Stakeholder engagement practices have to be “wild affairs”

When pondering the likelihood of sustainable economic development and the willingness of corporations to make the necessary changes, John Elkington admits to feeling pessimistic these days.

The prolific environmentalist author and co-founder of London consultant agency/think tank SustainAbility, views the tentative efforts by corporations to become more community minded and environmentally responsible as important but likely inconsequential.

Elkington nevertheless maintains a modicum of optimism in his consultancy work with the world’s largest corporate players like Ford, Shell, and Unilever.

Speaking prior to his seminar “Harnessing our Better Instincts: The New Role of Business in a Sustainable World,” (a part of Trent’s Tapscott-Lopes Business and Society Lecture Series), Elkington explains that for strategies like stakeholder engagement to be of any consequence they must be done in an unstructured, destabilizing manner, and not just involve “safe” stakeholders.

“So much of stakeholder dialogue is done in a formulaic manner,” says Elkington.

“I am not a big fan of stakeholder standards because they make the process too scripted. It should be a wild affair. If they [stakeholder processes] are done well – they invite risk into the process and involve a dialogue with people who are not friendly to the corporation. They have to be provocative.”

Transparency is the important element, adds Elkington, who recalls fondly a “wild” stakeholder engagement session in the 1980’s (before the term was in the lexicon of the corporate world) with Danish health care giant Novo Nordisk.

The company invited risk by including a number of radical Green Party members from Germany in the three day session. In the middle of the event, an accidental release of genetically modified organisms was announced, the timing and context uncanny.

“It went horribly wrong,” laughs Elkington.

Actually, after an arrogant, paternalistic response from a senior engineer (“these things happen all the time – not to worry” was the gist of his comments to the assembled, says Elkington) the intervention by a young female scientist altered the course of what could have been a disastrous session. Her response, one of transparency and full disclosure, was an example of a company admitting fallibility and being accountable.

“It was shimmering moment. You have to treat everyone as a stakeholder, or as a different form of customer.”

With globalization and the detrimental effects of climate change, governments must play a new role in assuring that corporations respond to both their communities and their other, major stakeholder: the environment. And it can’t just be crisis-driven, adds Elkington.

But Elkington’s pessimism lingers, a subject he couldn’t escape during the course of his lecture Wednesday at Gzowski College.

The co-sponsor of the series – Don Tapscott - gave testament to this when he pointedly asked – “Can corporations change?”

“Corporations are not natural vehicles for change,” Elkington replied. “We need an anti-body to the current situation. There has been a lull after the corporate environmentalism of the nineties and I think government intervention is absolutely necessary.”