In my last article, I introduced the principles of Corporate Diplomacy as a way for African Business leaders to create long-term interest-based alliances with key external players to advance their company’s interests. In this, my final article of the current series on creating value by integrating ESG best practice into core business, I want to talk about how to integrate Corporate Diplomacy into your organisation’s way of working — as an effective tool for meeting your business objectives and lasting business success.
In my Corporate Diplomacy Masterclass©, I take companies through a six-step framework or structure for effective stakeholder management. I’m clear from the outset that the framework isn’t a silver bullet because the one constant of Corporate Diplomacy is change — your stakeholders will change, issues will evolve and new ones will come up. It’s also not a linear process but one of constant review and planning. I’ll illustrate this through the example of a FinTech company providing mobile money services to small businesses, including those in more remote areas — let’s call it Nifike[1]
1. Understand your context and anticipate any issues
Business leaders with great ideas sometimes fail to take time to understand the context in which they plan to operate, whether at country or community level. They deprive themselves of knowing, against that backdrop, what their business will need from stakeholders to flourish (their business enablers) and whether these things are readily available. Whatever the size of your business, its long-term sustainability relies on you first asking the questions, “what and whose need is my business trying to meet?” and “what challenges might my business be creating?” Being able to articulate your business enablers while recognizing your stakeholders’ needs is a first step to achieving win-win outcomes. It will give you a clear list of your own priority needs and help you to set realistic business delivery timelines.
Nifike understands that access to banking services for small business in remote areas is extremely challenging. Through its mobile service, it can provide a range of credit, payment and savings services, which need to be both reliable and secure. Its business enablers include adequate communications and energy infrastructure, appropriate regulation and timely granting of licences and permits. There could also be issues that will derail delivery of its objectives, such as community concern over the health implications of a nearby mobile mast, which might require extensive engagement efforts to address. Anticipating these tensions from the start will help Nifike identify key focus areas for engagement in advance, providing early opportunities for alignment and collaboration.
2. Identify your key stakeholders
If you have read other articles in my current series, you will know how important it is to know who your stakeholders are. Stakeholders include any group or individual who can affect or are affected by your business or project. From a Corporate Diplomacy point of view, however, you need to look further than those with the most power or interest in your business or sector. Questions you should look to answer include “Who must be involved to ensure we can meet our business priorities?”, “Whose advice or support do we need?” “Who is in a position to block or withhold support?” “What common interests can we align?”
Nifike’s leadership team must consider its list of priority enablers, together with the full range of external stakeholders vital to managing these. While the company must engage and inform the overstretched regulator to grant the necessary licences, it could also look to engage other businesses in the sector, local government officials, small business associations and community leaders in all the areas it wants to provide its services, to build wider collaboration. While bearing in mind that its stakeholder ecosystem is constantly changing, Nifike’s understanding of stakeholder influence on its success helps it to engage for maximum impact and value.
3. Clearly define your engagement objectives and issues
To engage strategically and for the long term, focus your efforts on building the enabling environment you need, and meeting the needs of the country, community or your customers. Nifike will engage with the regulator to create the right policy enablers for its business, but its leaders will also look to develop a shared vision across the entire stakeholder base. Reliable access to mobile money services can improve financial inclusion for the underbanked, stimulate innovation and productivity and boost employment. This could be a win-win opportunity for both the company and the government, who can work together to identify the biggest gaps in the enabling environment and to fill them.
Equally important for Nifike is the need to resolve any specific conflicts. Delays in permit approval could be due to other priorities within the relevant government agency. This could also be caused by failure to engage local community leaders, who are pressuring their local MP to block progress. Taking time to understand the root cause of challenges to your business can help identify potential areas of alignment or friction with your stakeholders. It can also give you an appreciation for the overall complexity and risk associated with any given issue and the level of attention it will command.
It’s difficult to know exactly how our business relationships will look coming out of the Covid-19 pandemic, but there are ways to ensure that your engagement adds real value. Investing in a Corporate Diplomacy approach will lift your business relationships to a new level and advance your company’s interests. More importantly, it will position you for long-term success.
[1] Means ‘reach out to me’ in Swahili