Using Stakeholder Analysis to Drive Business Success: Best Practices and StrategiesMar 28, 2023
Essential Tools for Effective Stakeholder Management
The key to stakeholder engagement is to seek to understand before being understood. As NATO’s Information Technology and Communications agency’s Stakeholder Engagement Executive Coordinator, the author has successfully applied this principle for more than 20 years. Decision-making in uncertain and volatile environments requires reliable real-time data, and the author emphasizes that the focus should be on the needs and pains of decision-makers rather than technical details. The article suggests a shift from mechanical management to a more human approach to stakeholder management. The article suggests mapping stakeholders to prioritize engagement efforts and understand their motivations in order to manage stakeholders effectively.
In stakeholder engagement, the most important principle is to seek to understand before being understood. This is a principle I’ve employed for the past 20 years in NATO’s Information Technology and Communications agency as a means of getting stakeholders to embrace IT as an integral part of NATO’s mission rather than an afterthought.
Throughout my career, I translated the impact of technology programs into a map of the decision-makers’ world.
During times of uncertainty and volatility, reliable data and rapid decision-making became key. With hybrid warfare challenges on the rise, cyber threats multiplying, and disinformation campaigns polarizing societies around the world, reliable real-time data was essential.
Decisions made in volatile and uncertain environments (VUCA) are risky without a reliable Information Technology infrastructure to provide the necessary decision framework.
As opposed to focusing on the technical aspects, I drafted and conveyed key messages from the political decision-makers’ map of the world. Our goal was to show them how IT can reduce their pain and increase their gains by focusing on their needs and their pain.
Getting the desired results was never going to be easy and would need to be well thought out. This is where stakeholder engagement and communication are crucial.
What is Stakeholder Management? The problem with the definition
Depending on your map of the world, your mood and your background, stakeholder management will have different meanings. First, let’s define what a stakeholder is.
Any individual or group that has an interest in or influence over the project is considered a stakeholder.
That’s a pretty broad definition.
There is also the challenge with the word ‘management’ that it may trigger mechanical associations. In many ways, management is an extension of Frederick Taylor’s production management principles, which have a profound historical influence. It is true that Taylor’s principles were highly successful in manufacturing, but they are largely delusional when dealing with people with different agendas, loyalties, histories, personalities, and power dynamics.
The word ‘engagement” however requires a more human approach towards understanding intrinsic motivation. What motivates others to act differently? How does someone become motivated?
Simply changing your mindset from stakeholder management to stakeholder engagement will put you on the right track.
Decide what you want to achieve before you start anything else
Any meeting that our boss attended was preceded by a briefing on the desired outcome. During every discussion, he was driven by a clear vision of NATO’s digital foundation as the Agency’s future. Even in a highly political environment, I admired his practical approach to getting things done.
In my role as Stakeholder Engagement Executive Coordinator, I translated this vision into smaller strategic objectives supported NATO’s political and military decisions. As a result, we always started with the end in mind. We focused on what a successful outcome would look like.
Outcomes are the results of what you deliver as outputs. An outcome is generally defined as ‘the result of a change, usually affecting the behavior and circumstances of those operating a transformed business’.
The following are examples of how I framed success for our senior leadership:
- Sees the Agency as a critical enabler of political decision-making in times of crises and uncertainty.
- Recognizes the Agency as an important partner in the cyber governance process.
The examples helped our leadership visualize the outcome in much more detail.
What obstacles stand in your way to where you want to be?
The key to success is understanding the obstacles you will face along the way. Focusing only on what success looks like will not get you very far.
Once you have a vision and a direction, understanding what stands in your way is critical to solving the problem.
Among the obstacles we faced was the perception that IT was an afterthought by most political and military decision makers. An end-of-supply chain consideration. In spite of the challenges stakeholders faces in moving away from legacy systems and adopting new technology, IT was not considered a priority at that time.
By recognizing and understanding this obstacle, we were able to shift this perspective through tailored stakeholder engagement strategies.
The key is to understand stakeholders from the inside out
Did you ever forget to invite your mother-in-law to a family event? What about when you sent the boss an email without mentioning the other department? While you probably just forgot, you have committed a disgraceful act in the eyes of others. Nobody likes to be forgotten. It does not matter how disinterested stakeholders act, they still like to have a say in how much involvement they want.
Former FBI hostage negotiator, Chris Voss, summed up well in his excellent book “Never Split the Difference: Negotiating As If Your Life Depended On It’ :
“It is important for people to feel in control. The power to choose is important to them. They will rebel in some way if you take away their freedom to chose.”
To manage your stakeholders effectively, you need to follow two steps. In order to gain a helicopter view of your stakeholders, the first step is to map them. A simple overview of where your stakeholders sit can help you prioritize and drive your engagement efforts because there are simply too many stakeholders to consider.
An easy stakeholder mapping (Here a Youtube tutorial) tool allows me to see where stakeholders fit into a given project and what level of influence they have. This map has four categories:
- You list all the stakeholders who have low influence and low interest in your project or desired outcome in this category. You should plan regular feedback loops since their position may change over time.
- Keep Informed:
- In spite of their low influence, these stakeholders are very interested in your project. Our tendency is to overlook or minimize their importance, but they can influence important decision-makers. Keep them informed either through regular updates or in-person meetings every x months, if possible. Get to know your stakeholders within their map of the world.
- Keep Satisfied:
- There are stakeholders who have high levels of influence, but are perhaps not that interested in your project at this time. Keeping them satisfied is important as they are important allies. Particularly in difficult times, they can play an important role in helping you reach your goals.
- Manage Closely:
- It is crucial for your success to invest in building strong relationships, open and honest dialogues with these stakeholders since they have the highest levels of interest and influence. Using emotional intelligence to navigate all kinds of stakeholder personalities and interests will serve as a foundation for success.
How to develop Empathy Maps for your key stakeholders
It is essential to have a deep understanding of the most critical stakeholders. Influencing or persuading someone requires understanding before seeking to be understood.
Your stakeholder’s map of the world can be better understood with empathy maps. Here are some key questions to ask:
- What are they seeing?
In times of uncertainty, using assumptions to close information gaps helps us manage our energy. We see the world according to our background and mood, but not necessarily as it is.
- What are they hearing?
Often, communication is about non-verbal cues rather than what is being communicated. Depending on the mental model of your stakeholder, your message will be perceived and processed differently.
- What are they saying?
You cannot expect every stakeholder to communicate in a direct and concise manner with little to no ambiguity, especially if they are stressed. Picking up on non-verbal communication is essential for reading between the lines.
- What are they doing?
Partnership and stakeholder trust are based on walking the walk. Does their behavior match their words? If not, what could be causing this? This also requires cultural intelligence.
- What is their pain?
You can overcome stakeholder resistance to change, for example, by understanding their pain points and invisible fears. The most pessimistic stakeholder can be convinced to join your cause if you focus on solving their pain point.
- What is their gain?
In terms of gains, how can you communicate the end in mind in a way that your stakeholders can understand? A high level board member can be motivated to reduce risk by using unreliable data, for example, in IT. When data integrity is compromised, their reputation, compliance and regulatory landscape, and shareholder satisfaction represent a high business risk they care about.
A Human-Centered Approach to Managing Risks Upfront
For years, project management has taught quite mechanical ways to manage risk to ensure that projects are delivered on time, within budget, and within scope. However, every project manager you meet will tell you that this is almost never the case in the real world.
Particularly in today’s hybrid world where change is constant and people are fatigued by it. Managing change within projects and managing change with people present different types of risks.
Change happens to us, disruption happens within us.
When people feel stressed and pressured, their reactions to change can also be unpredictable, which also poses a risk to your project. If you don’t understand the emotional process experienced from within, traditional project management principles won’t be helpful.
When dealing with loss, Kubler-Ross’s scientific model can help you better understand the types of emotions people feel. Although this model is designed to cope with grief, it also provides a practical and human-centric approach to change management.
Leadership is critical to managing these diverse risks in a humane manner. It is likely that the subject matter experts you lead are quite adept at understanding, managing, and mitigating technical risks. Human risk must be considered when managing the people challenges with a bird’s eye view on business disruption.
Stakeholder Engagement Plan – How to communicate from the outside-in
“Communication is the fuel that keeps the fire of stakeholder engagement burning.” – Unknown
This quote emphasizes the crucial role that effective communication plays in maintaining meaningful relationships with stakeholders. Without clear and frequent communication, stakeholders may become disengaged or disconnected from the project, hindering its success. Therefore, it is essential to prioritize communication as a fundamental aspect of stakeholder engagement.
From my experience, I have found that the biggest challenge when briefing high-level decision-makers is that our brilliant STEM professionals often got lost in technical jargon. As a result, they focused solely on communicating the technical problem from their perspective, using lots of numbers and technical nodes which was overwhelming for committees who were not technical experts. The decision-making committees usually consist of financial experts, business people, diplomats, or political scientists who often have to deal with multiple portfolios within NATO and the EU.
As the strategic stakeholder engagement office, our job was to bridge this gap by translating technical problems into outcomes that matter to decision-makers.
For example, when briefing the military committee, we emphasized how fast reliable technology could help soldiers in the field communicate in austere conditions and save lives.
Similarly, when briefing the highest decision-making body in NATO, we focused on communicating the importance of secure mobile communications with reliable data, enabling them to make decisions at the speed of light when political consequences and national interests were at stake.
By communicating the impact of technology in terms of outcomes that matter to decision-makers, we were able to gain their confidence in the use of secure and interoperable information and technology solutions.
This is crucial because during times of change, uncertainty, and volatility, strong and resilient relationships matter more than ever.
As such, stakeholder engagement should be a foundational part of any business objective aimed at building trust and confidence with stakeholders.
Thank you for reading, and I hope these insights help you in your stakeholder engagement efforts.
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