Towards measuring stakeholder engagement

UNDER the Performance Governance System (PGS), following the adage — taken from the creators of the balanced scorecard, Prof. Norton and Prof. Kaplan — which states: “What you manage you must measure; and what you measure you then can manage,” Department of Trade and Industry (DTI) had to define what it meant by “stakeholder engagement.” It then had to find a proper measure for it.

First, DTI’s understanding of “stakeholder engagement.” Jeanne Pacheco states: “A stakeholder may be defined as any person — or group — who has an interest in the project or could be potentially affected by its delivery or outputs. Stakeholders may be existing or potential customers or end-users of the product, employees, suppliers, shareholders, or those that define policies or have financial leverage. Furthermore, stakeholders may be categorized into “groups” based on a number of factors including geographic boundaries or location, recognized bodies or institutions, income groups, land ownership or occupation, legal requirements, and real or perceived views of the issue under dispute.” This is quite a mouthful. But everyone should get the gist: That a stakeholder has — as the name suggests — some stake or broad interest in an enterprise, particularly one with a strategy map by which it pursues a transformation agenda.

Second, a stakeholder engagement rating: Again, Jeanne Pacheco states that “DTI adopted ‘stakeholder engagement rating’ as a strategic measure (or Key Performance Indicator) under the Department of Budget and Management’s (DBM) Organizational Performance Indicator Framework (OPIF) to achieve its key objective (or Major Final Output (MFO) under OPIF), and this is to ensure comprehensive and sound policies consistent with the nation’s best interest.”

Third, Jeanne Pacheco reports that “DTI used the classification for levels of (stakeholder) participation that the International Association for Public Participation (IAP2) had put forward, and it is as follows:

The advantage in adopting the above framework for measuring stakeholder engagement and participation lies in its source: An international body that has obviously been working on this specific topic. Furthermore — and this is of special interest — since stakeholder engagement had to be measured somehow, this framework has been used in other jurisdictions to measure what DTI (and obviously also DBM) was interested in measuring as well.

Given the above, and with clear proof that some homework had been done at DTI, “stakeholder engagement” as a strategic priority under PGS was also ultimately adopted as a Major Final Output (MFO) indicator under OPIF. The next task to undertake, after this approval in principle, was to come up with a “stakeholder engagement” measure, one “which measures the quality of policy interventions provided by the DTI, as required under the government’s Organization Performance Indicator Framework (OPIF).”

This task the DTI-Office of Strategy Management (OSM) under Jeanne Pacheco turned to.