Managing Stakeholder Outrage in Age of Distrust

Managing Stakeholder Outrage in Age of Distrust

October 27, 2016

Time and again, organisations are being caught unwittingly like spooked deer in the proverbial headlights of increasingly sophisticated and cynical stakeholders.  But it doesn’t have to be this way. A more strategic, collaborative approach to good community relations can be taken that is kind to the bottom line…

By David Ross

There is so much stakeholder outrage when it comes to corporate activity and it really should come as no surprise. Edelman’s Trust Barometer identifies that the relationship between large enterprises and its stakeholders continues to decline along with trust.  Add social media to the mix, and then more outrage can be facilitated, spreading further and further from its source.  Indeed, social media has become a game changer for how large enterprises manage their social responsibility; where, twenty years ago, a person angry at an organisation’s activities had nowhere to really take that gripe, nowadays, they have the power of tapping into instantly scalable networks that could be chock full of like-minded (read: angry) people.  Social media can create a very powerful ripple effect.

But it’s more than that. US political scientist Chip Hauss observes that in a globalising world, we are part of larger and increasingly dense networks that include more and more of us to the point that everything we do – or corporations do – has an impact on more and more of the population[1].

By the way, the growing density of networks also helps us to understand why we face a growing number of truly complex or ‘wicked’ problems.  As everyone has closer ties to everyone else, and as change continues to occur at an accelerating rate, it stands to reason that problems become harder and harder to solve. Hence, in a world the US military anticipates will be increasingly “VUCA” – volatile, uncertain, complex and ambiguous, there has to be a consequential impact upon individuals or groups within society.  Albrecht et al [2] have even created a word for this stress, solastalgia.  It comes from people perceiving that there are forced changes to their sense of place (home) and importantly, with that comes a sense of injustice and/or powerlessness.

This feeling of chronic powerlessness is driving people to take a greater stance when corporations undertake works in their communities in an unsatisfactory or imposing manner, that results in a collision of goals.  Because it is against the corporations (and government) that people can lash out against these global forces.

And there are few places this can be seen so glaringly than in the world of heavy industry.

Subdue the enemy without fighting

Industry often struggle with managing outrage because of how they view the problem from the get-go; they fail because they treat conversations and negotiations with the outraged as nothing but war.  At all costs, we must win.

But that approach ignores the values that stakeholders hold dear as well as the goals that they aspire to.  Pushing against these, as organisations are want to do, may only quieten the aggrieved temporarily, if that.  Importantly, they won’t be going away.

So, just how can organisations cope with a chronic situation where the outraged want a win-loss result (where they win and the Industrialists must lose), which could often result in adverse media exposure, costly delays and noticeable hits to the bottom line and shareholder value?

Well, while there is certainly a need to be tactical when grappling in the moment with the outraged, it is just as important to establish the longer strategy, forming the bigger picture.  To establish a respectful, compassionate stance that, paradoxically, will be the best means to protect brand and the bottom line.  And it’s important to be self-aware, which can sometimes be the biggest challenge of them all.

In the moment

People’s ears always prick up when discussion comes around to talking about “what do I do, in the moment, when people are cranky?” for no one enjoys being screamed at.

So, the best place to start is with the ground-breaking work of Peter Sandler[3] who developed six tactics to respond to that very question, namely:

  • Stake out the middle, not the extreme: If an enterprise notes an activity is perfectly safe but stakeholders believe that the activity is significantly risky, focus by the rest of the stakeholders, including the media, will remain on “significantly risky”.

Don’t exaggerate how minor the impacts are; rather acknowledge arguments on both sides of the debate as well as some of the truths.  Hence, acknowledge that the activity could be modestly risky:

  • Acknowledge prior misbehaviour (and mistakes): It is not up to you to decide when your mistakes or misbehaviour can be forgiven and forgotten; your stakeholders, whose memories will be swayed by the weight of history, will decide when that is to occur. So, keep on apologising until stakeholders tell you to do otherwise.
  • Acknowledge current problems: Never hide or distort bad news and certainly don’t try to “spin” something positive out of it – for the community will see right through this as they are going to be pulled by their fears. You have to acknowledge these problems as quickly as possible if your enterprise is to be seen as being transparent and trustworthy.
  • Discuss achievements with humility; give away credit: Don’t highlight achievements and simply credit these due to “the wonderful people and culture of our enterprise”.  Be humble. And credit the involvement of stakeholders whose concerns and outrage resulted in an improved situation.
  • Share control and be accountable: For many enterprises, this is arguably the most confronting principle – and the most poorly achieved.  Communities, groups or individuals are often outraged because an enterprise has imposed its will on the people. So, to continue in this manner will only maintain the status quo or make things worse.

Subsequently, allow others to be involved from outside your enterprise where possible in decision making or monitoring.  This may be government, universities or the outraged people, themselves.  But, I’ll come back to that, shortly.

  • Pay attention to unvoiced concerns and underlying motives: To truly understand the context and level of outrage requires understanding of just what the problem is.  It may be different to what you think it is, for what people may be talking about may be the tip of the iceberg.  So, just what lies beneath the surface?

The bigger picture

Sandman’s tactics described above are fantastic for dealing with outrage.  But there is much that an organisation can do to work at the proactive in order to nip issues in the bud.

As one of the key reasons for the creation of outrage is the imposing of goals by organisations onto receiving stakeholders, then one of the first strategic steps required is for enterprises to create an atmosphere for collaboration with the affected – and importantly, act on those views so that all key goals can be managed.  This goes a significant way towards reducing the potential for future battles.

Yet, it never ceases to amaze me how many enterprises do not take a strategic approach to their stakeholders, nor value what benefits this could provide.  Now that means there is a necessity to identify which comparatively few stakeholders have a real influence over an enterprise’s success and manage them well. It also means starting, and acting on, those conversations early, which can be counter-cultural for many organisations who instead engage with stakeholders well after making key decisions.  This provides real benefits not only in managing brand and reputation but, through calling on diverse, local knowledge, enterprises are better informed about a given situation and therefore, identify better solutions than may often be the case.  Consequently, stakeholders can be positively drawn upon to develop the “who”, “what”, “how” etc.

However, when an enterprise is planning a new project or facility, they rarely identify the why, which is vital in engaging stakeholders.  The why is the narrative that truly describes what need this project or facility will provide and shouldn’t just be delivering an economic need; too often, I believe, Industrialists champion the economic salvation they are providing when a community is searching for social or environmental support or to reduce social or environmental problems (that are often caused by the new project or facility).  As a result, there is no buy-in from the influencers.

So, consideration needs to be given to just what is it that is going to appeal to stakeholders – why.

What is also concerning is the lack of reflection carried out by enterprises once a stakeholder engagement strategy is developed regarding the internal obstacles to good strategy delivery.  Instead, it seems to be human nature that, once we have come up with a solution, we don’t want to consider that the enterprise, itself, could be it’s greatest problem.  This requires considering in particular, an enterprise’s culture, leadership style, staff (whether they have the appropriate capability, especially for the gatekeepers of success that are middle managers), systems, and structure.

If we take a look just at culture and “how we do things around here”, alone, it quickly becomes apparent what an anchor it presents to enterprises who must manage the satisfaction of a number of diverse stakeholders.  Internal culture can block delivery because of the importance Industrialists often appear to place on looking inwards and maintaining control.  I hear that time and time again.  Such a culture just won’t work nowadays when there is a need to be somewhat more flexible in order to deliver on key needs of the community.

Furthermore, when it comes to cultural considerations, Industrial enterprises unwittingly don’t appreciate how their dominating worldviews, internally, affect the behaviour and decisions made.  These, in turn, become a root cause for the creation of outrage.  A good example is how land is viewed.  Seeing the land primarily as an extractive resource solely for the creation of shareholder value – as Industrialist enterprises are still often wont to do – collides with the community who view the land as so much more (home, country, lifestyle). It’s important for enterprises to understand this and manage it, accordingly because it is the collision of goals that underpin these worldviews that generally cause the conflict to begin with.[4]

Arguably the most critical part – you.

Creating that spirit of collaboration and involvement isn’t as easy as it sounds.  It requires more than an open and transparent enterprise.  Just reflect on that for a second:

  • Do you see yourself as a heroic-style leader?  Or are you willing to share control with people or groups outside of your enterprise to find better solutions?
  • Who do you dislike talking to? And why?
  • Are you truly understanding of those who are different?
  • Do you listen deeply when talking to affected parties? Or are you always getting ready to make your next response?

Because successful for your enterprise with its project or facility depends on you.

You may feel that there is much here that your enterprise may have to change in order to refrain from being the “spooked deer”; that it is all too hard, over the top or would be too hard simply to have those conversations with people. But, when you realise how outrage can causes months and millions of dollars in delays – not to mention adverse media coverage – there is no alternative if you are to protect your brand and reputation.

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