For years, the best operators that ran the largest and most complicated projects had a secret weapon in their arsenal. It wasn’t the obvious skills wielded by the project management professionals or the skill competency of the technicians or the negotiation finesse of the business development team. It was effective stakeholder management. But times have changed, and traditional techniques are hamstrung. “Fringe” stakeholders now unite and gain access to power, stakeholder decisions are increasingly influenced by their executive peers, and social channels force a transparency that can often be counterproductive.
If the project leader wants to be wickedly effective, they can no longer “manage” their stakeholders. It’s time for stakeholder optimization which implies leveraging everything you can from everyone that can influence your project.
A Fast Primer on Stakeholder Management
To fully appreciate the evolution of stakeholder success, let’s quickly review what’s taught in business school. Simply put, the larger the projects you run, the greater the number of people who are impacted by your work, and the greater the number of people who can influence it. These people are your stakeholders – some of them will want to help you while others can undermine you, which can bring your projects to a screeching halt. When you treat your stakeholders well, they can ease your path to success. When you fail to consult them, ignore them, or take them for granted, however, they put obstacles in your way.
Stakeholder management is the process that you use to identify the key stakeholders in your projects and then win their support. Once you know who you need to get support from, you can develop a clear plan to ensure that you get it and can achieve your objectives.
When people think of stakeholders, the most common groups that come to mind are customers, suppliers, co-workers, and shareholders. But, there are many other groups that you need to consider when identifying your stakeholders. A solid framework starts with the question, “Who has the power, whether direct or indirect, to affect or influence this project?” By answering this question, you can determine:
- Whose opinions matter?
- Who’s likely to support your efforts?
- Who’s likely to object or put up obstacles?
- Who can help you gather necessary resource?
- Who you should be communicating with on a regular basis?
- What types of contingency plans you should have in place to gain or maintain stakeholder support?
Now that you know who your stakeholders are, you need to decide which of them will be most pivotal to the success of your project. Your time is a limited resource, so you need to think strategically, and spend the most time and effort on the people who will have the largest impact on your project’s success.
When prioritizing your stakeholders, the higher the power and/or the interest of your stakeholders, the higher the priority you should give to managing your contact and communication with them.
Next, let’s look at how you should manage stakeholders, based on where they fall on the grid:
- Manage closely (high power and high interest) – these are the people you need to be engaging with continuously. Try to stay current with them at all times.
- Keep satisfied (high power and low interest) – here you have to balance your efforts against a nuisance factor. Be persistent but not pushy, and be aware of the cues these people send you regarding how much contact is too much.
- Keep informed (low power and high interest) – these people can be counted on for moral support and motivation when things aren’t going so well. They can also be the ones who put doubt in your mind. Keep them in the loop, but don’t focus your energies on them.
- Monitor (low power and low interest) – monitor these people. Their power and interest position may change.
The Power/Interest Grid shows you who you should be communicating with, and the level of effort you should put into the relationships. But it doesn’t show you how you should expend that effort. To figure that out, you need to create a communication plan. It’s a critical step, as you must determine both the content and the medium in which to communicate and you must develop a separate plan for each stakeholder persona. After all, a critical vendor and your board members both may be in the “Manage Closely” quadrant but the content, of course, would be very different.
So figure out what message you want to send to each stakeholder persona that persuades them to support you in the way, and with the means, you desire. Essentially, this is the benefits section of a sales pitch. What will you say to persuade someone to assist you?
- Why should they support/help you?
- What’s in it for them?
- How will they help you or the organization?
- What support you’re willing to provide in return?
- How will you communicate? How often?
- How will you monitor your progress?
- What will you do to evaluate your success?
- How will you convince people who aren’t on board?
- How will you raise stakeholder interest?
- What type of follow-up will you use?
- How will you keep stakeholders engaged?
Take careful consideration when picking how you communicate with each stakeholder. I’ve seen teams (okay, it was me) develop intricate, informative and even beautiful online reports updated multiple times per day. The rationale was proactive, “if you need to ask me the status… I failed.” Unfortunately, it did fail since the board members were never going to go online to view the report. They were too busy and simply wanted a quick and very brief email once a week.
Now that you got the general concept, let’s explore why stakeholder management needs to evolve so practitioners can remain effective.
Times, technology and transparency requirements have changed, and pressures have been coming not only from primary and secondary stakeholders, but also from general social trends and industry expectations. Traditional stakeholder management including even the most sophisticated communications plan may not suffice. The literature on stakeholder theory, which has accumulated for 20 years now, holds several clear-cut lessons for today’s leaders.
Nuances When Identifying Stakeholders
One unexpected finding from the research is that executives are now guided in their decision making by the influence of their peer executives more than by the principles of their functional areas. For example, accounting executives should be guided by the principles established by the National Accounting Standards Board, and legal executives should follow the standards of the American Bar Association. On the contrary, regardless of the functional areas in which these individuals began their careers, by the time they reach executive ranks, they are swayed much more by the values, beliefs, and attitudes of their peer group. When developing the stakeholder personas, you should seek to understand the peer group sentiment about the project you are undertaking. How does that influence your communications plan?
Earlier, I wrote that the basic teachings recommend leaders respond primarily to powerful stakeholders with legitimate, urgent claims. Although this approach might seem effective, it still behooves them to ensure that they are not ignoring the demands of “fringe” stakeholders who, although lacking in power, may have urgent, legitimate claims that they can pursue by banding together. I’ve seen this many times where large groups have wielded massive influence leveraging Facebook groups where their voice was amplified and they could marshal their forces. Ensure you identify these “fringe” stakeholders, preempting their concerns, and generating innovative responses to them. You must develop the capacity to empathize, listen and communicate with them using their preferred medium.
Building Trust with Stakeholders
When determining “what” should be communicated, surprisingly transparency seems to have little relevance in terms of building stakeholder trust. That is, whether projects disclose information may have little effect on their perceived trustworthiness. In fact, of the various factors studied, transparency was the only one that did not affect trust for any stakeholder group. Whether information is disclosed might matter less than what is disclosed. Clearly, nobody wants to be “in the dark” but people don’t all demand the same kind of information. Internal stakeholders, such as employees and investors, might look most for evidence of managerial competence (your ability to lead the team, control costs, etc.). External stakeholders, such as customers and suppliers, typically care less about managing your team and more about your ability to deliver a high-quality solution. This further emphasizes that you should create specific updates and content per persona and possibly per individual stakeholder. Communication must be pursued with surgical precision to have any hope of optimizing support.
Not surprisingly, perceptions of honesty and integrity are crucial to trust for all stakeholders, especially for people who engage with an organization on a regular basis. These “high-intensity” stakeholders also must perceive that the organization cares about their well-being. In other words, benevolence toward the individual, not just good character and fair dealing, is critical. This can be tricky, however, as building trust with one group can destroy it with another. Managing trust is a complex process because stakeholder groups have different needs, and efforts aimed at solving one trust problem can exacerbate others.
The core of stakeholder management attempts to mitigate risk, manage expectations and optimize communication. It’s about control. Unfortunately relying simply on control when there are so many additional variants of stakeholder with different informational and emotional needs creates a level of complexity that will be distractingly difficult to manage. I’m not suggesting you shouldn’t thoroughly analyze and create detailed plans. Hardly. I am suggesting you need to change the conversation in a way that creates a universal theme, preferably one of service.
Your goal is to optimize support from every stakeholder… especially the ones that are the naysayers, who are negatively impacted by your project or simply don’t want change. The one thing that seems consistent with all stakeholder is that value congruence matters. Stakeholders of all types are interested in associating with organizations with whom they can identify and with whom they perceive a match in values. This is especially critical if project success depends on adoption. One way to align values is if you change the conversation and focus on what’s in it for them. Understand their needs, empathize with their concerns and genuinely find the features, efficiencies, outcomes, etc. that benefit them. Move from a containment mindset to a collaborative and creative one.
- Do you still need to manage level of interaction and have a separate communication plan per stakeholder?
- Will there be stakeholders that resist and even try to block your initiative?
- Will you still have to manage difficult tradeoffs?
The answer to all of them is absolutely. This isn’t a “silver bullet” and although I refer to it as “aggressive benevolence” it’s not fairy tales and unicorns. What it does, however, is create a thematic framework that facilitates difficult situations. It lubricates negotiations with resistant vendors. It softens the anger of vocal, fringe stakeholders. It elevates the “horse trading” conversation when you have to make difficult scope changes. Most importantly, it creates a cushion of tolerance and understanding when items invariably fall through the cracks or go terribly wrong.
Stakeholder optimization extends the concept of managing the people that have influence on your project. Its about creating partnerships and a level of support only possible when the other party believes you are like minded, have similar values and that you “have their back.” After all, people want to work with people like themselves.
Change the game by changing conversation.