Why this topic today?In today’s article I want to explore how we, as managers, can gain more insight into the concerns and interests of our stakeholders. For those of you who have following my most recent articles on the Planning Framework, this may seem like a detour. But this article is more of a prerequisite piece for the one I’ll publish next on the Communicate Activity. Show
My thesis is that in order to communicate effectively, you have to understand your audience. The Stakeholder Analysis method I’ll describe below provides that understanding, which will benefit your communication efforts and other areas of your management practice. OK. Enough preamble. Let’s jump in. Introduction: Who are Stakeholders and why should we care about them?As managers, we know our jobs are to make things happen. My definition of success for a manager is that “you deliver the results expected by your organization…and then some”. This doesn’t happen in a vacuum, and we certainly don’t do it alone. We work in organizations filled with people. Our organizations exist in companies, industries and communities made up of people and other organizations. Some of those people and organizations have an interest, a “stake”1, in the work we do. They are our “stakeholders”. Some of them depend on us and we depend on some of them. Some of them are supportive of our work. Others may be threatened by it. Many of them, supporters and detractors, will want to influence the direction of our work. Some of them will have the power to help us move forward or to stop our work completely. And many of our stakeholders will have little interest in our work at all, until it impacts them directly. Knowing who your stakeholders are and understanding their interests has a direct relationship to your ability to deliver results. It has a direct impact on your success as a manager. It’s useful to think of stakeholders as internal – those within your organization – and external – those outside of your organization. A short, and incomplete, list of stakeholder types would include the following people and groups. Some typical stakeholder types. (Not an exhaustive list.)For the purposes of this article, I’m going to focus on internal stakeholders, but many of the ideas will also be applicable to external stakeholders. Stakeholder “Management” or Stakeholder “Engagement”?Most discussions about how to deal with stakeholders focus on the idea of stakeholder management. This suggests that the purpose is to convince them to do what you want. UK author Mike Clayton recommends thinking about stakeholder engagement, “the process of entering into a respectful, constructive dialogue with our stakeholders”.2 Since some stakeholders can exert significant influence over your work, having a dialogue with them is a good idea. There are multiple reasons you will want to engage with your stakeholders, including:
Stakeholder Analysis – The Starting Point for EngagementWith so many different types of stakeholders, it can be difficult to know who to start with and how to approach them. The process of stakeholder analysishelps you identify your stakeholders and prioritize your engagement activities. Analyzing your stakeholders is a prerequisite for your overall program of stakeholder engagement. (It is also a necessary component of a communication plan, as mentioned in the Communicate activity in the Planning Framework.) There are four steps in the Stakeholder Analysis process:
We’ll consider each in detail. Stakeholder Analysis should be an ongoing activity. You will iterate through these steps many times and sometimes will be doing multiple steps in parallel. Thus, you can start with the mindset that it doesn’t have to be perfect the first time through. You’ll improve your analysis with each iteration. Identify your stakeholdersUnless you are brand new to your organization, you probably have a pretty good idea of who your stakeholders are. You can generate a list of stakeholders by answering a single question: Who are the persons, groups or organizations who could influence my ability [or my team’s ability] to deliver results? You may end up with a long list. That’s OK. But if you think you might have missed some stakeholders, enlist the help of your boss, colleagues or team members. Having key members of your staff engaged in this process will provide useful perspective. It will be helpful to group the stakeholders on your list by type, such as direct staff, peers, senior executives, and others as shown in the table above. Add other types as needed. This list will change over time, as you identify new stakeholders and as people change roles or leave the organization. Collect information about your stakeholdersThe next step is to collect some basic information about your stakeholders. Some items will be readily available, like:
Other items may require direct conversation with the stakeholder, observing their activities and listening to their comments. You may also need to solicit input from colleagues, team members or your boss. These items include:
Finally, make notes about anything else you know or learn about the stakeholder that will help you engage more effectively with them. The graphic below illustrates a simple template for capturing this data. A Stakeholder Analysis template (with fictional names).Download the Stakeholder Analysis template. All templates are free to download. No subscription required. Read more here. During your first iteration of the process, collect what you know or can reasonably estimate. You’ll refine your data and collect missing pieces over time. In an earlier article, I suggested an approach for conducting one-on-one meetings with employees, colleagues and others in your organization in order to build effective relationships. These meetings present an ideal opportunity to collect information and impressions about your stakeholders. It is not necessary to have a face-to-face discussion with every stakeholder in every group. For some stakeholder groups, it might be appropriate to send surveys or to collect responses from help desks or call centers. You can also gather useful information simply through observation. For example, if one of your Steering Committee members spends most of her time in your meetings looking at her phone, you might conclude that her level of interest is low. (You’ll want to verify that conclusion as noted below.) The information you collect will be a mix of factual data and subjective opinion, both of which should be periodically reconfirmed. It’s probably a fact that your organization’s financial controller has power over your work through the budget approval process. But it your opinion that a business colleague is a detractor of one of your projects should be confirmed through further observation, listening and direct conversation. Tell me more! Subscribe to MyManagementMentor Every two weeks you’ll get an email with a link to the latest article. No spam. Ever. Analyze your stakeholdersThe next step is to analyze the information about your stakeholders. This can, and should, be done in parallel with the information gathering. For this step we will use a stakeholder matrix that allows you to plot stakeholders on a two by two matrix with “Power” and “Interest” as the two axes. Stakeholder Analysis Matrix.Download the Stakeholder Analysis Matrix. All templates are free to download. No subscription required. Read more here. As you collect information about your stakeholders, you can add their names in the appropriate area in the matrix. A completed Stakeholder Analysis Matrix.Again, this is an ongoing activity, so over time you will review and revise your analysis. Changes in the organization will result in people being added or removed from your stakeholder list. You will be aware of, and possibly contribute to, changes in the level of interest or attitudes about your work. Plan your interactions with your stakeholdersThe analysis template and the matrix are useful tools for planning how and when you engage with your stakeholders. Each quadrant of the matrix requires a different approach.
In my next article on the Communicate Activity, I will provide additional information about different tactics for communicating with stakeholders. Two cautionary notesFirst, it is important to recognize that the act of soliciting opinions or collecting information from your stakeholders can create expectations in their minds that you will act on their input or use their opinions to shape your decisions. Be aware of that, particularly with high power \ low interest stakeholders and communicate clearly. Hoa Tran, of Darzin Software in Australia, comments that
Second, I recommend that you treat your analysis work as internal information for your use and your team’s use in managing your work. It is not for general publication. If you’ve not already done so, download the free templates from this article. ConclusionThe process of stakeholder engagement helps build trust among your stakeholders. It allows you to identify the power centers – the people and organizations that have influence over your work. It can help you gain support for your initiatives and acceptance of your plans. The foundation of effective stakeholder engagement is a robust and ongoing process of stakeholder analysis. By segmenting stakeholders by power and interest, you will be better able to focus your time and attention. To your success, Mike What’s on your mind today? Do you have a management problem or question that I could help answer? If so, then let’s talk. Click on the button below to schedule a complementary 30 minute conversation. We’ll work together to identify some actionable ideas. Footnotes1 As often happens, when I went searching for the historical origins of the words “stake” and “stakeholder”, I found various definitions and conflicting historical accounts. The British author and management consultant Mike Clayton, in his book “The Influence Agenda”, cites the Oxford English Dictionary:
Several sources mentioned work done at Stanford Research Institute (SRI) in the 1960’s that resulted in our modern definition of stakeholders. I found two mentions that credit Marion Doscher, a technical writer at SRI, with first using the term “stakeholder” in a business context. According to one source:
That author then continued with a third interpretation:
That’s the answer I was looking for! I grew up watching TV westerns, which often featured tales about the California gold rush of 1849. A miner’s “stake” was the parcel of land – or river – he claimed and where he expected to find his fortune. These were closely guarded and often fought over. Image from a collection of photographs organized on Pinterest by Frances Newsom-Lang. 2 Mike Clayton has published a number of books and videos on various aspects of project management. In this five minute YouTube video he describes his approach to Stakeholder Engagement. How does identifying the stakeholders affect your project?Prioritizing your stakeholders is important because it helps you understand where to invest your resources. In other words, it helps you — as the project manager — to identify who the key decision makers are at any given moment, so you can ensure that you're talking to the right people, at the right time.
How can stakeholders influence change?Here are some quick tips that can help:. Lead by example. If you want stakeholders to be on time for meetings, be on time. ... . Build trust. Influencing cannot happen without trust. ... . Don't use force. ... . Know your stakeholders. ... . Be clear about your goals. ... . Inspire confidence.. Why is it important to understand your stakeholders?It is crucial to identify the groups that are the most important to know your target market. The relationships you identify in the key stakeholder list will allow your business to build positive networks, develop credibility, understand where there are gaps, and tell you what has been making your business successful.
Why is it important for stakeholders to work together?Stakeholder collaboration will result in quality project deliverables as it helps in early resolution of issues. Collaboration with the stakeholder results in value creation for the company. It ensures that the end deliverables fully meets the customer's needs.
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