Stakeholder Relationship Management

A Maturity Model for Organisational Implementation

Lynda Bourne

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317050612
• Edition: 1
• Topic: Business
• Subtopic: Gestione
• Index: Business

In any activity an organisation undertakes, whether strategic, operational or tactical, the activity can only be successful with the input, commitment and support of its people - stakeholders. Gaining and maintaining the support and commitment of stakeholders requires a continuous process of engaging the right stakeholders at the right time and understanding and managing their expectations. Unfortunately, most organisations have difficulty implementing such culture change, and need assistance and guidance to implement a consistent process for identification and management of stakeholders and their changing expectations. As a continuous improvement process, stakeholder management requires understanding and support from everyone in the organisation from the CEO to the short-term contractor. This requires the concepts and practices of effective stakeholder management to become embedded in the culture of the organisation: 'how we do things around here', this book provides the 'road map' to help organisations achieve these objectives. The text has two specific purposes. Firstly, it is an 'how-to' book providing the fundamental processes and practices for improving stakeholder management in endeavours such as projects, and program management offices (PMO), it also gives guidance on organisational survival during mergers and acquisitions, preparing for the tender bidding, and marketing campaigns. Secondly, Lynda Bourne's book is for organisations that have recognised the importance of stakeholder engagement to their success, it is a guidebook for assessing their current maturity regarding implementation of stakeholder relationship management with a series of guidelines and milestones for achieving the preferred level of maturity.

SECTION II
Guidebook

The Stakeholder Circle methodology and its theoretical framework were described in Section I, Chapters 1 and 2. For those who are seeking to use this book as a set of procedures to improve stakeholder management and engagement practices in an organisation, Section II, Chapters 3–6 can be used as a stand-alone guidebook.

3 The Right Stakeholders

Figure 3.1 Chapter 3 focus

The graphic that heads this chapter is intended to assist in designing the appropriate approach to managing stakeholder relationships in organisations. Similar graphics will head Chapters 4, 5 and 6. When implementing the methodology it is not essential to start at step 1; different steps of the methodology can be selected as discussed in Section III of this book, depending on an organisation’s readiness to implement stakeholder management processes and practices.

The identification of stakeholders is the first stage of a continuous process to collect the information needed to build a profile of each stakeholder, for the purpose of effective communication. Every step of the Stakeholder Circle methodology focuses on gathering, confirming or modifying this key information about stakeholders. Figure 3.1 shows the structured approach for data collection in each of the steps of the methodology.

Step 1: Identify

The essential first step in managing stakeholder relationships is to know who the stakeholders are. Step 1: identify in the Stakeholder Circle methodology provides a course of action for:

• knowing who stakeholders are for a particular time – time now.

• gathering information about each individual or group identified as stakeholders, in anticipation of planning targeted communication.

Step 1: identify consists of three activities:

1. developing a list of stakeholders;

2. identifying mutuality:

a. how each stakeholder is important to the work;

b. what each stakeholder expects from success (or failure) of the work;

3. categorising: documenting each stakeholder’s:

a. directions of influence: these are upwards, downwards, outwards, and sidewards;

b. relationship to the organisation – whether they are internal to the organisation or external.

The output of this step will be a list of all stakeholders that fit the definition of stakeholder: individuals or groups who are impacted by, or can impact, the work or its outcomes at this particular time in the lifecycle of the work.

1. DEVELOP THE STAKEHOLDER LIST

Developing the stakeholder list requires two actions:

1. Select a team for identification and analysis of the stakeholder community. Box 3.1 describes the selection process and discusses the importance of teams for understanding and managing stakeholder relationships.

2. Assemble information about stakeholders (this is often accomplished through brainstorming):¹

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BOX 3.1 THE IMPORTANCE OF TEAMS

This team will ideally consist of 3 to 5 members, including:

1. The project manager or manager of the work;

2. Some core team members;

3. Someone who understands the power structures and politics of the organisation, preferably the sponsor or a senior manager of the organisation.

If possible, membership of this (stakeholder relationship management) team should remain constant over the entire time that the work is being undertaken. Maintaining consistency of membership of this team provides some assurance of reduced subjectivity in decisions made about the stakeholder community and its membership.

An additional benefit to using teams for identification of stakeholders is the sharing of the knowledge that each team member has about certain stakeholders or the stakeholder community, and thus adding to the knowledge that each team member has about the stakeholder community and the power structures of the organisation.

Data collected through a classroom exercise comparing the efficiency of team and individuals in decision-making included in Successful Stakeholder Management (PMI Seminars World Series 2006 and 2007) workshops, shows that of approximately 500 participants, only 6 individuals scored better than their team.

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a. information about their influence on the team and the progress of the work, or influence on the achievement of outcomes;

b. mutuality: what they require from success or failure of the work (expectations) and their influence on the work (why they are stakeholders).

How many stakeholders?

Some organisational activities are large and complex, and may affect many stakeholders. For example, construction of public facilities or national infrastructure projects will affect private citizens, landowners, and the natural and historical environment. In a case such as this, it is essential to recognise and accept that there will be large numbers of stakeholders to be identified. There is often an unconscious boundary on what a ‘good number’ of stakeholders can be; it is important for the team and for their management to understand that while the initial number of stakeholders identified may appear unwieldy or overwhelming, step 2: prioritise provides a structured and logical means to prioritise the key stakeholders for the current time. If a large number of stakeholders have been identified, or it is expected that this will occur, it may be necessary to conduct the identification and prioritisation workshops at different times. Generally three-hour sessions are optimal – given the amount of detailed analysis that needs to occur for effective gathering of essential information. Box 3.2 above describes the importance of iterative data collections and reviews.

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BOX 3.2 ITERATIONS OF DATA COLLECTIONS AND REVIEWS

Gathering information about stakeholders may require a number of iterations. The process is continuous with the information assembled over time. The team should not expect to be able to answer all the essential questions about the stakeholder community even with the assistance of the sponsor, or a senior manager who knows how the culture of the organisation works and knows about the most important stakeholders. It is not acceptable to make guesses about stakeholders’ preferences, expectations, or attitudes. Any assumptions about stakeholders or their place in the stakeholder community must be tested and validated. Also important to recognise is that the expectations and attitudes of stakeholders identified in this process may change over time.

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2. IDENTIFY MUTUALITY

Mutuality adds an additional dimension for describing the nature of relationships. Table 3.1 summarises the different levels of relationships that can exist in an organisation. The application of mutuality to stakeholder relationship management recognises both the maturity of the relationship and the two-way nature of any relationship whether personal, family or work-related. The team has identified stakeholders who can impact its success or are impacted by the outcomes of the work. However, the identification of individuals or groups who can affect the success or failure of the work or its outcomes is only part of the task. Two questions must be asked to gauge and then document both characteristics of each stakeholder:

1. ‘How is this stakeholder important to us? What is their stake?’

Table 3.1 Summary of the relationship model of French and Granrose (1995)

2. ‘What does this stakeholder require from the success or failure of the work’s execution or its outcomes?’

The answers to these questions form the basis of defining and developing a mutual relationship between the stakeholder community and the team. The information obtained in this way is then applied to the list of stakeholders developed from the stakeholder identification exercise.

The stakeholder’s importance

The answer to the first question establishes that this person or group actually is a stakeholder and what their potential contribution to the work’s success (or failure) may be. Generally, a stakeholder is important to the work because he or she:

• is an important source of funds, personnel or materials;

• can impact the success or failure of the project through either action or inaction.

The stakeholder’s expectations

The answer to the second question establishes the stakeholder’s expectations, or requirements, from the success or failure of the project. Generally a stakeholder will have expectations of either personal or organisational gain through either the success or failure of a particular organisational activity. Table 3.2 provides a list of examples of stakeholders’ expectations that might be relevant to an organisation’s activities.

Table 3.2 Examples of stakeholder expectations

Gathering data about mutuality

An understanding of the two parts of the relationship with the stakeholder community is crucial to subsequent steps in the stakeholder mapping process and to developing targeted communication strategies. However the questions may not be answered satisfactorily in the first workshop, and team members may need to assemble the necessary information over time, from a variety of sources. Sources for additional information about stakeholders’ expectations or requirements can include:

• gathering information in the public record: web pages, Google information;

• organisational reports: Annual Report, business case, requirements documents;

• asking others who may have more information;

• asking the stakeholder;

• seeking confirmation of data collected from other sources, such as colleagues, who may have additional information about the stakeholder community being analysed.

Information about a stakeholder’s expectations may also be acquired through surveys. Many organisations are now ...