The Stakeholder 360:

Measuring The Quality

of Stakeholder Relationships

a few major accounts, government

What Is The
regulators, and major investors (e.g.,
Stakeholder 360? mutual or pension fund managers).

The Stakeholder 360 is a management Benefits and Features

tool for assessing and improving the
The Stakeholder 360 has a number of
quality of strategically important
unique features.
stakeholder relationships. This tool is
part of a comprehensive approach to The Stakeholder 360 provides
stakeholder relations offered by the independent, credible results that can
Centre for Innovation in Management be easily communicated to both
(CIM) in the Faculty of Business at Simon managers and stakeholder partners.
Fraser University.
The 360 provides companies with a
The Stakeholder 360 involves both diagnostic profile for each strategically
measurement and facilitated dialogue. important relationship. Because these
Managers and stakeholder 'partners' prof iles identify strengths and
both complete a '360' questionnaire. weaknesses in the relationship, the
The questionnaire is based on leading levels of trust, and both the causes and
edge theory and research relating to effects of relationship improvement or
social capital and the development of deterioration, they provide practical
s u c c e s s f u l i n t e r- o r g a n i z a t i o n a l guidance for managing the relationship.
relationships. Once the data has been
The profiles can be combined into a
collected, CIM facilitates a dialogue
weighted sum that allows comparisons
between managers and stakeholder
with other companies in the same
representatives to review the results and
industry. CIM intends to develop
explore opportunities for improving the
industry norms so that eventually the
relationship.
Stakeholder 360 can become an
This tool is ideally suited for use with a important part of how investors assess
company's stakeholders where there are the long-t erm sust ainability of
a limited number of critically important industries and individual corporations
people involved. These would include within them.
special interest groups (e.g.,
The 360 provides strategically relevant
international environmental and
information and a process for mutually
human rights organizations), marketing
beneficial engagement with
and distribution chain partners, major
stakeholders at a reasonable cost.
suppliers and subcontractors,
customers of companies relying on only
The Business Value of What is Social Capital?
Stakeholder Relationships
In the context of corporate-stakeholder relationships, social
Research shows that companies with positive stakeholder capital means:
relations are more profitable.
a) Talking - how much do the parties talk to each other?
The explanation is straightforward. In a turbulent, highly
b) Trusting - how do the parties trust each other?
competitive environment, the ability to meaningfully engage
critical stakeholders allows a company to innovate and c) Thinking - how much do they “see eye-to-eye”?
respond to changing external demands more quickly and
efficiently. This, in turn, reduces costs, creates advantages, In more theoretical terms, social capital can be described as
and provides the company with strategic insight, or foresight, having the following three dimensions:
that allows it to outperform its competitors. The result is value
creation. Structural Dimension (Talking)

While there are many benefits of good stakeholder Measurements on this dimension deal with the level and
relationships, two of the most important are in the areas of pattern of communication with the other organizations.
innovation and social license to operate. Communication is a prerequisite for progress on the other two
dimensions. Moreover, the position that a company or a
Innovation and Organizational Learning stakeholder holds in the communication network affects its
degree of prestige, power, and influence with other members
Building high social capital relationships amongst employees of the network.
by facilitating communication, fostering trust, and shared
understanding has been shown to spur innovation and Relational Dimension (Trusting)
learning. Conversely, in hostile, low-trust work places
The relational dimension of social capital deals with trust,
employees will hoard information, avoid collaboration, and
norms, and reciprocity. These concepts are all linked. This
display very low levels of creativity.
second dimension of social capital reinforces the notion that
The importance of social capital in relationships with external social capital is not the 'property' of an individual or an
stakeholders including suppliers, business partners and peers organization. Individuals and organizations draw on their
has also been shown to be critical for innovation. A recent study social capital with others in their networks; who they trust and
of high tech companies in Silicon Valley found that high trust who share a sense of reciprocity . If a member of the network
relationships between scientists facilitated the exchange of ceases to follow established norms and if trust and reciprocity
vitally important information and ideas. Often high social are withdrawn, social capital may be depleted or cease to exist.
capital relationships are the cost of entry into such external
innovation networks. Cognitive Dimension (Thinking)

The cognitive dimension focuses on the need for mutual

Maintaining Community Support and a Social
understanding and perspective-taking in goal-oriented
Licence to Operate
relationships. The most appropriate measures for the cognitive
Global corporations like Talisman, Shell and Nike have been dimension include basics like shared language and concepts,
targeted by environmental and human rights organizations or more advanced levels of mutual understanding, like the
over concerns about their operations in developing countries. shared values and visions for the future. Regardless of the level
Other companies like Hyundai have been unable to build new chosen, the cognitive dimension is always about
facilities in communities due to lack of local support. More and understanding each other goals and means of achieving them.
more corporations are coming to the conclusion that in order
to maintain their “social licence to operate” they must develop
positive long-term relationships with people in local
communities and with international environmental and
human rights organizations.

The Stakeholder 360 measures the level of social capital in key

relationships and gives managers the information they need to
prevent problems and to grasp opportunities that competitors
do not see.
Where Has the Stakeholder 360 Conducting a Stakeholder 360
Been Used? The Stakeholder 360 is customized to each situation.
The following outlines the typical core steps and procedures.
The 360 questionnaire was developed by CIM in 1999 as part
of a multi-year study of the evolution of relationships between Questionnaire
a forest company and a coalition of environmental groups in
British Columbia. The 360 was also recently pilot tested in Because it focuses on the relationship, the Stakeholder 360
Papua New Guinea. questionnaire collects perceptions from representatives of
both the company and the stakeholder organization. Most of
Background on Pilot Project in PNG the question are asked in a way that obtains a numeric answer
(e.g., rating). The mutual perceptions are then merged into a
In October, 2000 Placer Dome Inc. (PDI) asked the Centre for
score for the relationship itself.
Innovation in Management to conduct the Stakeholder 360 as
part of a sustainability planning process surrounding the Most companies also want to know why the relationships are
closure of a gold mine on Misima Island in Papua New Guinea in their current condition and what can be done to improve
(PNG). the ones that need work. For that reason, the “Why and How”
option follows each ratings with a request for the reasons
PDI and Misima Mines Ltd. (the operators of the mine)
behind the rating. Figure 1 shows the overall structure of the
wanted to:
core questionnaire.
• develop and maintain constructive relationships with
Misiman stakeholders, Scope and Range

• strengthen the capacity of Misiman stakeholders to In the first year, most companies choose to focus on one or two
initiate their own constructive action in adjusting to the key stakeholder groups. However, we suggest that steadily
socio-economic effects of the mine closure, and moving towards a fuller 360 by adding more stakeholders will
provide the most synergistic, and therefore beneficial, results.
• meet the social performance expectations of
international stakeholders (e.g., social justice and Implementation Steps
community development NGOs, socially responsible
The basic steps involved in conducting a Stakeholder 360 are
investment organizations).
as follows:
The first wave of the 360 has been completed. Over the next
1. Members of the CIM management team work with the
five years, the 360 will allow all Misiman stakeholders to have
senior managers to identify key stakeholder groups and
input into mine closure processes regardless of political power
issues.
or influence in the Misiman community, and will bring
Misiman organizations together so that they can plan their 2. CIM interviews managers who deal with the
post-closure future. In addition to measuring the level of social stakeholder organizations and gathers names of
capital, the first round of the 360 also asked stakeholders stakeholder representatives.
about their visions for the future of their community, current
realities and priorities for action . 3. Managers and stakeholders complete Stakeholder 360
questionnaire. CIM administers the field work using
In short, the company and its stakeholders are using the whatever methods are most appropriate. They might
Stakeholder 360 findings as a political roadmap towards a include in-person interviews, toll-free automated
sustainable future for the community. telephone interviews, or questionnaires implemented
through mail, e-mail, fax, or a password secured
“The Stakeholder 360 gives managers website.

and stakeholders information they need 4. CIM analyzes the data and writes a report.
to prevent problems and to grasp
opportunities that benefit both the 5. Option: CIM facilitates face-to-face or teleconference
company and the community.” follow-up dialogue sessions with stakeholder partners.
Figure 1: Structure of the Core Stakeholder 360
John Waterhouse, VP, Questionnaire
Academic, Simon Fraser University
 Figure 1: Structure of the Core Stakeholder 360 Questionnaire

Stakeholder Importance of Relationship

360:
Simpler, but less diagnostic
Core choose
Questions either/or
Requires better command of English

High vs. Low Stakes

Questions High vs. Low Interdependence

on
Motivation
to Engage Amt. of Contact with Organization
OK when comparison standard is obvious (e.g.,
comparing contact with several organizations)
Structural: choose
Talking either/or
Must be summarized to get inter-organizational
score from this inter-personal data.

People Contacted & Amount

(+) Shares Information Openly

Social
Relational: (+) Tells the Truth
Capital
Trusting
Questions (+) Keeps Promises

(-) Tries to Get More Than Deserves

Understand Way of Doing Things

Cognitive:
Understand What They Want
Thinking

Have Common Goals with Them

"Why
Follow each Social Capital question with probing for reasons
& How"
("Why") and suggestions for improvements ("How").
Option

Research Partners

In order to build social performance monitoring capacity, especially in developing countries, and to ensure cultural sensitivity in
the research process, CIM prefers to conduct the 360 in partnership with a regionally based research institution (e.g., a university
or independent research center).
Analysis

There are two types of quantitative data, the social network data and the ratings or rankings data. The former are treated with the
appropriate statistical techniques and translated into social network graphs (see Figure 2 for an example based on hypothetical
data). The ratings and rankings data can be presented on line graphs with the lines being extended for each successive tracking
wave (see Figure 3 for a hypothetical example).

Figure 2: Hypothetical Graph of Social Capital Linkage Patterns

STK 04
STK 06 STK 11
STK 01

CORP.
STK 10
STK 02 STK 07

STK 03 STK 05 STK 08 STK 09

Figure 3: Hypothetical Graph of Social Capital Dimension Scores

10
C o m m u n i c a ti o n
9
T ru s t
8
U n d e r s ta n d i n g & G o a ls
7

0
1 2 3 4 5 6 7

T im e P e rio d

Reporting

CIM provides the company with a detailed report and meets with the company to review recommendations. It is anticipated that
many companies will include the Stakeholder 360 results in their annual reports or social/sustainability reports. As more
companies use the system, CIM will also be able to report performance norms by industrial sector so that companies can gauge
themselves against peers and competitors, as illustrated in the sample graph to the right.
 The CIM Team

Ann Svendsen, Executive Director

Ernie Love, Dean SFU Business
Rob Abbott, sustainability strategy
Robert Boutilier, research and measurement
Gervase Bushe, organisational development
Carolyn Egri, leadership and management
Don Haythorne, facilitation
Myriam Laberge, dialogue and whole systems change
Mark Selman, learning strategies
Carolyne Smart, entrepreneurship
Richard Smith, technology and innovation
John Waterhouse, non-financial performance measurement
Mark Wexler, business ethics

360 Researchers

Ann Svendsen, Executive Director, CIM

Ann is an Adjunct Professor in the Faculty of Business Administration at SFU and President of CoreRelation
Consulting, a firm specializing in social research and stakeholder relations. For over 20 years, Ann has worked with
corporations and government agencies to forge stronger, more strategic, and profitable relationships with
customers, suppliers, employees, and community stakeholders. She has played a significant role in more than a
hundred complex and often contentious projects, bringing together representatives of diverse groups with
conflicting interests to develop new solutions and innovative policies and programs.

Dr. Robert Boutilier, Research Director, CIM

Robert is a recognized leader in developing innovative research techniques to bring the perspectives of customers,
employees, business partners, and citizens to private and public sector strategy development processes. In 1981 he
earned a Ph.D. in psychology from the University of British Columbia for work on the development of human
understanding of dynamic systems logic. His current research interests include measuring social capital, mapping
the interaction between global and local social networks, and assessing the quality of corporate stakeholder
relations. He has studied corporate stakeholder relationships in contexts ranging from the forestry industry in British
Columbia to the mining industry in Papua New Guinea.

For futher information contact:

Ann Svendsen, Executive Director

Centre for Innovation in Management
Faculty of Business
Simon Fraser University at Harbour Centre
7200-515 West Hastings Street
Vancouver, B.C. V6B 5K3
phone: 604-437-6112
www.cim.sfu.ca