Why Outrage is the Biggest Risk
to Major Projects and How to Avoid It

by Futureye Managing Director Katherine Teh

Social licence risk has increased as a result of the government stimulus designed to kick start an economy battered by the COVID-19 pandemic.

A cash injection and political momentum is good news for the economy, but the current approach of reducing red tape, increasing technical efficiencies and shortening timelines is likely to backfire as communities recover from the social and economic consequences of the pandemic.

Governments are incentivised to deliver an immediate stimulus to the economy and businesses are eager to recoup their losses. However, the pressure to fast-track projects is counter-productive and often antithetical to communities that expect genuine involvement in decision-making, increasing the perception that their interests have been underestimated, undervalued or simply ignored.

With more than $7.5 billion in infrastructure investment fast-tracked this year alone, community opposition is one of the biggest risks facing Australia’s economic recovery.

When communities are opposed to a project, they react emotionally and do whatever they can to challenge it

Buy-in begins with strategy and culture

To create community support for infrastructure, the first step must be to ensure project directors have a social licence to operate mindset. This must also be reflected in the strategy, implementation and organisational culture of the project.

The benefit of this mindset is that it enables a strategy and culture that addresses not only the technical issues, but also the emotional issues related to the project.

The strategy needs to create alignment between all units and areas within an organisation to ensure outrage risks are managed effectively. Therefore, to understand the strategy and its context, a mindset that understands the purpose of a social licence is crucial.

This helps develop and deliver a consistent approach to resolving, engaging and communicating about community concerns within the organisation and, if relevant, within and between multiple organisations such as government stakeholders and sub-contractors. Ideally the internal alignment should be completed first.

Engagement and communications need to be layered for transparency

Delivering the strategy requires layering communications and engagement in a way the reflects the needs of the audience. It requires the engagement process in addition to the content to reflect the needs of the audiences for which they are intended.

While society today may demand more involvement, there is also evidence of consultation fatigue. In this scenario, meaningless engagement can be at best a waste of time and at worst counterproductive or even damaging.

The first and most important step is to understand who needs to be engaged and what level of engagement is demanded by the community. The appropriate processes and content can then be developed.

The second layer of communication required is to make the process of engagement and involvement completely transparent and navigable for all potential stakeholders. This includes people who are highly involved or attentive to the issues, those interested to learn more as well as the general public.

The objective is to ensure that all stakeholders understand how they can become involved in the engagement process should they choose to, rather than simply being told a process is taking place. This helps avoid ambiguity that may occur as a result of top-down communications that serve a technical purpose, rather than a community engagement purpose.

While not everyone may choose to participate directly, communications still need to give people a sense of what matters and why, what is and what is not resolved and why, and what is being done to resolve it.

Genuine, proactive engagement with stakeholders and local communities can prevent opposition from germinating and, if undertaken with outrage as a primary consideration, avoid activist activity

Trade-offs need to be determined in a collaborative, multi-stakeholder processes

This element involves working closely and collaboratively with all key stakeholders to build trust by understanding and responding to underlying interests and values and integrating them into project design and implementation.

Trust needs to be established at the beginning. Trust is a cumulative effort earned over a long period of time, costly to rebuild and very difficult to introduce at a later stage.

When concerns or differing expectations are identified, they need to be considered through multiple perspectives and interrogated in a way that all parties can understand and accept each other’s position before agreeing to the trade-offs. The approach, as well as the outcomes, can then be communicated.

Implementation needs to begin at the foundation of the decision

Implementation of a social licence to operate model needs to begin before any infrastructure decision is being contemplated. This ensures that insights from the community are taken into account, potential pathways for resolution are identified and it allows the community to feel it has been genuinely consulted.

Engagement about a decision after it has been made does not lead the community to believe it has been consulted. Instead, it will likely feel it has been told.

Consistent approaches build trust throughout the process. Genuine, proactive engagement with stakeholders and local communities can prevent opposition from germinating and, if undertaken with outrage as a primary consideration, avoid activist activity.

To do this effectively, it is important to enable the implementation team to have authority to either negotiate with the community or escalate issues to authorised decision-makers to be resolved as soon as possible. This ensure the risk of opposition is constantly defused.

People’s intelligence and capacity to manage complexity must be respected as a means to earn trust

Relationships need to be developed and maintained

Genuine community and stakeholder involvement to inform and resolve issues needs to continue throughout the project lifecycle. This requires ongoing relationship development that is monitored consistently and leveraged for the purpose of strategic development, instead of solely for the purposes of communication.

This is a fundamental cultural issue for the organisations involved. It is not the responsibility of a community consultation person or team because the upsides and downsides of social risk will be felt across the project. The philosophy, understanding and acceptance of community engagement must permeate the entire organisation.

Legacy needs to be of value

Considering and working toward a long-term role of the project in the community and its lasting, positive impacts should be an important element of gaining and retaining community acceptance and support. This is not only a matter of legacy, but of shared value to the community in a way that accounts for their current needs and future aspirations.

Communities should feel that infrastructure is developed for them, not in spite of them and have ownership of the benefits. To achieve this, engagement processes need to enable communities to identify the positive impacts of any development and articulate the lasting value to the community.

Conclusion

We are witnessing a once in a lifetime opportunity to remodel major projects for the benefit of society. It is not enough to assume that projects delivered on time and on budget is enough to win stakeholders, with the benefits being decided using a top-down approach.

People’s intelligence and capacity to manage complexity must be respected as a means to earn trust. Gaining community understanding and acceptance of the issues, along with the opportunities and benefits that flow from the solution, sets the scene for a constructive debate on the options.

Understanding, respecting and engaging with community views early and often is, from a strategic point of view, fundamental to a project’s social licence to operate. Doing so will enable the productive deployment of capital in a way that connects the needs of communities with the success of major projects.

ICCPM Webinar

Futureye Managing Director Katherine Teh will be speaking at the ICCPM Webinar Mitigating Outrage-related Risks and Building a Social Licence. She will provide practical insights drawing from her long experience in de-risking project approvals and implementation by developing sound social licence strategies that reduce political risk through either eliminating or mitigating activism risk.

This webinar will explore how a social licence approach can futureproof your project.

  • Understand what social licence is
  • Evaluate real case studies to understand the impact not considering social licence can have on your project
  • Explore practical ways of managing social licence risk

See the webinar page to learn more and register.

ICCPM WEBINAR

About the Writer

Futureye Managing Director
Katherine Teh

Katherine Teh is the Managing Director of Futureye, whose social licence to operate methodology and problem-solving approach has made organisations more successful in an era of quickly shifting community expectations and instantaneous communication. She has extensive experience in de-risking project approvals with examples to share from Gorgon, BP, BHP and others.