Innovative Stakeholder Engagement in Strategy Development

Here is the transcript of my talk on "Innovative Approaches to Stakeholder Engagement in Strategy Development," which I presented at the Global Strategy Execution Summit—Edition 2, held on June 7 and 8, 2024. This was organised by Data Labs India Solutions Pvt Ltd & fruiStrategy , and the moderator was Shaik Abdul Khadar

Here is the link to the video

Here is the link to the slides used

Shaik Abdul Khadar: Good morning, Andrew. Thank you for joining us today.

Andrew Constable: Good morning. It’s a pleasure to be here.

Shaik Abdul Khadar: Today, Andrew will discuss innovative approaches to stakeholder engagement in strategy development, a crucial yet often overlooked aspect. Andrew, the floor is yours.

Andrew Constable: Thank you. Let’s dive right in. I’m excited to discuss innovative approaches to stakeholder management within strategy development and execution. This is increasingly important in today’s dynamic business environment. We will look at these approaches through the lens of open strategy, which emphasizes transparency, inclusivity, and collaboration.

Shaik Abdul Khadar: Could you first tell us about your background?

Andrew Constable: Sure. I’m a director at Visualise Solutions in the UK, focusing on strategy formulation, execution, and innovation, particularly business model innovation. I have extensive experience across various industries and hold numerous qualifications in the field. Additionally, I co-authored two books, “Online Innovation” and “Hybrid Innovation.” I frequently share insights on LinkedIn, so feel free to follow me there.

Shaik Abdul Khadar: Great. Let’s get started with your presentation.

Andrew Constable: Let’s begin with an interesting statistic from MIT. In 2018, MIT published a report stating that nearly half of an organization’s top leadership cannot clearly articulate the company’s strategic priorities. This disconnect gets worse as you move down the organizational hierarchy. Only 33% of front-line leaders understand their company’s strategy.

Shaik Abdul Khadar: That’s concerning. What do you think is the cause?

Andrew Constable: It’s largely a people problem rather than a strategy problem. Research indicates that 90% of organizations fail to execute strategy successfully. This often stems from senior leaders crafting strategic plans in isolation and imposing them on the organization, leading to a lack of commitment from those responsible for implementation.

Shaik Abdul Khadar: What happens when there’s a lack of stakeholder engagement?

Andrew Constable: A lack of engagement can lead to low buy-in, resistance to change, missed opportunities, and ineffective implementation. It’s essential to involve stakeholders early in the process to ensure alignment and commitment.

Shaik Abdul Khadar: How can organizations address this?

Andrew Constable: One effective method is open strategy, which focuses on transparency, inclusiveness, and active participation. This involves stakeholders from the start, fostering an environment where ideas are freely exchanged and tested.

Shaik Abdul Khadar: Can you give us examples of open strategy techniques?

Andrew Constable: Sure. Let’s start with crowdsourcing strategy ideas. This leverages collective intelligence from a broad group of stakeholders to generate solutions and insights. For example, Barclays Bank used a “strategy jam” to transition from traditional retail banking to a digital-first approach.

Shaik Abdul Khadar: That’s fascinating. What about transparent strategy formulation?

Andrew Constable: Transparent strategy formulation involves sharing drafts of strategic plans with stakeholders for feedback. Buffer, a social media management company, shares its strategic plans and financial metrics openly with employees and customers, fostering trust and engagement.

Shaik Abdul Khadar: Are there any other techniques?

Andrew Constable: Yes, co-creation workshops are another effective method. These workshops bring together diverse stakeholders to collaborate and generate innovative ideas. Lego, for instance, uses an ideas platform where fans can submit and vote on new product designs.

Shaik Abdul Khadar: How do advisory boards fit into this?

Andrew Constable: Advisory boards can provide diverse perspectives and guidance. For example, Patagonia's environmental strategy advisory board includes experts, scientists, and activists, ensuring a holistic approach to sustainability.

Shaik Abdul Khadar: What role does social media play in this process?

Andrew Constable: Social media can be used to engage a broad audience and gather feedback. Dell’s IdeaStorm platform allows customers to submit ideas and suggestions, fostering a sense of community and involvement.

Shaik Abdul Khadar: Data analytics also seems important. Can you elaborate?

Andrew Constable: Absolutely. Open data analytics enhances transparency and allows stakeholders to make informed decisions. The UK’s Open Data Initiative, for example, provides public access to government datasets, enabling valuable insights and feedback.

Shaik Abdul Khadar: This all sounds very promising. How can organizations start implementing these strategies?

Andrew Constable: Start small and gradually open up your strategy process. Visualize stakeholder relationships, communicate the vision, get leader endorsement, and establish feedback loops. Iteration and continuous improvement are key.

Shaik Abdul Khadar: To wrap up, what’s your main takeaway for the audience?

Andrew Constable: Open strategy is about transparency, inclusiveness, and participation. By engaging diverse stakeholders, organizations can develop more innovative and practical strategies. Remember, commitment comes from empowerment, not just authority.

Shaik Abdul Khadar: Thank you, Andrew. This was incredibly insightful. We appreciate your time and expertise.

Andrew Constable: Thank you. It’s been a pleasure.

Shaik Abdul Khadar: Andrew, before we conclude, let’s delve deeper into some of the concepts you’ve touched upon. You mentioned the term “open strategy” several times. Can you explain how this concept has evolved and why it’s gaining traction now?

Andrew Constable: Certainly. Open strategy is a relatively new concept, emerging as a response to the traditional, closed strategy development processes. Historically, strategic planning was confined to a small group of senior executives who made decisions in isolation. This approach often led to a need for more buy-in and misalignment within the organization. Conversely, open strategy promotes a more democratic process involving a wider range of stakeholders. This shift is driven by the increasing complexity of business environments and the recognition that diverse perspectives lead to better outcomes.

Shaik Abdul Khadar: How does this inclusivity impact the overall effectiveness of a strategy?

Andrew Constable: Inclusivity in strategy development enhances the quality and relevance of the strategy. When you involve a broader group of stakeholders, you gather a wider array of insights and ideas, which can lead to more innovative and well-rounded strategies. It also fosters a sense of ownership and commitment among stakeholders, as they feel their input is valued and considered. This is crucial for effective execution, as engaged and committed employees are more likely to work towards achieving strategic goals.

Shaik Abdul Khadar: You’ve highlighted several techniques, such as crowdsourcing and co-creation workshops. Can you provide more details on how these techniques are practically implemented?

Andrew Constable: Sure. Crowdsourcing involves inviting ideas and solutions from a large group of people, often through online platforms. For instance, Barclays used a “strategy jam” where employees across the organization could contribute ideas for the company’s digital transformation. This not only generated valuable insights but also engaged employees in the strategic process.

Co-creation workshops, on the other hand, bring together diverse stakeholders in a collaborative setting to brainstorm and develop strategic initiatives. Lego’s ideas platform is a great example. Fans submit and vote on new product designs, directly influencing Lego’s product development.

Shaik Abdul Khadar: Advisory boards also seem to play a significant role. How should companies structure these boards to maximize their effectiveness?

Andrew Constable: Advisory boards should be diverse and include representatives from various stakeholder groups, such as customers, employees, partners, and industry experts. Patagonia’s environmental strategy board includes scientists, consultants, and activists, ensuring a broad range of perspectives. The key is to ensure that the board is not dominated by any single viewpoint, which helps avoid groupthink and promotes more robust decision-making.

Shaik Abdul Khadar: Social media and open data analytics are intriguing. How can companies ensure they are effectively leveraging these tools?

Andrew Constable: To effectively leverage social media, companies need to establish clear objectives for engagement and feedback. Platforms like Dell’s IdeaStorm allow customers to submit ideas and provide feedback on products and services, creating a continuous dialogue with the market.

Open data analytics involves sharing relevant data sets with stakeholders, enabling them to make informed contributions. The UK’s Open Data Initiative is a prime example, where public access to government data sets facilitates valuable insights and feedback from citizens, researchers, and businesses.

Shaik Abdul Khadar: You mentioned starting small and gradually opening up the strategy process. Can you elaborate on this approach?

Andrew Constable: Gradual implementation is crucial for managing change and minimizing resistance. Could you start by identifying key stakeholders and including them in specific aspects of the strategy process? For example, you might begin with internal stakeholders like employees and gradually extend to external partners and customers. Use pilot projects to test new approaches and gather feedback. Over time, as the organization becomes more comfortable with open strategy, you can expand the scope and complexity of stakeholder engagement.

Shaik Abdul Khadar: How can organizations measure the success of these open strategy initiatives?

Andrew Constable: Success can be measured through various metrics, such as the level of stakeholder engagement, the quality and diversity of ideas generated, and the effectiveness of strategy implementation. Employee surveys, feedback mechanisms, and performance metrics can provide insights into how well the strategy is being executed and how engaged stakeholders are. Additionally, tracking the impact of strategic initiatives on business performance, customer satisfaction, and market positioning can help assess the overall success of the strategy.

Shaik Abdul Khadar: Before we conclude, do you have any final thoughts or recommendations for our audience?

Andrew Constable: My final recommendation is to embrace the principles of open strategy: transparency, inclusiveness, and participation. By engaging a diverse group of stakeholders, organizations can develop more innovative and practical strategies that are better aligned with their goals. Remember, the key to successful strategy execution is not just having a great plan but ensuring that everyone in the organization is committed and empowered to bring that plan to life.

Shaik Abdul Khadar: Thank you, Andrew. This was incredibly insightful. We appreciate your time and expertise.

Andrew Constable: Thank you. It’s been a pleasure.

Shaik Abdul Khadar: Thank you to our audience as well. We will compile any questions and connect with Andrew to get responses. Have a great day!

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