Working at home, disruption of international travel, and a higher attention on health and safety are all part of our new business landscape – but how do we go beyond these surface-level observations to truly understand where things are headed? John Pabon finds out
Rule number one for any author, marketer, or public speaker is always, ‘remember your audience.’ You have to know what energises them and what puts them to sleep, what gets them talking and what makes them cringe. Without these critical pieces of intelligence, you run the risk of losing your audience along whatever journey you’re trying to take them on.
While communication professionals try their best to stick to this rule, they often have to fight against the operational center of an organisation. That’s because a strange shift has happened in the business world. Rather than developing messaging, products, or strategies around what their stakeholders want, many companies are trying to force their wishes on an unwilling market. In short, they’ve forgotten their audience.
Instead of explaining why this is all so important, it’s much easier to show what happens when you forget about stakeholders. Take, for instance, the example of Tony Piloseno. A young college student, Tony was passionate about paint. He channeled this passion into a job with one of America’s oldest and most well-known paint brands, Sherwin-Williams.
Tony was so passionate; he took his love of paint to Tik Tok and amassed millions of viewers to his paint-mixing challenge videos. While these videos were certainly a viral sensation for people stuck inside their homes during the pandemic, Sherwin-Williams’ management didn’t see things the same way. In fact, they fired Tony for breaching the company’s (outdated) social media policy. Had they approached this more strategically, the company could have capitalised on the obvious desire for information from a non-traditional channel. Instead, they ended up a social media laughingstock and potentially lost an entire generation of consumers. (Don’t worry. Tony landed on his feet and secured a job doing what he loves).
What does ‘new normal’ mean?
All of this is great, but you might be wondering why we’re discussing stakeholder engagement at all. It comes down to a phrase talking heads have been droning on about for almost a year: the post-Covid ‘new normal.’ What in the world does this actually mean? Surely, executives and overpaid consultants around the globe are grappling with this very question. There’s no doubt things have changed throughout the pandemic, and that the world is entering a very different era. Working at home, disruption of international travel, and a higher attention on health and safety are all part of our new business landscape. But how do we go beyond these surface-level observations to truly understand where things are headed?
The only way to do that is to understand your stakeholders. The universe of stakeholders is endless, and depending on who you are and what you’re trying to accomplish, will be different. A student trying to get a passing score only has to please one stakeholder: their professor. A Fortune 100 business with a highly complex value chain, board of directors, and consumer base has a few more stakeholders to try and satisfy. Regardless, satisfy them one must. While writers and marketers can simply hold a focus group to gather the intelligence they need, the seismic shifts business is going through post-Covid-19 require something a bit more sophisticated.
What might come as a surprise is that the field of sustainability is perfectly placed to handle understanding these changing stakeholder needs more than most other professions. To be clear, we’re not talking about hugging the trees and saving the polar bears sustainability. This is a practice that encompasses so much more than just the green side of things. The sustainability I’m referring to includes everything from supplier management to logistics, board governance to human capital. For about a decade, it’s also included a unique approach to stakeholder engagement called materiality.
While materiality is well known in the operational sustainability space (and the financial world, to a lesser degree), you’d be hard pressed to find many business leaders, activists, or MBA students who’ve heard of it.
The materiality principle
At its core, the materiality principle is applied to give a clear direction for stakeholder engagement, strategy, and reporting. It also helps organisations prioritise their most important, or material, issues based on in-depth feedback from both internal and external stakeholders. The materiality assessment can explore a number of areas, including what issues are most critical for business success, how well a company is meeting these needs, and the changing dynamics of what stakeholders find important.
While I could dive into the boring details of materiality, I’d hate to violate rule #1 and lose all of you. Suffice to say, one can easily apply the basic principles of materiality to most situations where there is a need to deeply understand stakeholders. Remember. Stakeholder engagement isn’t just something Fortune 500 companies should spend millions of dollars on. Smaller enterprises, and even individuals, can benefit from a little more focus on what their audiences are actually asking for. How?
- First, begin to understand your universe of stakeholders. From colleagues to supervisors, government officials to the media, every business, organisation, and individual has a unique set of people they need to keep in mind. But, not all stakeholders are created equal. Trying to please everyone is rarely a successful strategy. Focus instead on those with the biggest investment, the largest reach, or the most opinions.
- Next, learn to ask the right questions. Once you’ve distilled that universe of stakeholders into something more manageable, make sure you aren’t wasting their time or yours. Every interaction and question should help you dive deeper into their thinking, behaviors, and drivers. When done right, this can help you get ahead of shifts and flank your position.
- Lastly, focus on what’s material. What separates successful endeavors from those that fall flat has little to do with capital, networks, or marketing. It has everything to do with focus. Even the biggest corporations only have so much capacity. By focusing your efforts on what’s most material, instead of all the shiny objects floating around, you’ll be much better placed to address stakeholder needs.
One final word of advice when it comes to stakeholders: don’t get complacent. As nice as it would be to have static consumer behavior, there’s really no such thing. Stakeholders, no matter who they are, are constantly evolving and changing direction. This becomes even more complex when you’re taking a truly holistic view of stakeholder engagement through materiality. All you have to do is look at the past year to understand just how much, and how quickly, things can change.
For most of you reading this, the post-Covid-19 ‘new normal’ is just going to be, well, normal. As you start your career journey, the ability to navigate this uncertain landscape will likely be a defining feature of success. In order to do so, you’ll need the skills required to make uncertainty more certain. Getting to the heart of what’s driving the agents of change – stakeholders – will help set you apart and set you ahead.
John Pabon is the Founder and Chief Advisor at Fulcrum Strategic Advisors, Asia’s only risk management consulting firm focused on geopolitics, sustainability, and communications. He is also the Programme Director for The Conference Board’s Asia Sustainability Council, a member of the United Nations Association of Australia, and serves on the board of advisors to the U.S. Green Chamber of Commerce. John is the author of Sustainability for the Rest of Us: Your No-Bullshit, Five-Point Plan for Saving the Planet.
