5.2 Best practice when working with stakeholders
We will now look at some approaches that can be used with stakeholders to enhance sustainability. First we will look at some research based on high-performing organisations; we will then apply the ideas to two very different UK businesses.
The book Sustainable Supply Chain Management: Practical Ideas for Moving Towards Best Practice (Cetinkaya et al., 2011) has some practical advice on how to manage sustainability across stakeholders, gathered from interviews with practitioners, industry experts, industry association representatives, academics and politicians:
Think locally, act globally
Gain a thorough understanding of how stakeholders in different countries and different sectors perceive your company’s sustainability performance, and of their expectations. This will allow you to use communication and collaboration strategies customised to suit individual supply chain partners.
Combine stakeholder communication with expertise and innovation
Do not outsource stakeholder relations to lawyers or consultants. Stakeholder relations are best run by experts and colleagues from the relevant business units, who fully understand the operations involved and can focus on innovation and continuous improvement.
Communicate and involve
Communication and involvement entails reporting, providing information, educating and forestalling confrontational behaviour, but also includes efforts to understand the needs, preferences and concerns of local communities and non-governmental organisations. Use a varied selection of platforms and channels for communication and stakeholder involvement, such as focus groups, opinion polls, formal progress review meetings, multi-stakeholder networks, websites with open forums, newsletters, canvassing of local businesses, community information displays, etc.
Collaborate and cooperate
Stakeholder involvement should be reciprocal. Take a proactive role and establish new types of relationships with regulatory stakeholders, including competitors. Aim to influence regulations and standards at the earliest opportunity where they affect their supply chain strategies.
Force a value-added, strategic and holistic approach
Consider the economic and social concerns of stakeholders strategically and accord top management commitment to them. Apply the concept of value-added at both financial and operational levels. This will lead to a different sustainable supply chain philosophy. Consider end-to-end supply chains as value chains, and think about unexplored resource inefficiencies and opportunity costs at the level of suppliers, channels, and customers. This will allow you to see regulatory stakeholders as innovation drivers, and will motivate the organisation to collaborate with regulators to shape incentives and develop sustainable supply chain solutions.
Activity 5: Identifying best practice in stakeholder relationships
Having reviewed the above analysis, you should now put these ideas into practice.
Watch the following videos from Whitbread PLC and Technology Will Save Us (TWSU). Make notes of where you feel that Brodie or Henry are discussing points that link to the best practises that were discussed earlier.
Whitbread PLC is the UK’s largest hospitality company, owning Costa Coffee, Premier Inn, Beefeater Grill, Brewers Fayre, Table Table and Taybarns. Whitbread has outsourced its entire logistics operations for Premier Inn and Costa. Brodie McMillan, Logistic Director at Whitbread, talks us through the very close relationship Whitbread has with its logistics provider, Keuhne + Nagel. Brodie explains some of the technology and digital systems that enable Whitbread to exceed 98% on time and in full deliveries. Brodie makes it clear that this arrangement only works because of the level of trust and openness between the two organisations. Initially, Whitbread asked logistics companies to tender for the work; Keuhne + Nagel were the successful bidders and the partnership has grown ever since, with both organisations investing significant capital into the partnership.
Transcript: Whitbread overview: Brodie McMillan
[ON SCREEN] Relationship with customers
[ON SCREEN] Delivering on time and in full
TWSU is a small business focused on inspiring kids and empowering parents to become creators of technology. With a range of ‘make it yourself kits’ and hundreds of digital tools and projects to support kids in learning though play, TWSU sells to more than 97 countries around the world. Henry Haslam, the Head of Production and Operations at TWSU, talks to us through the TWSU experience of international supply chain relationships.
Transcript: TWSU overview: Henry Haslam
[ON SCREEN] Relationships with customers & suppliers
Now write down some notes on:
- the extent to which you feel that these two organisations demonstrate good practice in stakeholder relationships
- how the different relationships discussed in the videos support the sustainability of each of the organisations.
There is no discussion for this activity.
With Activity 5 we have completed our review of the four perspectives. Now let’s pick up the learning from this course and apply the perspectives to your own context (that of the organisation that you work for or an organisation that you are otherwise familiar with).