Stakeholder management (or stakeholder engagement) is one of the skills that you need in increasing measure as you develop in your business career. It’s a strange term, I think, because it sounds like terminology. Do you know what I mean?
The thing is, stakeholder engagement is not just one skill. It’s a group of skills, brought together with a single purpose. And that single purpose branches in different directions, each needing to draw on those skills in different ways.
The purpose of stakeholder management
The purpose of stakeholder management – and this is going to sound so generalised – is to make sure you deal with all the people you have to deal with in the best way. In that sense, it’s a life skill as much as a business skill.
So, let’s unpack this a bit.
“… all the people you have to deal with…” – these are your stakeholders. Do we know who they are?
“… the best way” – how do we know what the best way is?
“… deal with…” – this is what we mean by management or engagement. What does that involve doing?
Finally, what are these skills that you need to do stakeholder management?
Who are the stakeholders?
Stakeholders comprise of all the people that are relevant for a particular thing that you’re doing, or proposing to do.
It’s worth brainstorming all the people, groups and organisations that may be relevant. You should do this at the start of any project or initiative. Periodically, it’s even worthwhile in your regular work, especially if you’re a manager.
Here are some categories to get you going:
- Who is interested in whether you succeed or fail?
- Who is interested in just knowing about what you’re doing (apart from your mum)?
- Who can influence whether you succeed or fail? (Or who do you want to have influence?)
- Who do you need input from to do your job well?
- Who will be impacted by what you’re doing?
You may get a list of 10 or 20 – e.g. customers, your boss, the CEO, the marketing department, the IT development team, all the managers in the business, your team, etc.
The next thing to do is, for each one on the list (no matter what you were thinking when you made a note of them), go through and note:
- What their interest is, and their degree of interest;
- How they can influence the outcome of what you’re doing, and their degree of influence;
- What input they can provide that would help you, and how important that input is (and why);
- What impact your work will have on them, and how it will affect them.
The aim of stakeholder management
Once you know who these people and groups are, you need to work out what will be the best way of dealing with each of them.
But how do you work out the “best way”?
My advice would be keep focused on your objectives, which should lead to better performance of the business. In each case, what kind of action will lead to better performance of the business?
So, for example, the best way of dealing with customers may be to keep them well informed, even involved, so that they know you care, which will lead to them continuing to buy from your company.
And remember, better performance does not just mean more profit in the short term. Reducing risk leads to better performance, because it reduces the threats that could impact on it. So for example, if you identify the tax authorities as a stakeholder, your approach may be to pay extra close attention to giving them the information they need, to reduce the risk of investigations or penalties.
Stakeholder management actions
If you find it helpful, the grid below seems quite popular in thinking how to position and manage stakeholders:
Personally, I’m not entirely sure it tells the full story. There is a huge variety of actions you could take to deal with stakeholders in the best way. Here are a few:
- Communicate – tell them what’s happening with what your doing;
- Involve – get their opinion on designs, get them involved in testing;
- Listen – just take time to pay attention to what they say;
- Consult – ask for their approval in finalising plans;
- Be their advocate – represent them to your colleagues and managers;
- Influence – try to persuade them to accept what you’re doing;
- Help – make sure they have all the information and support they need to cope with any change that may impact them;
- Provide – ensure they have the resources they need to assist in your plans if you need them.
Of course, you will also need to prioritise. You don’t have time to give all the stakeholders an equal amount of time and attention. So you will need to balance them, and pitch it just right for each of them. Some are so critical to your success, and the performance of the business, that it’s worth exceeding their expectations. At the other extreme there may be some you can risk neglecting if necessary.
The main thing is to be intentional. Have a reason for whatever you do with your stakeholders. And be conscious of (and prepared for) what could happen if you get it wrong.
Stakeholder management skills
The skills required to manage stakeholders are also many and varied, and take experience to develop. Here’s another list to give you the flavour (it’s possible to get training/coaching in any of these too):
- Communication – saying things, presenting thing and writing things, clearly and in a way that takes the audience into account (What do they want/need to know? How much time have they got to listen/read? What language is appropriate? What’s the clearest way of presenting information – graphical, colourful, descriptive, narrative, bullet points, etc.?)
- Presentation – same as communication but in a particular situation;
- Listening – asking open questions, probing with sensitivity and showing interest;
- Influencing – using the right approach for the individual;
- Relationship management
I’ve had training on almost all these things over the course of my career, and it definitely has been helpful.
All the above is good stuff in general situations. And you need to use it intentionally in thinking about business performance management, because stakeholders (at the very least) form part of the environment in which performance is management.
However, there is one role where stakeholder engagement comes up as almost the key skill. And that is project management. And I want to say something briefly about it.
Whenever I’ve gone for a project management role, stakeholder engagement has been high up the priorities. And I agree with that. Projects change things, impact on people in the organisation, and are risky. What I want to say on this as I conclude is that when recruiting a project manager, what the business normally means by stakeholder engagement is “keeping the bosses happy”.
Keeping the bosses happy is definitely an important thing. And managing them as stakeholders is all about
- Knowing your stuff, so that you can answer their questions either ad hoc or in project board meetings;
- Presenting clearly and with confidence;
- Always having key risks and issues at the forefront of your mind, and being able to discuss options, pros and cons, and advise sensibly on the way forward;
- Basically, being high in credibility and inspiring confidence. The bosses – the project sponsor and project board want to feel that the project is in safe hands.
But, the other side of stakeholder engagement in projects is too often forgotten. And it’s the one that makes probably more difference to the success of a project.
And that is engagement with those who will be impacted by change, and those who are needed to do things to deliver benefits. They are stakeholders as well. They may be junior people in remote teams, but without their acceptance, involvement and assistance, many projects would fail.
Stakeholder management is a key discipline. The soft skills needed are trainable, rather than teachable. And they take practice and experience to improve.
But it’s also about being intentional over the way you deal with different people you need to take account of in whatever you’re doing.
I hope that the methodologies, structures and pointers above will help you to start doing this better.
If you have any questions over specific examples, please don’t hesitate to put them into the comments section below. I love getting comments on blog posts, and I’ll enter the discussion and answer as many points as I can.
PS. Stakeholder management is part of the Business Performance Management framework that is a core part of way we look at things at Supercharged Finance. Find out more here.