Stakeholder Engagement in Government Organizations: Definitions, Barriers & Benefits

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Allison Hendricks

30 August 2022

Stakeholder Management

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What do government organizations need to know about stakeholder engagement? And why is it so difficult to modernize a stakeholder engagement program and actually get community members involved?

When it comes to government stakeholder engagement, it may not be easy, but it is worthwhile.

So, let’s explore stakeholder engagement definitions (specific to government), why stakeholder engagement matters for government groups, and common barriers to engagement.

What is Stakeholder Engagement From a Government Perspective?

Stakeholder engagement refers to the process of identifying, analyzing, and communicating with stakeholders, as well as providing them with opportunities to respond and participate. Other terms used to describe stakeholder engagement (especially in government) include public participation, community engagement, consultation, citizen participation, and citizen engagement. 

Councils, state governments, federal governments, and their departments often engage stakeholders at various phases of new projects, new policies, or changes to regulations. But there are other reasons for stakeholder engagement, too, like maintaining relationships with individuals or businesses that are critical to the organization’s processes.

So, who are the stakeholders? For government organizations, stakeholders can include:

  • Members of the public – Local residents, businesses, and employees
  • Internal stakeholders – Other departments, officials, employees, contractors, and regulators
  • External stakeholders outside of the region – People, governments, and businesses that operate or live in other councils, states, and countries.
Engagement in Practice: Supporting the Deployment of New Legislation 

Washington State Department of Revenue (WA DOR) is deploying new legislation called the Family Tax Credit program. This includes a program that is scheduled to go live in 2023 and will provide $1,200 refunds to low income residents. In order for the legislation to be successful, WA DOR needs to reach out to community-based businesses, associations, and other community outreach groups. These groups can help them bring awareness, education, and support to the people who are eligible for the credit by hosting forums and getting the message out. WA DOR is using Simply Stakeholders to manage their connections with these community groups (for example, YMCA) and to report on any interactions and where they occurred. 

Why Stakeholder Engagement Matters in Government

Aerial view of a community, showing houses, roads, green areas, and a lake.

For the most part, government processes, changes, and policies have (historically) come from the top-down. Even in democracies, those in charge (once elected) typically make decisions and implement changes — without necessarily consulting the citizens, consumers, and businesses that are likely to be impacted.

Fortunately, this is shifting and more government departments are realizing the importance of stakeholder engagement and public participation. Here’s why it matters:

  • To understand stakeholders’ needs – Listening to the public (and other stakeholders) can bring new information and perspectives to light that could help shape a policy or project so that it’s more valuable, sustainable, or effective.
  • To build and maintain relationships – By strategically engaging with key stakeholders, government organizations can create shared understanding, improve collaboration, and work more effectively.
  • To gain a social license to operate – The public may be more accepting of change (and even support it) if they have the opportunity to express their views and influence that change.
  • To work through conflict – Stakeholder engagement invites people to voice their disagreement and be heard in a way that’s more productive and less disruptive than a protest.
  • To bring more legitimacy to government actions – Through greater transparency and collaboration, governments can demonstrate their effectiveness and build greater trust.
  • To support principles of good governance – By involving citizens in the process, governments can be held accountable for making good choices and responsibly managing public resources.
  • To provide evidence of meeting regulations – Some governments or departments are required by law to get input from citizens and stakeholders.
  • To democratize decision-making – Through engagement, elected representatives can ensure their decisions accurately represent the views of the community.
Engagement in Practice: Strategic Transport Planning

The Kansas Department of Transportation uses Simply Stakeholders to manage their stakeholder engagements that relate to the Infrastructure Investment and Jobs Act (also called the Bipartisan Infrastructure Investment and Jobs Act) which was officially passed in late 2021. They are using the software to strategically engage with relevant stakeholders and plan out which projects to invest in over a 10+ year timeframe. An Advisory group with public and private sector representatives, will provide ongoing input into the process and be part of the wider consultation on projects that relate to the bill. All these consultations will be coordinated and tracked within the Stakeholder Management platform.

3 Barriers to Stakeholder Engagement for Governments

Stakeholder engagement is rarely smooth sailing. It’s important to be aware of the barriers that might come up so that you can anticipate any problems — as well as be realistic about what might be possible. The major barriers fall under three main categories.

1. Getting Started

For some governments and departments, strategically engaging with stakeholders isn’t yet part of their processes. There are a number of reasons for this, including:

  • Limited awareness – Some government organizations may not be aware of the importance of stakeholder engagement or how to incorporate it into their processes.
  • Limited resources – Some departments may not yet have staffing resources or budget set aside for consultation.
  • Lagging technology – If government departments don’t have access to the right technology or systems to enable stakeholder engagement, they may find it harder to get these processes off the ground.

2. Getting Engagement

Other government groups might have an existing consultation or participation process but are struggling to get engagement. This can be for a number of reasons.

  • People aren’t willing – This could be due to a lack of trust or a perception that their involvement has no real purpose.
  • People don’t understand – Limited government literacy or cultural barriers may stop them from participating.
  • People can’t get access – Accessibility issues could be due to disabilities, technology barriers, or lack of transport.
  • Limited trust – Previous poor experiences with government processes have led to low trust in the agency or in the value of participating.
Engagement in Practice: Managing Stakeholders that Support Advocacy

A number of Simply Stakeholders’ government customers operate as independent bodies that help others and use stakeholder engagement software to support advocacy campaigns. For example: 

  • Victorian Equal Opportunity & Human Rights Commission (VEOHRC) uses Simply Stakeholders to manage contacts that help support various community and DEI programs. For example, they might reach out to their large list of community GPs to let them know about a program that supports sex workers.
  • National Disability Insurance Agency – is the agency responsible for implementing the the National Disability Insurance Scheme (NDIS) which will provide more than $22 billion in funding a year to an estimated 500,000 Australians who have permanent and significant disability. NDIA use Simply Stakeholder’s Darzin platform to manage their relationships with key stakeholders including advocacy groups, service providers and other government agencies.In such a sensitive area, having good quality records of stakeholders and important interactions is crucial to success.

3. Getting With the Times

Citizen and stakeholder engagement has evolved a lot over the last few decades — but especially within the last few years. The digital era has brought about significant changes, like:

  • Everyday people can rally behind a cause – People don’t just consume content, they produce it. And anyone on social media can share their views with the potential to reach a large audience.
  • Two-way communication – We’re shifting away from traditional one-way communication and mass-broadcasts, and moving towards conversations, user-generated content, and online interactions.
  • Growing stakeholder expectations – Increasingly, stakeholders expect opportunities to participate in a way that works for them, and to have their contribution mean something.

These things are (in many ways) good for society and can lead to greater, more meaningful stakeholder engagement. But they do present a challenge for government departments that are operating under traditional stakeholder engagement methods and outdated technologies.

Overcome the Barriers: A Good Starting Point

Fortunately, there’s plenty you can do to tackle the above barriers and increase the likelihood of successful engagement. 

For a start, using software like Simply Stakeholders can help, with practical tools that make it easier to analyze stakeholder, track communication, report on activities, and more.

In our next blog, we dig deeper into the topic with 8 Strategies for Successful Community Engagement in Government.

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