Understanding the importance of stakeholder engagement will help executives not view it as a burden, a box that needs to be ticked, but rather as a relationship-building tool. When done right, this tool can transform their business by accelerating growth while making a positive social impact and having a built-in “early warning signal” to dissent. Stakeholder engagement, also referred to as community engagement, is important because it builds relationships between companies and communities, fostering goodwill and building trust.
How does community engagement spur corporate growth? First, it mitigates risk. Companies that can anticipate issues are in a better position to manage them. By engaging with communities and other stakeholders early through direct dialogues, businesses can glean insights that inform strategy and decision making. Leveraging capital effectively and equitably is challenging when business leaders’ goals are not aligned with their stakeholders. Decisions made with communities in mind, allow projects to garner more support with less backlash and litigation, in turn saving money as US companies on average spend 166% more on legal fees compared to their global counterparts.
Community engagement benefits public and private entities alike. As violent crime has been increasing nationwide, with a 30% increase in homicides between 2019 and 2020, public safety initiatives are a priority for local governments. Local leaders that want to launch effective and successful initiatives will find that it is in their best interests to listen to what their communities have to say. By connecting with stakeholders, leaders can better understand the pain points and needs of local residents. In turn, when communities feel like they are a part of the process, they will be much more supportive of the initiatives.
Advancing equity, especially for communities that have been long underserved, can also be accomplished through authentic community engagement. One industry where this is particularly important is healthcare. Decades of top-down policies have resulted in dramatic disparities in the quality of healthcare between communities of color and their white counterparts. In addition, there exists a deep mistrust by Black and Latinx communities who have been historically exploited and mistreated by medical institutions. Direct community engagement can not only mend medical mistrust, but can also uncover social factors, such as lack of transportation or insurance, that hinder access to quality healthcare. These insights can help healthcare companies formulate more inclusive and equitable strategies, ultimately moving closer to health equity.
Engaging communities can no longer simply be an afterthought. For leaders to thrive, they will have to be accountable to their stakeholders – both internally and externally. Doing so requires real transformational change, and Ichor is here to help navigate that change.
With a bespoke approach, decades of corporate and public sector experience, and a diverse team that gives us a unique perspective in the space, we empower leaders to build richer, more inclusive cultures, collaborate more closely with the communities that rely on them, and ultimately get more impactful results. Ichor is the unparalleled choice of partner for your business.