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Mind the Gap: A retailer’s redemption

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in Centerpiece,Leaders & Managers,Leadership Skills

When protesters targeted the Gap, accus­ing the company of ignoring child labor practices in Cambodia, the company realized it needed a new way to interact with critics.

How it turned around its tarnished reputation by engaging stakeholders:

1. Gap drew a “stakeholder map,” listing and ranking stakeholders by sa­­­­­lience or importance. Prioritizing allowed the Gap to focus on relationships with the most influential groups.

The exercise served another purpose, as well: It helped internal team members understand the key stakeholders and the value of engagement. Gap began to meet with stake­­holders to get advice.

One meeting with Lynda Yanz of the Maquila Solidarity Network, a workers’ rights group, led to a critical insight: Gap managers decided they’d been mistaken in trying to “go it alone” in their efforts to improve labor conditions and began developing partnerships.

2. Gap identified the most important social issues that the company and its stakeholders faced.

3. Gap defined objectives, based on stakeholder input. Increasing transparency became a top priority, which led to the publication of Gap’s first social re­­sponsibility report in 2004, an enormous success in terms of positive impressions and as a call to action.

4. Gap resolved issues collaboratively with stakeholders. Prior to the new approach, Gap replied to stakeholder input with canned responses, which only infuriated people more.

The new tack allowed stake­holders to contact Gap’s global partnership team directly if they saw problems emerging. That let Gap to resolve issues “below the radar screen,” rather than in public.

5. Gap made it stick. Some stakeholders initially dismissed Gap’s efforts as PR spin. But over time, Gap’s engagement strategy has improved perceptions.

— Adapted from “How Gap Inc. Engaged With its Stakeholders,” N. Craig Smith, Sean Ansett, and Lio Erez, MIT Sloan Management Review.

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