Publication: Executive Citizen @1998

FOSTERing Collaborative Stakeholder Relationships
Ann Svendsen

When companies establish collaborative relationships with stakeholders it is much like the process individuals go through to develop lasting interpersonal relationships. Enduring relationships are based on foundation of common values and history - the sense of 'we'.

In successful marriages or friendships, the partners develop mutual interdependence but also define their boundaries so that each benefits from the success of the other but retains his or her own identity. Partners in successful relationships also learn how to deal with conflict, resolve power struggles, and come to some agreement about behavior with the "in-laws" or other mutual friends. The same is true with long term corporate-stakeholder relationships.

The following briefly describes six stages in a relationship-building process. The acronym "FOSTER" is used to represent the six stages. "F" is for establishing a solid foundation, "O" is for organizational alignment, "S" is for stakeholder strategy, "T" is for the process of building trust, "E" is for evaluation and "R" is for repeat, recognizing that the process of relationship-building is continuous.

Given the growing importance of alliances, and the limited time and other resources available, companies must ensure that their efforts are as efficient and effective as possible. By making the steps involved in building relationships and the potential pitfalls and opportunities more apparent organizations can achieve greater success.

1. Creating a Foundation: Social Mission, Values and Ethical Principles
As most of us who have experienced a failed relationship know, dealing with our own "stuff", clarifying what we think is important in life, our values, and our ethical beliefs, is a necessary prerequisite for building strong relationships with others. If we are dishonest, self-centered, or motivated by greed or jealousy, our relationships tend not to be long lasting. If we have not clarified our needs, we end up in relationships that are unsatisfying and not aligned with our life goals. The same is true of relationships between a company and its stakeholders.

Companies must decide what they stand for, what they want from their stakeholder relationships and what they expect to get back. They must also develop and operate from a set of values and ethical principles that supports the growth of mutually beneficial relationships. A company's social mission, values and ethical principles provides employees with a solid foundation for improving existing relationships and for creating new, mutually beneficial stakeholder relationships.

2. Organizational Alignment
Like all imperfect human beings, no organization can ever hope to reach a state of complete readiness for relationship-building. Often it is through the process of learning and growth with our partners that we build strengths and overcome our weaknesses.

Nevertheless, assessing and reaching a certain level of organizational readiness will make success more likely. This involves aligning internal systems and structures to remove barriers. The alignment begins with a review of existing internal systems and structures to identify areas where changes are needed.

Essential systems to support collaboration include rewards and recognition; information systems to promote and support dialogue; 360 degree communication to foster cross-functional, multi-level internal partnerships; and training and mentoring to ensure staff have the necessary mindset and skill sets. Participative decision-making encourages employees to take responsibility for their role in relationship building and makes it possible for them to respond quickly to opportunities and meet the needs of stakeholder partners.

3. Develop a Stakeholder Strategy
A stakeholder strategy is much like a plan for finding a mate. We assess our current relationships, decide on our priorities, "play the field" to narrow down prospects, and then hatch a plan for getting to know those prospective partners.

To identify strategically important stakeholder partners, companies first inventory and assess their organization's network of stakeholder relationships, define gaps and identify future needs. Information is collected about potential stakeholder partners to determine compatibility and to narrow down the list to those with similar values and organizational cultures. With this 'short list' in hand, a company finalizes a strategy or action plan for developing relationships with these potential partners.

4. Build Trusting Relationships
Collaborative partnerships depend on trust. Partners must communicate effectively and resolve conflicts, especially about sensitive issues like distribution of rewards and the involvement of host organizations - the "in laws". As in any relationship, attention must be given to renewing the relationship and sustaining the commitment of the partners by building and maintaining support of the parent organization, evaluating progress and celebrating success.

5. Evaluate and Improve Relationships
Every once in a while, it is a good idea to ask our friends or lovers how they think the relationship is going. Are they happy? Are their needs being met? Are there problems that have been brewing but never talked about or resolved? A regular relationship check-up can often avoid major problems down the line. It can also help to open lines of communication and help each of the partners gain a better understanding of the other.

Companies also can benefit from a regular assessment of their relationships. Using a stakeholder audit, companies can:
· monitor their performance on key social-relationship goals,
· consult with stakeholders to gain an understanding of how they view the company's commitments, the relationship-building process and the outcome of those relationships,
· clarify and improve 'social' performance,
· build employee and stakeholder support, and
· increase transparency through the reporting of this information.

Table 3: A Guide to Building Collaborative Stakeholder Relationships

Stage Tasks
Establish Foundation for Relationship-Building
  • assess relationship-building as a strategic direction
  • review and refine social mission, values and ethics
  • communicate corporate commitment
Align Systems and Structures to Support Collaboration
  • assess organizational readiness
  • identify gaps and inconsistencies
  • assess systems and structures
  • make changes as needed
Develop Stakeholder Strategy
  • inventory and assess existing relationships
  • benchmark best practices
  • meet with stakeholders
  • refine goals and prepare strategy
  • set up internal structures
  • action planning
Harness the Power of Long Term Relationships
  • exchange information
  • clarify expectations and perspectives
  • identify common goals
  • develop organizational structures
  • clarify roles and responsibilities, short term objectives and timelines
  • develop and implement 'first projects'
  • identify and resolve areas of conflict
  • ensure availability of resources
Evaluate and Continuously Improve Relationships
  • design and conduct stakeholder audit
  • celebrate successes
  • learn from failures

by Ann Svendsen

This article was adapted from "The Stakeholder Strategy: Profiting from Collaborative Business Relationships" (Berrett-Koehler Publishers, November, 1998). Ann Svendsen is the President of CoreRelation Consulting a consulting firm specializing in stakeholder relations and social auditing based in Vancouver, Canada.


Home | Current Projects | Research | Conferences | Courses | Resources | About Us | Contact