Leaders Engaging Stakeholders

A key characteristic of leaders in any capacity is their ability to engage stakeholders. What or who is a stakeholder? It is anyone who has a stake in the future of the organization.

In churches it is the pastor, staff, membership and lay leadership. Specifically, the leadership involves such groups as the Parish Council, the Vestry, the Session, the Deacons or the Elders. They have responsibility for church oversight, particularly in areas of spirituality, service and financial stewardship.

Likewise, in a business stakeholders are comprised of the administration, staff, board and customers; and in a nonprofit organization they are the CEO, staff, board and the people being served. So the question is, why and how do you engage them?

Why Organizations Want to Engage Their Stakeholders

According to a 2012 Gallup study of nearly 50,000 work units and 1.4 million people, employee engagement is directly related to productivity, profitability and other measures of success.

Specifically, those work units in the top quartile in employee engagement outperformed bottom-quartile units by 10% on customer ratings, 22% in profitability, and 21% in productivity. Those work units also saw significantly lower turnover, shrinkage, and absenteeism as well as fewer safety incidents, patient safety incidents, and quality defects.

Of course, these results are similar in the nonprofit sector. In fact, a Cranfield University report on stakeholder engagement said that very thing. “Stakeholder engagement is relevant to any type of organization: business, public or civil society.”

How Organizations Engage Their Stakeholders

Of course, there are lots of routes to engage stakeholders, but it boils down to understanding the needs and wants of stakeholders, building trust by aligning appropriate practices with those needs and wants and giving up some control.

Unfortunately, while all of that sounds good, another Gallup study revealed that 70% percent of American workers are not engaged in their work. Gallup described “engaged” employees as “those who are involved in, enthusiastic about and committed to their work and workplace.”

Not surprisingly, the study showed that people with the most power in the organization (executives, managers, and officers) were also reported as having the highest levels of engagement. Unfortunately, what we have learned from the unengaged in the corporate sector applies in the nonprofit sector as well. The level of Board, volunteer and donor engagement will have a significant effect on fundraising efforts and organizational morale.

Simply stated, organizational leaders can have high levels of engagement or control, but they can’t have both. For example, if you improve your engagement of board members, staff and donors, you are likely to see increases in giving. However, in order to increase engagement, you have to also give up some control.

A Prime Example

One of our clients provides an interesting case study. It just so happened that the technology in a well-used room was nearly 20 years old and considerably outdated. There were several engineers and a high-ranking officer at a world-class technology company who were among the folks who used that room. They offered to update the equipment at their expense, providing much improved technology along with the installation. It was a gift worth $7,000-$8,000.

They coordinated with appropriate staff, and in particular, the technology professional who began to assert his authority. The bureaucratic controls that were initially put on the process and the people were so inflexible that the staff member dampened engagement and nearly killed the deal.

The point is that, engaging people requires that we acknowledge that they have something to offer and then allow them to offer it. While it sounds simple, you’d be surprised how often people and organizations miss that point! Whether it’s in a church, a nonprofit or a company people want to be empowered to contribute and they want their contributions to be recognized.