Stakeholder dialogue: miracle cure or alibi event?

Not everything was better in the past. However, many things that exist today already existed in the past. The only difference was in the names. One example is the stakeholder dialogue, which used to be known as “round table”. From time to time I have had the opportunity to take part in such events. Some, I also initiated myself during my time as a minister in the northern German federal state of Lower Saxony. In conclusion I can say: You can get many things right, but it’s also easy to get many things wrong.

Stakeholder dialogues are forums on the subject of sustainability in which everyone involved in a certain issue takes part. The participants can express their views on a given issue. These “stakeholder groups” provide a company or an institution with an opportunity to assess its products or concerns and to evaluate them from different perspectives. The subject of the dialogue, as well as any entrepreneurial activity, can subsequently be improved or optimised.

APPRECIATION THROUGH OPEN DISCUSSION

As the stakeholders – or, to call them by their former name, the participants – invest knowledge, opinions and time, they should receive a high reward from the company that initiates the dialogue. This can be done, for example, through the facilitation of an open, honest discussion. If, for example, an entrepreneur from the garment industry invites contractors who produce for him in Bangladesh or Turkey to take part in a stakeholder dialogue, that is usually a good sign.

However, the invitation also contains a clear duty to the facilitator: they have to listen to what they’re being told. This means, for example, that the CEO’s opening address to a stakeholder dialogue should not just be about growth figures. Because in general, the less a company cares about the situation of its producers or service providers, the better the numbers tend to get. However, when unconditional growth is the only thing that counts at the executive level, the result is often that any kind of stakeholder involvement amounts to little more than an alibi performance.

CONSTRUCTIVE TALKS IN THE CAFETERIA?

Stakeholders should be valued and appreciated, and particularly so on the day of the dialogue event itself. To a large extent, this is dependent on the location where the event takes place, as well as the effort that’s being put into it. A stakeholder dialogue that’s held in the firm’s employee cafeteria with canteen meals will hardly make participants feel sufficiently comfortable to speak their minds and say what they actually think. Nor will it persuade them to stay any longer than absolutely necessary. The result will be considerably better if both sides develop a real appreciation of each other – and that requires, among other things, a comfortable fireside atmosphere instead of a cold cafeteria one.

Often enough however, a working atmosphere pervades, resulting in a missed opportunity. Moreover: Sending out invitations to a stakeholder dialogue and then taking obvious shortcuts in terms of hospitality and travel expenses not only demonstrates a low level of appreciation for the participants but is also an expression of how reluctant the company is to take such dialogues seriously. If stakeholders still hope to make a difference in this situation, their hopes are likely in vain.

CLEAR DECISION SHOULD BE MADE EASILIY

Stakeholder dialogues are also little more than alibi events when the issues that are being discussed could easily be decided at the executive level. If – as was the case during an event I attended recently – a discussion is held on whether plastic bags in shops should be abolished, one can feel more than a little awkward. Issues like this one are self-evident, and they are questions that should be answered by the CEO with a simple yes or no. He does not need a stakeholder dialogue for it.

After all, a stakeholder dialogue can only become a success if the result is more than just an inventory of existing problems. It should create a constructive working atmosphere that ultimately yields solutions to achieve real improvements in the core business. Whether or not this happens is a reliable indicator for the honesty of a company that says it wants to involve its stakeholders.