The fundamental element of citizenship strategy is understanding the expectations of stakeholders.
By Tom Knowlton and Nadia Gomes, TCC Group
In our previous post, we introduced a framework for successful corporate citizenship containing four key elements: culture, engaged leadership, integrated structure, and citizenship strategy.
The latter elements of strategy and structure were noted as “fundamentals” or the foundation for further growth, while culture and leadership were tagged as “accelerators,” serving as a catalyst for real impact and sustainability of the citizenship efforts.
Moving ahead in our series, we’ll examine the critical role that each of the elements plays, starting with this post on the “fundamental” element of citizenship strategy.
Expectations of Stakeholders
Leading corporate citizens understand that an effective citizenship strategy must reflect the expectations of all stakeholders when considering the actions of the company and its impact on society.
Internally, it is critical to engage company leaders and business units in understanding and acknowledging the expectations of various stakeholders; identifying the issues that are important for the company as well as their priority order; and setting goals that leaders will be accountable for achieving.
Leaders need to agree that addressing stakeholder expectations can yield business value (in the form of reputation and loyalty among other returns), and they should agree upon the level and scope of the citizenship effort. This leader engagement can in turn encourage commitment from the full company, and most importantly its employees.
Addressing employee expectations cannot be overstated in its business value and its implications for recruitment, retention, productivity, as well as genuine support of the citizenship effort. Companies with little or no support or engagement from employees have a limited opportunity to build a strong reputation with external stakeholders and customers.
A portfolio of citizenship issues and relevant programs that works to meet all stakeholder expectations in priority order, with employees as a key focus, reflects a strategy with potential to generate both company and community returns.
Inputs for Impact
Building on the importance of stakeholder expectations in guiding the strategy process, it is most important that the process yield clear, measurable goals that will drive the strategic approach.
Social impact goals that communicate the value the company is creating for society, and the specific change it will create in response to its selected issues, will build credibility and ultimately the stakeholder trust necessary for the company to thrive.
When leveraging unique company assets to attain those goals, and consistently engaging with and communicating results to all stakeholders, a citizenship strategy should evolve over time to adapt to changing expectations. The following summarizes these critical components of an effective citizenship strategy:
- Stakeholder Expectations Drive the Process
Stakeholder expectations, particularly those of employees, influence the priorities and scope of the citizenship goals which will drive the strategy
- Leadership is Engaged in the Process
Leaders throughout the company need to understand stakeholder expectations and reach agreement on the prioritization of issues that need to be addressed
- Clear Goals are Set and Accountability is Defined
Leaders must agree on the strategic goals and clear targets for success, and understand their role in implementing an effective strategy that will achieve those goals
- The Full Range of Assets is Leveraged
Leaders should work collaboratively within the company to leverage expertise, knowledge and resources in order to maximize unique impact
- Communication with Stakeholders is Consistent
Leaders need to provide ongoing updates on progress against goals with employees and external stakeholders to maintain engagement and collect feedback for refinement
Strategy Snapshot: Monsanto
Monsanto understood the importance of these inputs when developing its citizenship strategy. Most importantly, the company recognized that its stakeholders needed to better understand the value the company brings to society, and that its citizenship actions and programs needed to be aligned to meet stakeholder expectations. They needed to tell their story more effectively and they needed to build a stronger relationship and trust with their priority stakeholders.
This is critical for a company like Monsanto, where pressure from stakeholder groups is never ending and the need to evolve their strategy to meet stakeholder expectations is ever present.
As Monsanto’s priority stakeholder group, farmers were the focus of the company’s citizenship strategy, and the company created clear goals that would significantly impact the ability of farmers to be more productive:
- Producing More: Developing improved seeds that help farmers double yields by 2030
- Conserving More: Developing seeds that use one-third fewer key resources per unit of output by 2030
- Improving Lives: Helping improve the lives of farmers and the people who depend on them, including an additional five million people in resource-poor farm families by 2020
The company’s leaders invested significant time and energy to engage with farmers, understanding their needs and their expectations of Monsanto leading to goals that reflected the leaders understanding that the success of the company depended on a commitment to achieving goals that would not only benefit farmers, but all of society.
Once the goals were set, senior leaders then needed to harness and leverage the resources and power of the company to achieve them. The company underwent a planning process to eliminate or reduce programs and efforts that were not aligned with the goals, and developed new programs and assigned accountability to different departments, including corporate affairs, and the Monsanto Fund.
Ongoing conversations with farmers resulted in the development of a new program called America’s Farmers Grow Rural Education. Farmers identified education as a critical issue that needed attention and support, and Monsanto collaborated with farmers to provide funding to schools in their region.
In addition, the company developed a process to engage business leaders in regions around the world to ensure the approach was global. Regional business leaders are united around the goals, and are developing approaches that are customized to the local culture and the needs of the farmers.
Most importantly, Monsanto has developed a robust stakeholder engagement strategy, engaging not only with farmers, but also with employees, government officials, environmental groups and other key stakeholders.
Strategy formation can be swayed by countless demands and competing interests. When driven by stakeholder expectations, however, it is positioned for impact that will be of greatest influence, and can support compelling communication efforts. Goal clarity and the leveraging of company resources round out the picture with credibility and impact, forming a strategy that serves as a fundamental building block of successful citizenship.
Part 1: Why Strong CSR Programs Don’t Always Lead to Successful Corporate Citizenship