Effective stakeholder engagement is essential for ensuring alignment, support, and successful execution in any organisation-wide transformation.
However, when engagement efforts are superficial—characterised by minimal communication, one-sided feedback mechanisms, or lack of transparency—organisations face significant risks that can undermine the transformation’s objectives.
Meaningful stakeholder engagement builds trust and buy-in, while superficial efforts can lead to misalignment, resistance, and long-term reputational damage.
Resistance to change
Stakeholders are more likely to resist transformation initiatives when they feel excluded or undervalued. Superficial engagement often results in conveying information one way rather than fostering a collaborative environment where concerns and ideas are shared.
For example, when McDonald’s began restructuring in 2015 to simplify its business model, the initial lack of transparent communication with franchisees led to dissatisfaction and resistance among a crucial stakeholder group.
Effective engagement would have given franchisees a clearer understanding of the transformation’s benefits, thus reducing resistance and building support.
Misalignment and lack of clear vision
Without genuine engagement, stakeholders may have an unclear or inconsistent understanding of the transformation’s vision, goals, and expected outcomes.
In 2020, the UK grocery retailer Sainsbury’s faced backlash from employees when it announced restructuring plans that included job cuts and operational shifts. The lack of comprehensive engagement and clarity around the transformation’s purpose led to employees’ confusion and demotivation.
Meaningful engagement activities, such as regular town halls, workshops, and clear communications, help ensure all stakeholders understand the transformation’s intent.
Project delays
When engagement is shallow, valuable feedback from stakeholders that could mitigate operational risks or improve processes is often missed.
This can lead to delays, inefficiencies, and heightened project risks. An example is the UK’s Universal Credit programme rollout, a welfare reform effort that faced delays and challenges. Insufficient early engagement with stakeholders, such as local councils and social service providers, led to issues with the programme’s design and implementation, resulting in delays and considerable costs.
Incorporating stakeholder feedback and expertise can prevent such risks by ensuring that all practical concerns are addressed early.
Damage to organisational reputation
Superficial engagement can damage an organisation’s reputation, especially if stakeholders feel their views are disregarded, or their interests are not respected.
Boeing faced significant reputational challenges after failing to properly engage regulators and airline customers regarding safety concerns with its 737 Max. Although this example involves regulatory stakeholders, it underscores the importance of transparent, two-way engagement in maintaining stakeholder trust.
A genuine commitment to stakeholder engagement strengthens trust and enhances credibility, especially in transformation contexts.
Missed opportunities for improvement
Stakeholders often have insights that can improve the effectiveness of transformation initiatives. Superficial engagement risks missing out on these valuable perspectives, which can lead to suboptimal outcomes.
When Tesco launched its Fresh & Easy chain in the United States, it did not sufficiently engage with local stakeholders to understand customer preferences.
The lack of meaningful engagement contributed to the chain’s failure, resulting in a costly exit from the US market. Deep, continuous engagement could have provided better insights into how to adapt Tesco’s strategy to the local market.
Best practices
To mitigate these risks, organisations should adopt best practices for stakeholder engagement, including:
- Communicate transformation objectives, timelines, and potential impacts openly to build trust.
- Establish feedback loops for stakeholders to express concerns, ask questions, and provide input.
- Continuous engagement from the start of the transformation helps stakeholders stay aligned and supportive.
Superficial stakeholder engagement introduces significant risks to organisation-wide transformations, from resistance to reputational harm.
By embracing meaningful engagement that includes transparency, two-way communication, and continuous feedback, organisations can foster trust, reduce resistance, and successfully realise their transformation goals.