lives had improved.”
Ghillino shared this lesson during a panel discussion at the recent launch of the John Madejski Centre for Reputation (JMCR) Africa at the Henley Business School Africa campus (JMCR Africa is the sister center to JMCR at Henley’s U.K. campus). Ghillino was joined on the panel by the leaders of two other South African NGOs. They included Stephné Botha, CEO of the Innovation for the Blind, based in Worcester; and Tarisai Mchuchu-MacMillan, executive director of the Mosaic Training Services and Healing Centre in Cape Town.
A startling number of NGOs and publicly traded companies still struggle to successfully integrate stakeholder insights into their strategies.
There is empirical evidence to support the fact that what stakeholders think—and how they behave—can play an instrumental part in an organization’s ability to achieve its goals. And yet, a startling number of organizations—both NGOs and publicly traded companies—still struggle to successfully integrate stakeholder insights into their strategies. Too often, organizations are disconnected from their key stakeholders, whether employees, customers, members, or partners.
Ghillino, Botha, and Mchuchu-MacMillan agreed that leaders who want to maximize their organizations’ societal impact must first truly understand what drives the behaviors and motivations of their stakeholders. Then, they must deliberately cultivate those relationships with that knowledge in mind. By sharing how their organizations accomplished this objective, the panelists hoped to offer insights to other leaders and institutions that want to do the same.
Connecting the Dots Between Data and Strategy
For organizations that get stakeholder engagement right, the rewards are plain to see. Take the for-profit company Unilever, for example. After the successful rollout of its global stakeholder engagement strategy—which involved its employees and consumers, as well as its entire supply chain—Unilever was able to increase the growth of its sustainable brands considerably. In 2017, these brands grew 46 percent faster than the rest of the business and delivered 70 percent of the company’s turnover growth (the rate at which the company sells its inventory). In 2018, the company’s sustainable brands grew 69 percent faster and delivered 75 percent of the company’s turnover growth.
Botha explained that the Innovation for the Blind adopted a similar approach. When Botha stepped in as its CEO in March 2019, the 140-year-old organization looked to be out of step with changing times. It needed to reverse its decline and find new avenues for growth. The first thing Botha did was embark on an ambitious turnaround strategy—including conducting a comprehensive review of its stakeholders throughout the community to provide the organization with objective feedback at a time when it was not clear what the way forward was.
“We needed to change, but we also needed the information to drive that change,” she says. The process, she added, helped the organization’s leaders not only think about the problems “we didn’t even know we had, but also focus on what was really important and what we were doing right.”
Using valuable stakeholder feedback, the organization went from potentially being six months away from closing its doors to building up a year’s cash reserve. Even better, it accomplished this goal in just a third of the time it had originally anticipated. Since then, it has expanded its services to offer vocational job-creation schemes in the town of Worcester where it is based.
Recognizing an Essential Interdependency
The Innovation for the Blind was able to apply this strategy effectively, but successfully managing multiple stakeholders, all while moving an organization forward, is far from the norm. Leaders don’t just need to understand the expectations and needs of many different stakeholders. They also need to categorize stakeholders into manageable groups—mostly from the organization’s perspective. But in doing so, too many ignore the essential interdependency between organizations and their stakeholders.
On some levels, it seems obvious that organizations and stakeholders rely on one another. As humans, we adapt our behaviors all the time based on the relationships we form with, and the feedback we receive from, other people. But as organizations of all types define their visions and strategies, their leaders often make assumptions about the impact of their actions without first checking with their stakeholders, all in the name of efficiency. They power ahead without ever confirming what their stakeholders actually need or want—then they are surprised when the wheels come off and their plans flounder or fail.
The panelists agreed that the leaders most likely to see their visions fulfilled are those who recognize this key idea: Their stakeholders are people first. If leaders understand what drives their stakeholders, they can strengthen the organization’s relationships in ways that are mutually rewarding. In very real terms, how stakeholders relate to an organization is dependent on how the organization relates to them.
When leaders embrace the spirit of such a bidirectional relationship, their stakeholder engagement will become more fluid. Most important, the organization will be more likely to fulfill its unique mission.
Creating the Conditions to Listen and Engage
But to get to this point, an organization’s leaders must first and foremost not be afraid to hear what their stakeholders might have to say, said Mchuchu-MacMillan. She pointed out that, as part of her work with Mosaic, she must successfully collaborate with other organizations, such as Rape Crisis Cape Town Trust, in order to expand and improve the services they can collectively offer to survivors of gender violence.
Stakeholders are people first. If leaders understand what drives their stakeholders, they can strengthen the organization’s relationships in ways that are mutually rewarding.
A core part of their success, explained Mchuchu-MacMillan, comes from not shying away from complications or criticism from their stakeholders. It’s not about avoiding problems and the difficult conversations, she emphasized, but about setting up the safe structures in which these difficulties can be discussed and addressed.
With this in mind, she works with the leaders of other organizations to create a feedback loop to ensure that stakeholder insights can be evaluated, refined, and modified. They can then use those insights to drive their strategies and processes.
Making Stakeholder Engagement the Norm
In an era of stakeholder capitalism, leaders are coming to the growing realization that this kind of bidirectional engagement with stakeholders must become the norm. Businesses cannot thrive at the cost of their employees and customers; nonprofits cannot fulfill their missions if they do not understand those whom they serve.
But the benefits of this kind of approach go far beyond the workplace. According to the World Bank, the building blocks of social sustainability are inclusive, just, and resilient societies where citizens have voices and where governments listen and respond.
This is why it’s essential that we teach the importance of stakeholder engagement and reciprocal relationships in our classrooms, so that our students will apply these lessons once they assume positions of leadership. Moreover, higher education institutions need to model this behavior themselves. At a time when so many alternate education providers are entering the market, schools can stay competitive by ensuring that they are meeting the true needs of their students, faculty, corporate partners, and communities.
In the end it boils down to a simple premise: If we have a reason to connect with someone or something, it makes sense to do so in ways that are genuine and based on mutual understanding. Only then can we create the deep, mutually beneficial relationships that might just help us build a more sustainable and healthier world.