The evolution of stakeholder management operations
With of senior executives ranking external engagements among their CEOs’ top three priorities - up 13% since 2013 - Business Chief speaks to John Harte, Advisory Member of The Chairman’s Network (Australia), on the evolution of stakeholder management operations.
Defining stakeholder management operations as “the effective management of those that have an influence on the achievement of your company’s purpose and those that you want to influence in successfully bringing that purpose to life,” Harte has seen an increase in awareness that power is shifting. “Technology - particularly social media - is reducing the barriers to communication and community expectations are evolving.” As a result, companies are using technology to build their engagements with stakeholders, as well as paying closer attention to stakeholder expectations and anticipating potential changes. “The really smart companies are spending more time understanding and engaging with their influencers in a time of technological and social change,” added Harte.
The benefits of stakeholder management
“Companies can build and sustain their social licence, anticipate and better navigate obstacles by constructively engaging with groups that they seek to influence or want to influence the Company," comments John Harte, Advisory Member of The Chairman’s Network (Australia)
The challenges of stakeholder management
- To value it, to embrace it and to be authentic in using stakeholder management to genuinely improve outcomes for the business and the communities that influence business performance.
- To invest in stakeholder management in a planned and consistent way rather than a simple, short term and transactional way. To use stakeholder management to build engagement and deliver better outcomes rather than simply solve a short-term problem.
- The way we engage with our stakeholders has to respect the local culture and market dynamics. The approach in a hierarchical culture like Japan will be different to the approach in the UK or the US.
Like so many organisations and business operations, stakeholder management has not escaped the impact of COVID-19. With businesses facing reduction in employee numbers and financial budget, Harte has seen “some companies required to cut their engagement in the face of the crisis due to personnel, budget and business prioritisation issues which have demanded a focus on the urgent rather than the important.”
In addition, Harte has seen the loss of opportunities to meet in person due to the need to maintain social distancing. Which has resulted in a shift to a virtual world that demands more attention and focus. Harte believes that this approach is “yet to deliver the affirmation and interaction of being ‘in the room’ with people.” Equally Harte has seen two extremes emerge due to the impact of COVID-19 and social distancing measures, “For some people in isolation, they have had increased time on their hands to engage far more than they would ever do, about a range of issues that would never have warranted their focus prior to COVID-19.”. While this is a positive, Harte has also seen people who feel powerless, overwhelmed and isolated who were previously active contributors.
Ultimately, when it comes to the future of stakeholder management in light of COVID-19, Harte expects to see an increased level of engagement, with a need for discipline to focus on important issues and the things that will make a difference, instead of general interest topics.
With this in mind, for organisations to get the most out of their stakeholder management operations, Harte details the importance of being clear about what is trying to be achieved and who is responsible for the tasks required to achieve it. “Create clear expectations, roles, responsibilities and boundaries, as well as understand the risks and make sure that they are managed, mitigated and monitored,” comments Harte. In addition to maintaining clear communication, it is also important to look at stakeholder engagement as a way to build, grow and sustain a social licence with key influencers and groups that the organisation needs to achieve its goals and influence its work. “Think of stakeholder management as an investment in brand, reputation and building social licence rather than a necessary evil or ‘just another’ business process,” states Harte.
The importance of stakeholder management in a global crisis such as COVID-19
Arguably being one of the most vital elements of a business’ operations as the pandemic brought about widespread disruption and confusion, identifies the importance of keeping key internal and external stakeholders informed as the situation unfolded, as well as the impact and implementation of response measures.
Practical steps to take to ensure that internal and external stakeholders remain informed:
- Assemble a cross functional crisis response and communication team
- Communicating with employees early and often
- Engage with critical suppliers
- Remain in contact with key stakeholders
Business Chief Legend: Ho Ching, CEO of Temasek
Ask Singaporeans who Ho Ching is, and the majority will answer the ‘wife of Prime Minister Lee Hsien Loong’. And that’s certainly true. However, she’s also the CEO of Temasek Holdings, Singapore’s sovereign wealth fund, and one of the world’s largest investment companies.
Well, she is until October 1, 2021, as she recently announced she would be retiring following 16 years as CEO of the investment giant.
Since taking the reins in 2004, two years after joining Temasek as Executive Director, Ho has gradually transformed what was an investment firm wholly owned by Singapore’s Government into an active investor worldwide, splashing out on sectors like life sciences and tech, expanding its physical footprint with 11 offices worldwide (from London to Mumbai to San Francisco) and delivering growth of US$120 billion between 2010-2020.
Described by Temasek chairman Lim Boon Heng as having taken “bold steps to open new pathways in finding the character of the organisations”, Ho is credited with building Temasek’s international portfolio, with China recently surpassing Singapore for the first time.
As global a footprint as Ho may have however, she has her feet firmly planted on Singapore soil and is committed to this tiny city-state where she was not only educated (excluding a year at Stanford) but has remained throughout her long and illustrious career – first as an engineer at the Ministry of Defence in 1976, where she met her husband, and most notably as CEO of Singapore Technologies, where she spent a decade, and where she is credited with repositioning and growing the group into the largest listed defence engineering company in Asia.
It’s little wonder Ho has featured on Forbes’ annual World’s Most Powerful Women list for the past 16 years, in 2007 as the third most powerful woman in business outside the US, and in 2020 at #30 worldwide.
But it’s not all business. Ho has a strong track record in Singapore public service, serving as chairman of the Singapore Institute of Standards and Industrial Research and as deputy chairman of the Economic Development Board; and is a committed philanthropist with a focus on learning difficulties and healthcare.
As the pandemic kicked off, she not only led active investments in technology and life sciences, with German COVID-19 vaccine developer BioNTech among the most recent additions to Temasek’s portfolio, but through the Temasek Foundation – the firm’s philanthropic arm which supports vulnerable groups close to Ho’s heart, handed out hand sanitiser and face masks.
So, you would be forgiven for thinking that at age 68, Ho might simply relax. But in March 2021, just as she announced her retirement from Temasek, Ho joined the Board of Directors of Wellcome Leap, a US-based non-profit organisation that’s dedicated to accelerating innovations in global health. Not ready to put her firmly grounded feet up yet it seems.