Stakeholder

My original thesis has recently been published as a book by Lambert Academic Publishing AG & Co (www.lappublishing.com).

Details of the book are:
Project Relationship Management and the Stakeholder Circle [Paperback]
ISBN-13: 978-3838398167
Available from Amazon at: http://www.amazon.com/Project-Relationship-Management-Stakeholder-Circle/dp/3838398165/ref=sr_1_1?s=books&ie=UTF8&qid=1282809735&sr=1-1

The research described in my thesis underpins the Stakeholder Circle methodology and tools which led to the publication of Stakeholder Relationship Management: A Maturity Model for Organisational Implementation and the SRMM maturity model available from Gower Publishing at http://www.gowerpub.com/isbn/9780566088643

One of the interesting similarities between stakeholder management and risk management is the challenge of knowing what we know and more importantly understanding what we don’t or can’t know.

An enduring part of Donald H. Rumsfeld’s legacy will be his somewhat garbled comment at a DoD news briefing in 2002: “as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” Despite the wide spread ridicule these comments have attracted, Rumsfeld was right!

The challenge in both risk and stakeholder management is to identify the things we don’t know. This is made more important because what we don’t know about key stakeholders may constitute a significant risk to the project or business.

Plotting what we know in terms of our knowledge of the person’s wants expectations and attitudes in one dimension and how aware we are of that knowledge in another offers four possibilities.

The consequences of the four quadrents are:

• Management Zone: When we are aware of our knowledge proactive management is possible. We know we know and can take appropriate actions. This is where tools such as the Stakeholder Circle® are at their most useful.
• Risk Zone: When we are aware that we don’t know something, we can assess the implications and invest effort as needed. This is the zone traditional risk management works best in and we can use risk management techniques to asses the probable impact of our lack of knowledge and take appropriate actions to mitigate any undesirable consequences.
• Research Zone: We don’t know we have access to knowledge that we could use ‘if we ask the right questions’. This zone is created by amnesia, inexperience and false assumptions (eg, assuming you cannot ask someone a question). Research and experience minimise this quadrant. Facilitated processes such as brainstorming, affinity diagrams and focus groups can help to unlock the knowledge that exists and allow it to be used effectively.
• Reactive Zone: We don’t know we need to know. Particularly with people, there can be many issues problems and opportunities that you are simply unaware of. This area cannot be managed, you have no knowledge you need to be managing something. When issues and opportunities arise you need to be ready to react quickly and there needs to be processes in place to regularly scan the overall stakeholder environment to identify emerging opportunities and issues as early as possible.

Effective stakeholder management is focused on moving all of the key and important stakeholders into the Management Zone. However, you can never be 100% certain you know everything about everyone that matters and need to regularly review the other three quadrants to identify opportunities and minimise issues.

Several thousand years before Rumsfeld, Confucius said: To know that we know what we know and that we do not know what we do not know – that is true knowledge. Given the continually evolving nature of the stakeholder community surrounding any endeavour, achieving true knowledge is always going to be a major challenge.

In addition to normal bound books, Stakeholder Relationship Management: A Maturity Model for Organisational Implementation, is also available as a Gower eBook. We have just been updated on the first quarter sales for the 150 or so Gower books that are available as eBooks and Stakeholder Relationship Management is the second best-seller for the last quarter.

Gower’s eBook can be purchased in their entirety or you may opt for short term access to the book or access to only one or two chapters. The eBook format currently available is Adobe eBook (pdf). For more information visit the Ashgate/Gower website.

To purchase normal books, see http://www.mosaicprojects.com.au/Book_Sales.html for the options available.

20 years ago, stakeholder management and shareholder/owner management were almost synonymous. In the intervening period, much has changed.

Most enlightened thinkers now place stakeholder management at the centre of effective business operations. The business needs to support, empower and satisfy the people working within the organisation, the general public and customers (now classes as Corporate Social Responsibility or CSR) and the owners of the business. All of these people are stakeholders.

Since the passing of the Sarbanes Oxley Act, organisational governance has become an important focus. For all types of organisation this is directly linked to governing the work of the people engaged in the work of the business; ie, stakeholders.

Since the GFC effective risk management has also become of increasing concern. Risk management is not the foolish attempt to avoid all risk – this is impossible, rather the effective management of risk within the risk tolerance thresholds of key stakeholders including the organisations owners and managers; ie, stakeholders.

Stakeholder Management

As summarised by the diagram above, business operations are intrinsically linked to, and require, effective governance, to meet the expectation of the organisations owners, within acceptable risk parameters to deliver value to society and the organisations clients or customers.

However, whilst stakeholder management is central to all of these processes, effective stakeholder management requires the allocation of scarce management resources to focus on the relationships between the work and the most important stakeholders. At the most fundamental level, the purpose of the Stakeholder Circle® methodology is understand ‘who’s who, and who’s important’ in the stakeholder community surrounding your work.

Once you understand this the effective management of stakeholders becomes possible. However, without the clarity of insight created by the careful analysis of the stakeholder community to determine who is really important the potential for wasted effort is enormous. As with most planning process, the payback from effort expended in analysis, is the reduced incidence of issues and problems as the work proceeds.

Can you afford not to focus some effort on effective stakeholder management?

Construction Books Direct, the official bookshop of the Chartered Institute of Building (CIOB – UK) has selected Stakeholder Relationship Management: A Maturity Model for Organisational Implementation, for inclusion in its range of construction and building books and contracts.

To purchase in the UK see: http://www.constructionbooksdirect.com

To preview the book’s contents, see:
     http://www.mosaicprojects.com.au/Book_Sales.html

When considering stakeholders, there are very few one-to-one relationships. Most stakeholders are, and have been, influenced by a range of relationships in and around your project, program and your organisation.

Change Management and Stakeholder Management

Stakeholder management is a key facet of organisational management where stakeholder management is often aligned with marketing, branding and corporate social responsibility (CSR) initiatives.

Similarly, stakeholder management central to change management and the ability to realise the benefits the change was initiated to deliver. The benefits will not be realised unless the key stakeholder communities accept and embrace the changes.

Project and program management also has a focus on effective stakeholder management. In a change initiative, the project and/or program undertakes the work to deliver the elements needed to facilitate the change but are only ever part of the journey from concept to realised value.

A typical evolution of a change initiative would flow along these lines:

• The organisation decides on a major organisational restructure and as a consequence initiates a change management process and appointed a change manager.
• The change manager develops the business case for the program of work and the executives responsible for the organisations portfolio management approve the business case and agree to fund and resource the program.
• The program manager sets up the program management team, established the program management office (PgMO) and charters a series of projects to develop the various deliverables needed to implement the change.
• The projects deliver their outputs.
• The program integrates the outputs with the operational aspects of the organisation.
• The organisation’s management make effective use of the new systems and processes.
• Value is created for the organisation and its owners.

The change manager is the sponsor and primary client for the program but the people who need to be convinced of the value of changing are the operational managers and their staff. If the organisation does not accept and use the new systems and processes very little value is generated.

Within this scenario, stakeholders in the operational part of the organisation, and particularly the managers will be key stakeholders for a range of different entities:

• They are stakeholders in the organisation itself and part of the organisational hierarchy.
• They are stakeholders in the change process being managed by the change manager.
• As end users of the new systems and processes they are also stakeholders of the program.
• As subject matter experts (SMEs) they are likely to be stakeholders in at least some of the projects.

In one respect change management is stakeholder management. Therefore, in a change management initiative, stakeholder management should be an integrated process coordinated at the change manager’s level. All of the organisational elements working on the change need to coordinate their stakeholder management efforts to support the overall outcome. Confusing and mixed messages don’t help anyone.

But this is just one typical business scenario. When considering stakeholders, there are very few one-to-one relationships. Most stakeholders are, and have been, influenced by a range of relationships in and around your organisation. Consequently, focusing on a simple one-to-one view is unlikely to provide the best outcome for anyone.

Effective stakeholder management requires a mature organisational approach. One approach to developing this capability is the SRMM (Stakeholder Relationship Management Maturity) model described in my book. Stakeholder Relationship Management: A Maturity Model for Organisational Implementation. I will outline the SRMM model in a later post.

Chief Executive Officer’s editor, Michael Jones, is featuring an excerpt from my book, Stakeholder Relationship Management, A Maturity Model for Organisational Implementation. CEO is an online industry resource for senior executives.

The excerpt Why stakeholders matter follows the saga of the Heathrow T5 from construction through to its public opening in 2008, and examines whether the passage of time can alter those perceptions. To read the full article go to: http://www.the-chiefexecutive.com/features/feature68469/

My book, Stakeholder Relationship Management, A Maturity Model for Organisational Implementation has launched on Amazon (www.amazon.com) and is selling well – last look there were only 4 left in stock (with more on the way). I also did a book signing at the CIPSA conference in Melbourne last month, with the Co-op Bookshop last month with very good sales.

Overall it seems Stakeholder Management is becoming a topic of interest to a wide range of organisations.

More later…..

When beetles battle beetles in a puddle paddle battle and the beetle battle puddle is a puddle in a bottle…
…they call this a tweetle beetle bottle puddle paddle battle muddle.
Excerpted from: Tweetle Beetles, ‘The Fox in Socks’, by Dr Seuss

The connection between a book written to be read to under 5s and business stakeholder management is the ‘puddle muddle’ otherwise known as the stakeholder pool. The challenge of managing stakeholders is a factor of the disturbance caused by dozens if not hundreds of battles most of which, the person attempting to efficiently manage his or her stakeholders has no control over whatsoever.

Most stakeholder management methodologies start by assessing the stakeholder from the perspective of the work. This is not unreasonable but can easily miss many important factors.

Figure 1: The Stakeholder Pool

Figure 1 shows ‘the stakeholder’ in the overall stakeholder pool being influenced by the ripples created by your battle in your part of the pool (your puddle). Unfortunately the stakeholder pool is a much bigger, more turbulent place.

Figure 2: the Stakeholder Pool with turbulence

Show some of the other disturbances in the pool and you start to see the stakeholder buffeted by waves and impacts from all directions, in Figure 2. ‘The stakeholder’ is continually being buffeted by waves from other projects, the organisation and many other influences. These other waves are one of the prime reasons stakeholder responses to your perfectly reasonable needs or suggestions are frequently so unpredictable. All of these influences, both current and past have helped shape the stakeholders perceptions and attitudes towards your industry, your organisation and ultimately, you.

Consequently, a single view point is really not sufficient! Effective stakeholder management needs an organisational approach. Successful stakeholder management requires all of the influences perceived by the stakeholder to be coordinated and authentic. And this can only be achieved by the organisation as a whole adopting mature, ethical stakeholder management as a core discipline.

Very little has been written about mature organisational stakeholder management until recently. To date, the focus of most papers have been one dimensional focusing on CRM and the ‘customer experience’ or one dimensional focusing on the relationship between the stakeholder and a project (or other organisational activity).

My new book, Stakeholder Relationship Management: A Maturity Model for Organisational Implementation, takes this next step to define the interaction between the organisation as a whole and its stakeholders using the Stakeholder Relationship Management Maturity (SRMM®) model.

Effective and ethical stakeholder management cannot happen overnight and cannot happen in isolation. The preconceived perceptions of stakeholders towards your work are based on multiple experiences over an extended period of time, and the stakeholder-to-stakeholder conversations that occur outside of your hearing or control. To actively improve these conversations and create a positive and supportive stakeholder environment needs a long term consistent effort, organisation wide.

The SRMM model offers a practical framework that can be used by organisations to build from ad hoc, single project attempts to manage stakeholders to a situation where stakeholder management is a core skill used by the organisation as a whole to maintain a competitive advantage. As with any culture change, this cannot happen overnight but at least my book provides a road map organisations can use to improve their management of stakeholder relationships to the benefit of both the stakeholders and the organisation.

Stakeholder Relationship Management: A Maturity Model for Organisational Implementation is published by Gower, ISBN: 978-0-566-08864-3

I have just seen some information on a 2007 survey undertaken by the PMO Executive Council (part of the Corporate Executive Board: http://www.executiveboard.com/). This snapshot survey, Attributes of a High Performance PM – 2007, found very little correlation between project management certification and project management effectiveness, or the number of years a person has been in project management roles and project management effectiveness.

The survey found the drivers for project management effectiveness were behavioural attributes such as problem solving and the ability to relate effectively with key stakeholders. Whilst many people may initially want to disagree with these findings, they are consistent with many other trends and on reflection quite logical.

Firstly, the survey did not look at the PM’s track record, merely the time the PM had been in project roles. It is reasonable to assume highly effective PMs will have a relatively short PM career and then move on and up the organisational hierarchy. Less effective PMs are likely to stay in their PM role focused on process and technology.

Secondly, whilst PM credentials such as PMP remain very effective tools in the job market; passing your PMP does not make you an effective project manager (see more on PMP). The PMP knowledge framework gives you the knowledge to be an effective project manager. Being effective requires you to become a competent project manager.

Competency has three aspects, knowledge, skills and behaviour:

• what you know,
• your ability to apply the knowledge (essentially personality traits) and
• your willingness to use the skills effectively (essentially behavioural traits).

Qualifying project managers based on behavioural competencies is in its infancy. The Australian Institute of Project Management (AIPM) has recently moved its professional certification program (RegPM) from a procedural view of competency (eg, do you have a project schedule – the artefact?) to a behavioural view of competency (how effectively do you manager the schedule on your project?). This is ground breaking work and still has a long way to go.

PMI have adopted a different, but similar approach in their program management certification (PgMP) with a 360 degree review testing how effective the candidate is in the workplace. These trends have a long way to go but are likely to be the next step in project certification.

Of more direct interest in the short term is the demonstrated link between how effectively a project manager engages with his/her key stakeholders and high performance outcomes. These skills are a core element in a number of workshops we run including Successful Stakeholder Management and The Science and Art of Communicating Effectively, and are supported in part by our Stakeholder Circle® methodology and tool set.

Learning how to apply the skills in the workplace though is not quite as simple as attending a workshop or buying a set of tools. Soft skills are very hard to acquire and use. My feeling is they are called ‘soft’ because they change shape and texture depending on the environment they are being applied within. The calculations for EV or CPM are universal; the best way to engage a senior stakeholder is totally dependent on the culture of the organisation. Some elements remain consistent (eg, the need for an effective relationship) but the way this is achieved varies.

Developing these advanced skills that are the attributes of high performance project managers requires context sensitive coaching and mentoring rather then formal courses (see: Executive PM Coaching & Mentoring). Ideally organisations seeking to develop high performance PMs will move beyond certification towards implementing internal mentoring systems – it’s the best way to ensure they are contextually relevant.

However, where we differ from the survey findings is that we believe certifications such as PMP are still relevant. Passing a PMI credential such as PMP or CAPM (see more on the PMI credential framework) is a positive demonstration of the initial knowledge component of competency; it’s just that knowledge alone is not sufficient.

Achieving this next level of high performance PMs will also require organisational competence in at least two domains. Process competence measured by tools such as PMI’s OPM3® framework and relationship management maturity measured by tools such as my SRMM® framework.

These are definitely interesting times for our profession.