The 4th Stakeholder Framework

Article 23

A Voice of Society Engine Part 3: Transparent Action

3-4 minute read

CAPSULE SUMMARY – As a final step, you need to resource and commit to a set of 4th Stakeholder priorities and communicate that action plan back to society.

23.1 We have covered the first two out of three legs of a robust Voice of Society engine: tuning and consolidating your societal listening posts (Article 21) and creating a dedicated 4th Stakeholder Prioritization Group which owns your 4th Stakeholder Impact x Responsibility Matrix (Article 22). In this article, we’ll introduce the third and final leg, which can be described by two simple yet powerful words: transparent action.

23.2 As we have discussed, the Impact x Responsibility Matrix captures the full realm of possible priorities to tackle and in what general order (recall the reverse zig-zag from Article 18). However, we have not discussed the process to explicitly commit tangible company resources to action. Tackling the priorities reflected on the IxR Matrix will require resources to be identified and allocated, funding to be secured, business models and financial plans to be adjusted, and more.

23.3 This requires merging your potential 4th Stakeholder Priorities with your broader business priorities in order to draw a clear cut-line on what you will commit to tackling and by when (How far down the zig-zag will you go?). This should not be a foreign or unfamiliar process, since the vast majority of companies have an existing process for prioritization and planning that spans across multiple competing demands. I’m not proposing changing that process—you simply need to ensure your 4th Stakeholder priorities get incorporated and balanced along with those other stakeholders (hence the term balanced stakeholders).

23.4 If your planning process is well defined and structured, it should result in a set of crisp and clearly scoped priorities: what will the company do, by when, and how will it measure success? (for anyone who needs assistance on how to frame priorities in this way, please refer to my separate leadership frameworks on prioritization here).  

23.5 Once those committed action plans are defined, the company needs to transparently publish and share those plans with society. Although it might seem foreign to publicly share internal plans, this completely parallels how we treat all other stakeholders:  your financial plans, forecasts, and strategy get communicated to shareholders; when you have customer issues that need to be fixed, you let your customers know how and when you’ll fix them; and if employees collectively raise a major issue, you will let your employees know the issue has hit your radar and will be resolved.

23.6 So what exactly does that societal transparency entail? This will vary widely by company, but at a minimum businesses should publish out a summarized version of their Impact x Responsibility matrix with specific details on what the company is actually doing and, just as importantly, what they aren’t focused on yet. Depending on your company size and sophistication, the specific communication channels can range from publishing on your public-facing web site, sharing directly with your customers and employees, sharing with press, and more.

23.7 There may be some priorities that are too sensitive for the company to publicly disclose for legal and liability reasons. Here, the business should just use its judgement in terms of what can be publicly disclosed, but should err on the side of transparency. Many potentially sensitive priorities will already be in the public sphere and therefore can be readily discussed (e.g. “we have a toxic chemical leak, we are now doing the following X things to clean it up and also prevent future chemical spills”).

23.8 Given the broad range of possible channels, I won’t attempt to define a specific template here. However, one simple question to ask yourself to gauge whether your approach crosses the transparency bar would be the following: “If any of our customers, employees, shareholders, or societal stakeholders wanted to understand our 4th Stakeholder priorities and commitments, is it clear where they would go to get that information, and are we doing a good job proactively communicating this out to them?”

23.9 I’ll end with a question that may be on your minds: why does transparency matter?  The simple answer: publishing the deeper thinking and prioritization around your 4th Stakeholder priorities clearly demonstrates that the business thinks objectively and critically about its societal footprint. It clearly defines what will and will not be a focus, reducing potential outside-in criticism and noise. And maybe most importantly, it creates public pressure and accountability to ensure the business delivers on its commitments.

END OF PART 4