Stakeholder engagement: a priority for the mid-market consumer industry

Thu 30 Nov 2023

The adage ‘the customer is always right’ is a staple of the consumer sector – and with good reason. Consumer demands are constantly shifting and, with it, so are their behaviours, aspirations and desires, all of which affect the triple bottom line. 

Sustainable transformation continues to be a growing trend in the sector: according to our annual C-suite barometer more than half (59%) of consumer leaders have budgeted costs for implementing sustainability strategies and reporting. While the customer stakeholder group remains at the centre of any consumer business transformation, leaders in mid-market businesses need to factor in a host of other groups too. The pressure can come from all directions, with regulators and even employees all pushing for change. The challenge then is how to communicate both the significance of the transformation, and the process if implementation, to such diverse groups.

Identifying the right people

The first step is identifying the stakeholders you need to engage. Teresa Beukes, a Partner at Mazars in South Africa highlighted “a business should have a clear idea of the transformation that they want to implement and what they want to get out of it. The next step would then be to analyse the stakeholders involved and clearly identify which ones contribute to it and need to be communicated with”.

Aidan Khoo, an Associate Director at Mazars in Singapore, agrees that getting internal alignment first is key. After the board and employees are on board, a business can begin to “expand the circle” of communication to external stakeholders, such as suppliers.

For a lot of medium-sized businesses, funders can be a driving force behind sustainable transformation. Emer O’Riordan, a Partner at Mazars in Ireland states that “many businesses will have private equity or some sort of bank funding,” she says. “Those funders are under pressure to have a more sustainable portfolio of investment, which can translate into pressure on the business to be more sustainable. Because of that, the funder is a very important stakeholder to consider.”

Communicating effectively with stakeholders

When it comes to successful communication, Aidan reminds us that the days of one-way, top-down communication are gone, and it’s important to develop a process of 360 degree feedback. “Employees and stakeholders are getting smarter and will often have their own feedback to share,” he says. “In the boardroom, you’re often not in touch with what’s happening on the ground in your business. Your employees, who are on the ground and experience the business differently, may well have a different sentiment about why a particular business strategy won’t work. Two-way communication is vital.”

When it comes to the relationship with the customer, Emer suggests mid-sized consumer businesses are at an advantage. “These are often family businesses that are part of the community, so there’s typically a very close relationship between the business and the customer. That means the communication process is often more informal. For example, there may be key customers that a business can specifically engage with. When you couple that with a shorter proximity between decision making and execution, change can be implemented very quickly.”  There are also pitfalls to that advantage: a business needs to be aware of its own bias, so it’s not simply just cherry-picking or looking for the answers it wants to hear.

Getting it right

Teresa adds that confirms that companies should remain transparent and open about the updates, decisions and insights on the transformation the company is undertaking, as well as demonstrating accountability for their actions.

Getting communication right can reap benefits for the business in a number of ways. “Getting buy-in from stakeholders and involving them in the decision-making process makes them feel a sense of ownership. This will lead to increased support whether that be increase in sales, investments, or partnerships.”

Aidan adds that “stakeholders are not mind readers and effective communication leads to a higher chance of success. Communicating, being transparent and having constant communication with your stakeholders allows them to have an insight into a business’s thought process and provides more inputs. If nine out of ten stakeholders disagree with a company’s strategy, then knowing this in advance enables a business to make an informed decision to change direction.”

To discover more on stakeholder engagement, please visit our dedicated area for privately owned businesses, which has a collection of resources to support you on your sustainability journey.

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