First, recognize that you’re not starting from zero. You already have relationships with stakeholders. Many companies can benefit from taking an appreciative approach to identifying what they are already doing well. From there you can measure the gap between the current state and the desired future state of each relationship.
Second, accept that movement toward a stakeholder centric model represents both cultural and operational change and will take time. This movement will take a combination of both “soft” skills and “hard skills.” An effective change initiative will address individuals and teams, structures, behaviors and beliefs.
Third, get rid of the notion that this is just corporate social responsibility or good PR. It’s actually a different approach to business altogether. It means inviting stakeholders into the value creation process of your company.
While every company’s situation will differ, there are eight basic steps to implementing a stakeholder approach to a business:
- Determine the strategic context: What are you trying to accomplish? Are you formulating business strategy or functional strategy? Are you seeking the overall competitive advantage of the firm or are you working in service of a specific business unit, service or product’s performance?
- Prioritize stakeholder influences in this strategic context: Evaluate stakeholders using the criteria of power, legitimacy, urgency, interdependence, cooperation, and conflict. Consider all the stakeholders in your value chain. Note that research shows that investing in employees make the most significant contribution to overall financial performance. This is likely a good place to start.
- Assess stakeholder interests and satisfaction: Many executives think they know what stakeholders want, but it’s rare when they actually do. Assessing stakeholder interests and the current state of their satisfaction can take many forms: discussion, surveys, group processes. What’s important is to make this determination based on data.
- Harmonize stakeholder interests: Compare the interests of all key stakeholders to identify areas of commonality and difference. Look for the third way when needs or interests seem to compete.
- Develop stakeholder strategies: Creating stakeholder strategies is an iterative process with the preceding step. Inherent in each stakeholder strategy is the best way to form a two-way exchange that creates value for all parties. This step should include a determination of measurable outcomes.
- Implement stakeholder strategies: Create a detailed action plan that defines accountability for full implementation of the stakeholder strategies, and support the plan with resources.
- Evaluate: Using the measurable outcomes defined above, evaluate stakeholder efforts’ success in creating value for all.
Additional articles about the stakeholder model are available here.