Focus On Costs: Day 8 – Stakeholder Management

Over this series of articles, we have explored several key elements required for the delivery of an Enlightened Procurement programme, the simultaneous delivery of cost out and value up.  

Our scope has included everything from understanding spend categories, through to specific approaches to address each, dependent upon its risk and value dimensions, through to relative power and critical aspects of strategic procurement organisation.

Today we are sharing a key tool to enable readers to ‘make it happen’ internally and externally.  The tool is an approach to manage stakeholders to either get the most out of supporters or eliminate detractors towards any initiative within an Enlightened Procurement programme.

Stakeholder Management

Managing stakeholders is the critical skill required to ‘making it happen’.  We are about to share a simple model (…we are still following our commitment to KISS!) which provides a framework for understanding stakeholders and more importantly the affect they can have on your desire to disrupt the status quo and force change in order to deliver Enlightened Procurement.  The approach is set out in Fig 1. 

The first step is, of course, to confirm the stakeholders across the value chain, internal and external, who can affect the delivery of your desired change either positively or negatively.  We recommend that some serious thinking is applied to this because key stakeholders may not be obvious, and their interests may not always be rational; politics and emotion can come into play in making someone a stakeholder.

The old expression ‘to fail to plan is to plan to fail’ definitely applies here.  If you generate an exhaustive list of the stakeholders involved along with the role they might play in the change and the nature of their influence, then you are off to a good start.

The second step in our framework requires that a ‘balance sheet’ is developed.  What we mean by this is a statement about each key stakeholder considering all the interests each stakeholder has in your initiative:

• What reasons does the stakeholder have for agreeing to the proposal?
  • What reasons does the stakeholder have for not agreeing to the proposal?
  • What bottom line/technical interests are involved? (costs, resources, products, etc.)
  • What personal/career interests are involved? (save face, appear reasonable, innovative, promote career, etc.)
  • What relational interests are involved? (keep friendships, old debts, good process, etc.)
  • What organizational/political interests are involved? (identify with success, block change, under orders from superior represents group consensus, etc.)
  • Is the stakeholder’s interest rational, emotional or political?
  • Which reasons are the most important?
  • Finally, on balance, how likely is the stakeholder to view the proposal as in his or her interest?

Summarising the interests is simply a question of allocating a dimension to the Change Attitude the stakeholder has towards your project and their Influence (ability to affect your initiative):

5 is Very Supportive Attitude / Highly Positive Influence

4 is Supportive Attitude / Positive Influence

3 is Ambivalent

2 is Negative Attitude / Negative Influence

1 is Very Negative Attitude / Highly Negative Influence

The impact of any stakeholder can be mapped onto a matrix which describes the nature of a relationship according to their ability to affect your project and their desire to do so (see Fig 2. Stakeholder Impact Analysis) .

Any associated Stakeholder Management activity should be designed to move any ‘Blockers’ towards the right into the ‘Allies’ box or to make them irrelevent and push them down into the ‘Foot Draggers’ or re-position them as ‘Network Members’.  In general the more stakeholders exist on the right hand side of this framework the better.

Summary

This article has been written to equip the reader with a key tool through which to enable a project leader to ‘make it happen’ with their initiative and deliver an Enlightened Procurement programme or initiative by working effectively with or through  all internal and external stakeholders

Alternatively, it may be that under the cover of the current crisis you have been able to use the crisis itself as a ‘burning platform’ and affect the necessary change as it presents a lifeline towards survival.

In the next article we will be presenting a range of key considerations for taking the Enlightened Procurement philosophy across the whole business.