Stakeholder Management

Stakeholders can be broadly viewed as any group or organization that a business impacts upon or interacts with and can influence the long-term success of that business.

takeholders can be broadly viewed as any group or organization that a business impacts upon or interacts with and can influence the long-term success of that business.

Stakeholders range from small shareholders with a few hundred dollars' worth of shares in a company to communities in which a company has business premises that may employ a few or thousands of people.

Stakeholder knowledge and management is central to the preparation of a comprehensive business case. The balance of critical stakeholders will not be the same in all organizations, but multiple stakeholders must always be taken into account.

The classification of stakeholders is crucial to managing them effectively. They must be classified correctly so that you are aware of the skills and knowledge that they can bring to a project.

Stakeholders can be grouped as

• customers
• employees
• suppliers or business partners
• community
• environment
• government and regulatory
• shareholders and investors

To be able to manage the stakeholders, it is important to perform an analysis of their positions and the type of power they may be able to exert.

To do this it is necessary to establish a number of issues:

• Who is the key stakeholder?
• Who has the most to lose if the project succeeds?
• Who has the most to gain from the project?
• Whose attitude do you most want to change?
• What capacity does each stakeholder have to help or hinder the project?
• Which stakeholder should you most concentrate your efforts on?

The following steps should be taken to ensure that stakeholders are managed properly:

• identify the relevant stakeholders, pressure groups, and other interested parties
• assess stakeholder interests in terms of how they will react to the change brought about by the project
• assess stakeholder commitment or antagonism to the business case
• assess stakeholder power to promote or hinder the success of the project

In order to record exactly who the players in your business case are, create a comprehensive map of all the principal stakeholders in the project.

To create a stakeholder map, use the following steps:

• place the name of the project title on a sheet of paper
• represent each stakeholder individual or group with a circle on the sheet
• place the most significant stakeholders near the center and other less significant stakeholders around the edge
• record the way different stakeholders relate to each other using interconnecting lines
• indicate how relationships between stakeholders may change during the project

For a business to remain successful in the long term, it must not only deliver against a narrowly focused financial bottom line (concentrating on one stakeholder), but also deliver against a multiple range of stakeholders.

To assess stakeholder interests, record the answers to the following five questions for each stakeholder group:

• What are the priorities, goals, and interests of each group of stakeholders?
• How have they been involved in similar past projects and how might this information be useful with regard to possible reactions during this project?
• What are the possible benefits for each group of stakeholders?
• What are their expectations from the project and what is their attitude to it?
• What is their likely reaction to the investment opportunity and what issues or questions might they raise?

It is essential to assess stakeholder interests in terms of how they will react to the change brought about by the project.

This is because if the principal stakeholders are not satisfied, the project will be regarded as a failure.

To clarify the position of each stakeholder group, create a table to record each stakeholder's commitment to the project.

To create a commitment assessment table, use the following steps:

• draw a table with seven columns
• add the following headings to each column - Key stakeholders, Strongly against, Against, Indifferent, Passively in favor, Actively in favor, Strongly in favor
• record each stakeholder's details in a separate row
• place an x in the column that best fits the current commitment of a particular stakeholder and a y in the column that corresponds to the level of commitment that is considered adequate
• use the table to discuss with each group where they are and how they could be encouraged to move to a more positive position

The position of stakeholders does not remain static and a stakeholder who is in favor of the project, if not handled correctly, may become an opponent.

It is for this reason that stakeholder management is critical to the success of a business case.

As well as dividing stakeholders into those who are in favor of the project and those who are against it, it may also be useful to consider stakeholders in terms of how active or passive they are.

To assess how active or passive stakeholders are, create a 2 × 2 matrix with the two dimensions of "Position on the Issue" (whether they are in favor or against it) and "Commitment to Position" (whether they are actively or passively committed).

FANS

The stakeholders in the fans quadrant are actively in favor of the project, have an interest in the results, and are involved in the management of the changes brought about by the project.

SILENT PARTNERS

The stakeholders in the silent partners quadrant are in favor of the project but play a passive role in the project development and thus have no real influence on the project at all.

OLD DEFENDERS

The stakeholders in the old defenders quadrant will actively resist the project as they see it as a threat to their current position.

SLEEPING DOGS

The stakeholders in the sleeping dogs quadrant are not in favor of the project but play a passive role in the project development and thus have no real influence on the project at all.

A stakeholder management program should attempt to

• position as many of the stakeholders as possible in the fans quadrant
• minimize the antagonism of stakeholders wherever possible and prevent them from taking a position in the old defenders quadrant
• move the silent partners up into the top right-hand quadrant where they would become fans
• move the old defenders down into the bottom left-hand quadrant where they would become sleeping dogs

QUESTION

Which of the following steps should be taken to ensure that stakeholders are managed properly?

1. Identify the relevant stakeholders
2. Assess stakeholder power to promote the project
3. Hide planned projects from the stakeholders
4. Assess stakeholder interests
5. Assess stakeholder commitment

This also involves identifying pressure groups and other interested parties.

You should also take into account the stakeholder's power to hinder the success of the project.

The shareholders should be made aware of upcoming projects, although the information should be presented in a way that is likely to gain a favorable response.

Option 4: This option is correct. You should assess their interests in terms of how they will react to the change brought about by the project.

Also, you should try to learn about any possible antagonism to the business case.

I have been teaching and training agents, team leaders, supervisors, managers and admins of call centers and other businesses in BPO related fields. This series, comes as a result of that experience. I have more than 4,000 modules that I plan on sharing here. This is # 006-10

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