Social Licence to Operate : Back in the Day!
In 1970, the economist Milton Friedman famously stated that:
The business of business is business.”
Explicit within this well-known quotation is the notion that an ethical business needs only to make profits and to obey the laws of the land. No other effort was required of a business in order to fulfil its real and perceived obligations.
But then it changed
New Relationships
Typically, stakeholders can either trust or reject an organisation. If the relationship is one of rejection, it is characterised by high involvement in the form of confrontation. The organisation has negative licence to operate, and so stakeholders seek it to deprive it of its reason to exist.
Consumers will boycott products, or citizens will stage service delivery protests. Social media usually plays a distinctive role in this too. This is an organisation’s worst nightmare. It has no “deposit in the bank” and it is continually reacting to the campaigns and behaviours of the stakeholders.
When high levels of trust exist [strong licence to operate] the relationship is also one of high involvement, but here there is collaboration, joint problem solving and high levels of transparency. In my practice, I find that I am called in when the relationship is on the rejection side of apathy and deteriorating further. Often a trigger event has set off a negative spiral in the relationship. This makes it so much more difficult to create a licence to operate.
In both the Confrontation and Collaboration modes, there is high negative or positive psychological engagement; whereas in Apathy mode there is little psychological involvement. The process of stakeholder engagement is designed to improve positive psychological involvement in the minds and perceptions of important stakeholders. Striking the right note
The structures and processes supporting the licence to operate should not be defensive, risk management tools. They should create a new relationship between business, government and society. Business, government and civil society owe their future wellbeing to more fully embrace the quest for a respectful affiliation. We are, indeed, living in a time when the business of business is everybody’s business.
James Forson is working with Synergy, Boréalis’ partner for the South African market. To learn more about managing social and environmental data in order to improve stakeholder engagement activities, don’t hesitate to reach out and contact us today!
About Boréalis
Boréalis online stakeholder engagement software is used by organizations around the world to successfully engage stakeholders and secure social license to operate in a wide range of industry sectors. To request a free custom demo of our software, contact us.
