It is no exaggeration to say that the ability of organisations, whether public or private, to operate within our society depends not only on their success in wealth creation or, for the public sector, achievement in the delivery of Government policy, but also on their capacity to meet the expectations of a diverse and often changing group of constituents who contribute to their existence and success. These constituencies and interests are the organisation’s stakeholders. All organisations must, as a consequence, be engaged in utilizing resources to create benefits for all its stakeholders now and into the future.
That said, what we have found in practice is somewhat different. Organisations recognise that they often have a quite enormous group of stakeholders but when tested will generally admit to only addressing the needs of a small number. They talk about those stakeholder groups who are a priority at that time, those who have the ability to negatively impact on the organisation, those that are the proverbial ‘squeaky wheel, and those that they simply can’t ignore. When the conversation turns to stakeholder relationship management organisations will often give a quick assurance that they have CRM software up and running. Unfortunately, having the software is not the same as managing the issue!
At this stage some definitions may be helpful. Stakeholders may be defined as “any group or individual who can affect or is affected by the achievement of the organization's objective.” Building on this, stakeholder relationship management is not software, long lunches or even coffee, rather it is best defined as “the means to manage and monitor stakeholder relationships that will ultimately impact on the organisations performance and reputation.” To manage stakeholders effectively to achieve this outcome a number of things are necessary.
A real understanding of who our stakeholders are. It is simple to say that we should manage our stakeholders but how do we envisage this happening when we are less than clear who they all are?
A way of managing our stakeholder list – it is here that our CRM software can be useful. It is important to remember that our stakeholder list is almost certainly not fixed; the list grows as new stakeholders are ‘acquired’ and equally stakeholder groups may be removed from the list when the relationship ends.
It is absolutely necessary to have an effective method of grouping stakeholders or stakeholder groups. Once we have a listing of our stakeholders and the ability to group stakeholders in a meaningful way we can make good decisions about the appropriate management (and the resources we need to devote) of different stakeholders groups or even individual stakeholders.
Stakeholder management should be included in strategic plans. In this way effective and meaningful management of stakeholders is given the right level of corporate attention and managed through a set of agreed actions and measures.
The management of stakeholders won’t just happen.’ Firstly, it must be led from the top. Secondly, staff with responsibility for managing the organisations stakeholders must understand that it is necessary for them to make time for this important activity and that they will mange stakeholders in accord with the organisations agreed practice.
However, there is one over-arching issue that we should highlight. We can start with a seemingly simple statement; “great stakeholder relationships are built on the basis of mutual benefit.” As said, seemingly simple but it is critical that there is an organisational understanding and genuine appreciation that stakeholders do not exist to be used. Stakeholder management will only be successful is there exists a long term, mutually beneficial relationship between the organisation and its stakeholders. Of course, the relationship may be different for different stakeholder groups (that being the point of the grouping referred to above) but it must be managed properly and consistent. And in this context what does managed properly mean? Like all good relationships we need many elements including effective communication, appreciation, mutual respect, openness, collaboration, trust and more. In short stakeholder relationship management is just that; it needs quality management and a good relationship to produce all the benefits available.
Integral Development offers the following stakeholder relationship management training sessions:
A two hour short presentation and Q & A session;
A half day workshop which incorporates a stakeholder management model and methodologies for grouping stakeholders; and
A full day workshop with all the above plus tools to support staff in further developing their stakeholder relationship skills.
For further information call Integral Development on 9242 8122.
Written by John Mitchell, Senior Consultant and Executive Coach with Integral Development.
About the Author
Ron Cacioppe is the Managing Director of Integral Development and holds a BSc, an MBA and a PhD in Leadership and Organisational Development. Learn more at Integral Development