One of the great strengths of social businesses is that they engage in ownership and influence a wider range and a greater number of stakeholders and members than most businesses of similar size.
The relationship between a social enterprise and its stakeholders
Membership engagement is good for stakeholders as it gives them a form of 'vote'. It is also good for the social business if it succeeds in mobilising those stakeholders to take on the corresponding responsibilities and make a positive contribution to profile and performance. The relationship between the stakeholders and the social business can be critical.
To this end, effective social businesses plan to maintain and continuously improve the positive engagement of their members and stakeholders, setting an aim of empowering them to contribute to good governance, ensuring a range of input before strategic decisions are made. This helps get those decisions right and means that when those decisions are implemented as actions, the authority of the whole organisation is behind them.
This, in turn, means that support is easier to mobilise and translate into strong and consistent promotional messages. The very fact that the organisation is seen as an effective democracy pursuing a coherent business strategy will make it easier to recruit further supporters.
How do you engage stakeholders and members?
The starting point might be to ensure that the obvious barriers to engagement are addressed. If the current strategy for engagement consists of occasional invitations to long, boring meetings this might require large scale rethinking.
The access strategy should be reviewed to ensure that it deals with access not only to services and employment but also to participation in membership and governance. Similarly the Equal Opportunity Policy and its implementation strategy can be reviewed with regard to psychological and cultural barriers.
The governing document itself might be regularly reviewed to make sure that it 'keeps up' with the evolution of the organisation and allows for the proper representation of the stakeholder groups with which it is seeking to engage and the mechanisms it might allow for reference groups, consultation processes and forums to be established.
Governance challenges for social enterprises
The most frequent cause of disenfranchisement and alienation is lack of information and understanding. The communication strategy is key here. Communication is partly about giving out the positive messages but it is also about ensuring that members and stakeholders fully understand the organisation with which they are engaged and this may require explanation of legal structure, management structure, key policies and business model either in the form of some sort of 'handbook' or induction training or both.
Ways to involve stakeholders in social enterprise governance
A social business has people within it who will look at business development from slightly different perspectives and it is a good idea to mobilise these different resources to make up a good engagement strategy.
The marketing people will want to look at how they can make relevant people and/or organisations aware that a membership or stakeholder role is available to them, then explain to them what that is and further how it might benefit them. Finally, how the process of coming in from the outside or from low levels of engagement can be made as simple, stress-free and enjoyable as possible.
The human resources development department will want to look at the roles and responsibilities of members and stakeholders. The department should make sure that advertisements for such individuals is clear and in the right place, there is a contract ready for them to sign, and they have received appropriate training and support.
The quality assurance people will want to find measures of engagement and ways of monitoring how well it's going, they will certainly want to make sure there is a mechanism to review performance against targets to avoid the whole strategy being forgotten completely.
Broadly, the more the key players within the social business are engaged in thinking about how important this area is for organisational effectiveness, sustainability and growth, the more likely it is that it will be addressed consistently and well. It is not an area that is addressed easily by sporadic interventions without substantial management buy-in.
Once you’ve established how to effectively engage the stakeholders and members of your social business, start thinking about providing control and oversight.