GLOBALISATION HAS SHIFTED the competitive playing field. In order to compete, companies have had to upscale their cross-functional inner structures and build their internal communication across departments, regions and countries. As a consequence, stakeholder engagement has become more challenging, but more important than ever.
Project stakeholders can make or break the implementation of a business process, technology solution or business initiative. Communicating with stakeholders early enough can help to clarify project scope and desired outcomes, create advocates who understand the benefits of the project, and ensure support throughout the project. And it all starts by knowing your stakeholders.
A Stakeholder Analysis is a tool used widely to identify the key people (stakeholders) in a project, and here are a few considerations prior to implementation:
1. Rank the requirements, not just the stakeholders
Identifying your stakeholder is an important step in the process. As soon as being assigned to a project, the first task is to find out who are the ‘key people’. Names, tagged with positions, characters, and professional background, are important in this early stage. Then, grouping each name into profession, like Technology, HR, Finance, or IT personnel, as well as their level of influence held within their department or team, will help with a later allocation of your time resources. If your company has already conducted psychometric tests on employees, such as the HBDI (Herrmann Brain dominance Instrument) model, MBTI, or Belbin Team Roles survey, then include these in your initial plan.
But I would not rank these stakeholders by their importance only. It’s a common mistake to focus on the most important VIPs. The interests of these VIPs gains all the attention and resources, but can result in a crisis since the interests of the non-VIP stakeholders are overlooked. The less visible stakeholders can also have some very important requirements and can just as easily create an impasse in the project. In other words, we should rank the requirements, not only the stakeholders.
2. Focus on what your stakeholders need rather than what they want
It is always difficult to turn down a stakeholder’s request, especially if they are a VIP. But sometimes requests must be declined, since the real need is being ignored. In some cases, the stakeholder may not even know what their need is, and this is where you, as the project leader, must help.
Take a project, that I was recently involved in, for example. Three stakeholders, from Sales, Quality and Procurement were all in discussion. The Sales Director urged the other two for prompt delivery , while the Quality Manager insisted on stopping the production due to a suspected quality glitch.The Procurement Manager was interested in neither. He wanted more time to allow for better price negotiations, since his boss was only interested in more savings for the company. It appeared that all three were in conflict.
But that was actually not the case; the situation just needed to be reframed. The Sales Director wanted prompt delivery, because there was going to be a roadshow for this new products and he wanted to meet the schedule. He most certainly didn’t want to promote a low quality product. A new product in good quality, delivered on time to the road show, was actually what he needed. Not merely the speed! What about the quality expert? His insistence on higher quality, was actually in order to ensure stability of new products. So he was not in conflict with either Sales Director or the Procurement Manager either.
There is one more stakeholder in this story – the supplier. They were trying to increase the price, in order to provide more profits, but they certainly didn’t want to be wasting their time in supplier meetings. So, all parties had the same goal – to help build a successful new, and long-term, product. But their expectations seemed to be in conflict only because they were only looking at their own immediate positions, and not their greater need. When this was clarified, the three were able to engage in constructive conversation and reach an agreement:
- The Sales Director accepted partial shipment of the new product, as they were not going to use all the volumes in first two weeks,
- The Quality Manager won enough time to do the full check to secure the first batch’s quality, within the marketing time, and
- The Procurement manager also agreed to promptly negotiate for higher quality with the supplier, and eventually save money for the company by reducing quality risk and avoiding losing market opportunities. The supplier was able to increase the price to complement this increase demand on quality.
This was a real case, involving a newly established semi conductor design company in the field of GSM chip production. The firm, Datang Microelectronics Ltd., beat the more established international firms, Infineon, ST Micro, and Schlumberger one after the other within the Chinese market, and integrated stakeholder engagement is one of the reasons for its success.
3. Rate the relationships between stakeholders
This is equally important for successful engagement of all stakeholders. After a clear stakeholder analysis and clarifying what each party really needs, it is important to understand how the stakeholders relate to one another. This will help manage stakeholder expectations, ensure positive stakeholders cooperation continues, and reach agreements between multiple parties.
Some questions that may help identify the relationships between stakeholders include:
- Who influences this stakeholder and to what extent?
- Who does this stakeholder influence and to what extent?
- Who does this stakeholder report to?
- Who reports to this stakeholder?
- What other committees/steering groups was this stakeholder a part of?
Stakeholder relationships are often very complex. Understanding the nuances of stakeholders’ needs and agendas and how they relate to each other often requires delicate and sophisticated relationship management and consulting skills. A helpful tool to clearly understand the relationships between stakeholders is to plot each stakeholder on a Power vs. Interest chart and then draw lines between the stakeholders that have close ties.
If stakeholder ‘A’ with high power and high interest, has a relationship with stakeholder ‘B’, who has high interest in the project, but low power, then it is important to keep stakeholder ‘B’ well informed, since stakeholder ‘B’ could help manage the project team and report on stakeholder ‘A’s’ level of motivation. In doing so, this can avoid a negative surprise down the road. Getting early support from stakeholders who have high power can also be extremely helpful for the project manager to relocate him/herself in the overall project relationship. Project managers have high interest in the success of a project, but not always high power as well, and so building alliances is helpful.
Managing projects is challenging, but by taking these three steps into consideration, you are more likely to overcome objections, hit deadlines, and ultimately deliver a successful project.