Person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies; Key stakeholders in a business organization include creditors, customers, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources; although all stakeholders are not equal and different stakeholders are entitled to different considerations. (Source)
The other day I was sent an article that a friend wrote on stakeholders and new paradigm thinking. It got me thinking about my current situation, as I am in the middle of facilitating a strategic planning process. The hospital that I am at is one in a system of seven hospitals and the framework of our strategic plan is essentially handed to us from our parent company. Along with this – each phase is submitted to the parent company for feedback before final draft. One of the comments on the stakeholder section was “is this it?”... At that time we had included the following:
- Regulatory Bodies
- Parent Company
- External Management Company
- Patients & Local Community
- Insurance Providers
- Local Government & Agencies
- Educational Institutions
- Employees (Current & Future)
Thinking about the fact that the deliverable for this particular section was “Key Stakeholder Mapping”... we discussed adding any more and the answer was no.
Now that we have a list – how are we going to interact with them?
I found a very good process through blogger Lynda Bourne her book on stakeholder management and the stakeholder cycle provides a clear framework for working with stakeholders. She says “Project success and failure is related to stakeholders' perceptions of the value created by the project and the nature of their relationship with the project team. It is strongly influenced by both the expectations and perceptions of the stakeholders, and the capability and willingness of project managers to effectively manage these relationships within the organization’s political environment.”
The Stakeholder Cycle
Step1 – Identification
Whilst this is the critical first step, the methodology suggests that a fresh scan of the environment is undertaken on a regular basis to understand changes in the overall stakeholder community. This process can be usefully timed to support a routine risk review (there is a strong correlations between stakeholders and risk – this will topic for s future post.). Identification includes assessing the stakeholder’s needs, perceptions and expectations on the one hand and what we need from the stakeholder on the other (mutuality).
Step 2 – Prioritization
Ranks the stakeholders based on a combination of power, proximity and urgency. Power and proximity are associated with the stakeholder’s position and should be relatively stable. Urgency is more subtle and includes how likely the stakeholder is to take action and how significant the stakeholder’s stake in the project is to that person. If the stakeholder feels comfortable with the overall running of the project, these factors are likely to be low. If the stakeholder is unhappy with the overall shape of the project they are likely to be higher. Managing these perceptions by effective communication is the core skill in stakeholder management (steps 3 and 4). Effective communication is likely to reduce the levels of ‘urgency’ and consequently reduce the stakeholder’s level of prioritization. Consequently, after the initial prioritization, there are two inputs to re-prioritization, the current, changed, attitude of existing stakeholders who have been the subject of targeted communication plus any new stakeholders from identification.
Step3 – Visualization
The management team is looking for trends and patterns to understand what’s happening both to individual stakeholders and the overall stakeholder community. This information feeds directly into the engagement process.
Step 4 – Engagement
Involves the planning and implementation of the stakeholder communication process. This should encompass everything from face to face meetings through to routine reports and newsletters. But the ‘doing’ of communication is not sufficient. It is critical that the effectiveness of the communications is monitored in real time and appropriate adjustments made to the messages and communication plan.
Step 5 – Monitor
Focused on this. Providing a continual watching brief delivering short term feedback to the communication process day-by-day, and a more comprehensive analysis to the next major review cycle. The inputs to monitoring should include formal assessments and informal ‘intelligence’ picked up by different team members as they go about their business. The core element in this step is the proactive seeking of information and then putting the information to effective use.
How we manage our risks associated with Stakeholders will definitely determine the success of our project as stakeholders have the ability to affect project success through direct or indirect action. As we engage people in a positive manner - they respond accordingly!
