Involvement with a Broader Community of Stakeholders

Most businesses have historically thought of their external communications and outreach activities as something dedicated primarily to existing and potential customers. And, maybe secondarily to investors, vendors, partners and a few other direct stakeholders. This makes some sense as previous generations of business lived with much more expensive communications costs and limited options.

For example, communications options like mail, in person meetings or broadcast radio/TV carried relatively high transaction costs and/or did not scale to broad or diverse audiences. So, in an era of expensive communication, it was easy to rationalize a selective focus on only a few key stakeholder groups.

This suited most businesses just fine as the mantra of business in generations past was often something along the lines of “The Business of Business is Business”. What obligation, then, did a business have to connect to the community where it was located or less still to a wider group of individuals impacted by its existence and operations?

All of this changed in the later part of the last century with the arrival of an open and democratized information exchange brought to us by the Internet and related technologies (web, mobile and social media). In this new era, it is virtually impossible for companies to hide behind a veil of silence or the occasional press release. The conversation about your brand and business is happening — your only choice is whether you want to have a voice in that conversation.

Today, sites like GlassDoor.com empower current and former employees to publish their salaries, air company dirty laundry and provide a whole host of sensitive information to the greater community as a whole. Review sites like Yelp and recently launched Tengrade.com allow anyone to virtually rate anything whether or not they are a direct stakeholder.

More progressive businesses have created senior level Community Engagement positions or even entire divisions dedicated to connecting with a much larger group of stakeholders. These forward-thinking organizations realize that transparency and proactive engagement not only builds goodwill, but is a type of insurance policy in the crisis-driven age of today.

The personal and business productivity guru, Steven Covey, popularized his metaphor of the “emotional bank account” to describe the nature of close, interpersonal relationships. The basic concept of the emotional bank account is this. Like a financial account, we can make deposits into and take withdrawals from the account. We make deposits through our empathy and integrity and we make withdrawals through our actions that lack empathy and integrity. It is much easier to make large withdrawals than it is to make large deposits. So, making deposits must be a continual effort.

While Covey originally proposed the idea of the emotional bank account for interpersonal relationships, research shows that these same concepts apply to the relationships that businesses have with their stakeholder groups. In their research published in the Journal of Business Ethics on June 2014 titled “Corporate Social ‘Irresponsibility’: Are Consumers’ Biases in Attribution of Blame Helping Companies in Product–Harm Crises Involving Hybrid Products?” Sergio W. Carvalho, Etayankara Muralidharan and Hari Bapuji discuss the concept of The Brand Familiarity Effect to describe this phenomenon:

The brand familiarity effect occurs when consumers’ knowledge and previous experience with a brand influence their evaluation of the quality of the branded product (Laufer et al. 2009; Stokes 1985; Teas and Agrawal 2000). Previous research recognizes that brand familiarity might act as a safeguard against the negative impact that bad publicity might exert on a brand. For instance, Dawar and Lei (2009) argue that when a crisis involves familiar brands, a considerable reduction of the effects of the crisis on the brand might occur due to the fact that consumers use memory-based, pro-attitudinal information to unconsciously defend their prior attitudes toward that brand. Conversely, on encountering negative information about an unfamiliar brand, consumers tend to respond less positively, primarily, because they have no pro-attitudinal information about that brand stored in memory and therefore evaluate the brand solely on the basis of the current crisis information.

Even if your organization cannot afford to dedicate an entire position to your community involvement, you still need to engage. Here are a few ways to do this without breaking your budget or being distracted from the core operations of your business:

1. Start with the Great Things Your Company is Already Doing

In most cases you and other members are probably already doing great things in your community as individuals. For example, your existing community involvement activities might include things like volunteering to coach little league or giving small donations to a local charity you choose to support. Types of community involvement you might already be doing (or can consider doing) include:

— Volunteering time

— In-kind donations of your product or service

— Cash donations

When evaluating potential community involvement activities, it is key to keep in mind two factors 1) the value to the recipient/community and 2) the value to your enterprise. For example, giving a cash donation may have higher value than volunteering time to the recipient. But, providing an in-kind donation has the same impact as cash (if it is needed by the receiving organization) but allows you to showcase what your company does best as a free means of marketing.

Whatever your existing community involvement activities may be, they provide a great starting point. Don’t be afraid to share these activities on your company’s website, email newsletters and in social media.

2. Consciously Design a Community Involvement Strategy

To have maximum impact, you need to spend a little time thinking strategically about which engagements in your community will fulfill multiple objectives at once. To form this strategy, you can ask five screening questions to evaluate potential opportunities to increase your community involvement:

— Is this opportunity in line with the values and priorities of our company?

In IDMLOCO’s community involvement we choose opportunities (serving on non-profit boards, for example) that are important to us. In my case the issues of education and domestic violence are important, in my business partner’s case it’s automobiles and economic development that matter. Whatever you choose to do doesn’t really matter, as long as it’s something you’re personally passionate about. The reason for this is simple: community involvement is hard work and often will require your personal sacrifice of time and money. Unless you love the cause, you won’t be effective and risk creating a negative reputation as a result.

— What stakeholder groups will this opportunity positively impact?

It is crucial to ensure that your community involvement is reaching the right stakeholder groups in the community. Some potential stakeholder groups to consider include:

  • Those in close geographic proximity to your physical operations/offices
  • Students at schools of all levels (K through higher-ed) in your area
  • Members of the media, bloggers and those with social media influence in your community
  • Elected officials and other influential members of the community
  • Members of your industry (peers, legal/regulatory officials)
  • Potential: employees, customers, partners, vendors
  • Watchdog groups or other potential critics of your company or its operations

— What is the cost to pursue this opportunity?

Every community involvement activity has a set of costs associated with it. You should absolutely make every effort to know ahead of time what this will be. Board service often means plenty of time spent fundraising, if not a direct financial contribution. Mentoring students may require many hours of your time without any direct payback. These experiences are often unfamiliar to the hard-charging entrepreneur who is used to very real results as an outcome to his or her direct investment of time or money. Avoid any surprises up front and you won’t need to make any embarrassing changes down the line.

— Can we measure and quantify an outcome as a result of our involvement with this opportunity?

While there are certainly costs associated with your community involvement efforts, you should be clear-eyed at the outset as to what outcomes this effort will produce. Brand goodwill and sales/business development opportunities are very often direct outcomes when you reach outside of your immediate set of contacts and connect with a larger community. But other unexpected benefits may arise from your community involvement such as product/service innovation; your community efforts can be an opportunity to test new products or services (especially if given in-kind). The IDMLOCO team developed our early mobile apps for non-profit clients with a low set of requirements and very forgiving timelines.

— How can we leverage social and digital media to expand the impact and awareness of our community involvement activities?

The wonderful part of community involvement is that it is almost always intrinsically valuable. The change you can make happen in your community and in others’ through your efforts can be profoundly rewarding. But, when selecting your options for community involvement you should keep in mind how social and digital media can support and expand the impacts of your investment. For example, the guys on our IDMLOCO team walk one mile in high heel shoes every year to raise money for victims of domestic violence. While the cause is serious, the tone of the event is intentionally designed to be fun with over 1,000 guys participating. Wearing heels is silly, but we play it up with costumes and lots of postings on social media to get maximum exposure for the event and our company’s proud participation in it.

3. Avoid Pitfalls in Community Involvement

As you begin to increase your involvement with the community, it is crucial to remember to stay humble as you do it. I recently sat in a focus group for one of our clients that is heavily involved in supporting community organizations through charity fundraisers and other fun and fancy events. To one person in the focus group, this just looked like they were having too much of a good time. This was objectively an unfair charge. But it was one person’s perception and an important lesson in how much you promote your community activities in social media relative to other content — and through what lens.

The reality in social media engagement is that you’ll never please everyone. It’s as the old adage goes “You can please some of the people some of the time, but you can’t please all of the people all of the time”. Keep this in mind as you amplify your community involvement activities through digital media. But do not use this as an excuse not to be involved in your community; the cost of non-involvement in this age is too high.

SUMMARY

  • The Internet, especially social review sites like Yelp.com and Tengrade.com, is forcing a new era of connectedness for businesses.
  • Involvement with a larger community is intrinsically rewarding, but also offers real benefits to businesses, especially in a time of crisis.
  • Investing in community involvement, if done with empathy and integrity, creates what researchers call the brand familiarity effect where individuals will react more favorably to a business with which they are more familiar.
  • You and members of your team are probably already individually doing some great things for your community. Start with these and share your successes with your broader community of stakeholders.
  • You have finite resources (time and money), so carefully evaluate each opportunity to engage with your community to understand the required investment and potential outcomes.
  • Don’t get too caught up in your community involvement to the exclusion of your core customers’ satisfaction.
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