5 key factors for successful stakeholder engagement

Stakeholder engagement is more challenging than ever in 2023. Here are five factors influencing impactful engagement with the community.

Communications, Crisis Communications, Engagement, Public Relations, Stakeholder Engagement

Siobhan Poupard 14 Mar 2023
4 mins
A group of stakeholder listening to a presentation

Stakeholder engagement can be affected by a variety of factors, including advancements in technology, changes in political systems, shifts in social priorities and global economic trends.

Now more than ever, it is important for organisations to be proactive in identifying and managing risk. An important part of any risk mitigation strategy continues to be bespoke and impactful stakeholder engagement.

Our Stakeholder Engagement team has detailed five key factors influencing successful stakeholder engagement, based on current global and domestic trends, as well as other emerging issues.

  1. Proactive vs Reactive Engagement

We often see organisations fail to proactively manage stakeholder engagement, searching for rapid responses and resolutions only after an issue has raised its ugly head.

By the time businesses seek engagement support, what may have once been an individual disgruntled resident has become a media storm, significantly impacting employee morale, deflating the bottom line and even raising the spectre of legal ramifications.

Consistent engagement and regular organisational updates help mitigate any engagement risks by building trust and credibility with stakeholders.

By engaging early, businesses can gain valuable insights into the concerns and priorities of stakeholder groups, which can assist when mapping stakeholders and building effective engagement plans.

Early stakeholder engagement with neighbouring residents and businesses as part of an infrastructure project such as a road upgrade, for example, is critical to gain support and cooperation during the construction phase and its associated disruptions.

In turn, early engagement is more likely to reduce the risk of conflicts and resistance as the project or campaign progresses and when stakeholder support and acceptance is even more critical for the overall success.

While proactive stakeholder engagement is considered best practice, there are many factors that can make it difficult to implement in practice, including lack of awareness, unforeseen events, and restricted resource availability.

In the words of Benjamin Franklin: “By failing to prepare, you are preparing to fail.” To be best prepared, Purple’s team of crisis experts offer crisis training, media support and strategy planning to ensure that all risks are identified and mitigation plans are prepared and ready to be implemented.

  1. Reputational risk

As the lines between personal and professional life continue to blur with hybrid working and shifts in technology, stakeholder expectations – particularly those of the community and local government – have become increasingly high.

Damage to an organisation’s reputation may result from negative media coverage, customer dissatisfaction or a failure to meet stakeholder expectations. To mitigate these risks, transparent, considered and meaningful stakeholder engagement should be followed to enhance business reputation and credibility.

Despite good intentions to plan and deliver best practice stakeholder engagement, many organisations overlook the final and often the most critical stage of engagement – the check-in.

To maintain meaningful and regular communication it is important that a follow-up is offered to impacted stakeholders to ensure access to relevant information, where possible requests have been met, and that a key contact is available for future enquiries.

Our team of stakeholder engagement experts are experienced in undertaking bespoke stakeholder perception audits for large and niche audiences in both the public and private sector.

When undertaken regularly, these audits can inform risk assessments and reliably identify stakeholder trends as well as potential vulnerabilities. The identification of these trends can assist in the mapping of stakeholder and developing plans to manage any risks.

  1. Cybersecurity and data privacy

Following the headline-grabbing data breach events at Optus and Medibank in late 2022, data storage and privacy continues to be an increasing concern for both customers and businesses.

Customer Relationship Management (CRM) systems are useful and popular tools to store customer information as well as manage and report on interactions and general sentiment.

These systems capture significant information about customers which may include phone numbers, emails, property address and other personal information.

Often managed by third parties, these platforms can pose a significant risk for data breach. To mitigate this risk, businesses should adhere to legislative requirements and industry standards including strong encryption, regular backups and restricted access.

Despite best efforts, the risk of data breaches is significant and can have severe consequences, including reputational damage, financial losses and legal action.

When a breach occurs communication should be delivered in real time and the information consistent across all channels and reliable.

To be best positioned and prepared, businesses should have an incident response plan in place that includes key messages that consider all likely to be impacted stakeholders including shareholders, customers, employees, regulatory authorities, and media.

Following a breach, businesses will need to rebuild trust with its customers and the public and be aware of future compliance with regulations and Privacy Acts.

  1. Sustainability and climate responsibilities

Stakeholders have a vested interest in corporate ESG and how business operate in a socially responsible manner. Communities, shareholders, employees, and media expect greater accountability when it comes to how businesses respond to climate management matters, including sustainable supply chain practices.

A lack of commitment to ethical and sustainable practices presents a risk for businesses attempting to undertake effective stakeholder engagement and in turn be good corporate citizens.

Generally, we see that modern stakeholders hold businesses to a higher level of accountability and scrutiny than ever before.

Businesses are expected to take steps to minimise environment impacts, engage in ethical behaviour, avoid questionable practices and to genuinely consider and respond to the needs and concerns of impacted communities.

Failing to engage in socially responsible and sustainable practices is a significant risk for business operations and reputation, consequently impacting on finances, legal obligations and staff attraction and retention.

  1. Social and political shifts

Social and political movements at both a national and international level over the last few years have been polarising, as we have seen communities call for greater economic equality, sustainable practices and government accountability.

Since 2010, Australia has been under the leadership of six Prime Ministers, with the volatile nature of Australian politics having impacts far outside of the Canberra bubble.

With these movements come changes in policies and regulations that are likely to impact business operations, as well as reporting obligations and social commitments.

We have observed rapid social shifts in recent years that have impacted business operations. When engaging with key stakeholders, the below areas of key interest for particular audiences should be considered:

  1. Employees – greater prioritisation of mental health and work-life balance
  2. Community – growing awareness of social justice issues and equality, such as race, gender, sexual orientation and accessibility
  3. Suppliers – increasing pressure to engage in sustainable practice and ethical labour supply
  4. Media – data privacy and security
  5. Government –responsible environment and climate management

Increased stakeholder expectations and legal obligations, new technologies, rapid shifts in global social and political trends, civil unrest and turbulent economic markets are exposing businesses to greater reputational and financial risk.

That makes now the ideal time to develop new crisis response plans, refresh engagement calendars and collaborate on impactful and measurable strategies.

Purple’s team of experts has extensive experience in navigating complex issues with diverse stakeholder groups. Our team understands the challenges of exceeding stakeholder expectations, informing and consulting communities, engaging commercial partners and government and continuing to build on the success of our clients.


Siobhan Poupard More from author

Siobhan, better known as Shiv, is not only a weapon but a client-centric communicator, who works with businesses to build strong stakeholder relations and manage brand reputation.

Shiv has worked within communications, public relations and event management roles for government, private and non-for-profit in Victoria and Western Australia.

She is experienced in media relations and most recently, public infrastructure delivery disruption communications. A problem solver and creative writer, she is dedicated to delivering high quality content and creating innovative solutions for clients.

On the weekends, you’ll find her trying to master a newspaper sudoku or planning a bar-hopping itinerary for friends.

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