Three Reasons Why NGOs Have Lost Some Attractiveness as Partners for Companies

During the May 7th webinar, Robert Blood from SIGWATCH, along with Chris Coulter and I, discussed the changing place of NGOs in the mix of strategic stakeholders (click here for the full recording and presentation slides from the webinar).
As Chris proved, stakeholder engagement has solidified its position as a strategic management tool for companies that are serious about thriving in our overpopulated, uncertain and volatile world. He convincingly made the case that there is an expectation that these collaborations with stakeholders should go beyond the traditional business-NGO partnerships. I could not agree more, nor could our panel of experts who contributed to our recent study with SustainAbility:

Also, from a business perspective there is good reason to re-evaluate the role and value of collaboration with NGOs. And, to be clear, this is not driven by a change in the credibility of the NGOs, which remains high.
In my mind there are three reasons why NGOs have lost attractiveness as partners for companies.

1. NGO engagement comes with an ever-more demanding set of strings attached.

As result of disappointing collaboration experiences in the past, NGOs place ever-increasing conditional demands on new initiatives, thus making it harder for companies to set up meaningful collaborations. The reality is that NGOs have hardly anything to negotiate with or to trade in a collaboration, but they have a lot to lose in terms of their credibility and this in turn underpins their funding model. For NGOs to even be seen as negotiating with companies can thus compromise their reputation and their credibility.
Furthermore, companies have learned that collaboration with an NGO on one topic does not reduce the risk that the same group will try to trip them on another topic and thus they have become cautious.

2. Companies have a better understanding of the relative influence NGOs have on their license to operate.

In the past, companies and executives were afraid of NGOs and have therefore overestimated their influence. These days, companies have learned to look beyond the nuisance factor and have become more sophisticated in determining the long-term impact of NGO pressure, and have developed, often in co-operation with industry associations, ways to address these pressures.

3. The emergence of other stakeholders more willing to constructively engage with companies.

The internet has made it easier and more cost effective to engage with a wide range of stakeholders, including customers. Combined with the trend that stakeholders are more likely than ever before to act on their beliefs, it becomes clear that companies willing to engage with the broader society have options beyond NGOs to ensure societal concerns and ideas are heard and collected as strategic input.

Let me close by focusing on one of these groups. Over the last four years we have conducted in-depth research into consumers in collaboration with New York-based brand agency BBMG. This research led to the identification of a growing group of consumers (currently some 38% of the global population) that is eager to engage with companies and which is hugely influential amongst its peers. We have called this group The Aspirationals. They are pro-consumption, pro-style and are concerned about sustainability. Aspirationals do not accept trade-offs. They want quality, performance AND sustainability. What makes this group so attractive to businesses is its size, demographic profile and its influence. And, contrary to NGOs, Aspirationals are more open to business messages and have a deep desire to engage and be part of the “tribe”.
However, companies wanting to engage with Aspirationals need to adhere to two clear rules:

  • Aspirationals do not want to be communicated to, or even just listened to. Driven by their desire to create transformational change, they are looking for a deeper collaboration, one in which they can really contribute.
  • Aspirationals are image-conscious and tribal. Companies who want to build a lasting relationship with them will need to give them formal status and make it easy for them to share their engagement experiences with others.

In conclusion, I believe that the corporate-NGO relationship has matured, has become more realistic and is more professional now than it was a decade ago. Both groups have a more grounded understanding of what a constructive relationship entails and can offer, which I think will lead to more effective collaboration in the future.
This post was written by former GlobeScan Senior External Consultant, Peter Paul van de Wijs.