Tag Archives: Stakeholder

Managing Stakeholder Attitudes

Posted on January 9, 2020 by Pat Weaver | Leave a comment

A very significant proportion of the risks around most projects are people based. The only way to identify, manage and/or mitigate these risks is by effective two-way communication designed to effect changes in the attitude key stakeholders have towards your project.

Each person’s attitude is derived from their perceptions of your project and how its outcomes will affect their personal interests. Fortunately, perceptions are negotiable and can be changed by effective communication, and if you can change a person’s perceptions, a change in attitude will follow.

For some ideas on how to make this happen, see: https://mosaicprojects.com.au/Mag_Articles/SA1062_Managing_Stakeholder_Attitudes.pdf

For more papers on stakeholder engagement visit: https://mosaicprojects.com.au/PMKI-TPI-075.php

For Stakeholders, 2×2 Is Not Enough!

Posted on April 4, 2015 by Lynda Bourne | 2 comments

The world loves 2×2 matrices – they help make complex issues appear simple. Unfortunately though, some complex issues are complex and need far more information to support effective decision making and action. The apparent elegance of a 2×2 view or the world quickly moves from simple to simplistic.

One such situation is managing project and program stakeholders and convincing the stakeholders affected by the resulting organisational change that change is necessary and potentially beneficial. As a starting point, some stakeholders will be unique to either the project, the overarching program or the organisational change; others will be stakeholders in all three aspects, and their attitude towards one will be influenced by their experiences in another (or what others in their network tell them about ‘the other’).

The problem with a simple 2×2 view of this complex world is the assumption that everyone falls neatly into one of the four options and everyone categorised as belonging in a quadrant can be managed the same way. A typical example is:

Power tends to be one dimension, and can usually be assessed effectively, the second dimension can include Interest, Influence, or Impact none of which are particularly easy to classify. A third dimension can be included for very small numbers of stakeholders by colouring the ‘dots’ typically to show either importance or attitude.

The problem is you may have a stakeholder assessed as high power, low interest who opposes your work, who you need to be actively engaged and supportive – ‘keep satisfied’ is a completely inappropriate management strategy.

The Salience Model developed by Mitchell, Agle, and Wood. (1997) introduces the concepts of urgency and legitimacy.

Urgency refers to the degree of effort the stakeholder is expected to expend in creating or defending its ‘stake’ in the project, this is an important concept! However the concepts of ‘legitimate stakeholders’ and non-stakeholders are inconsistent with stakeholder theory[1] and PMI’s definition of a stakeholder – anyone who believes your project will affect their interests can make themselves a stakeholder (even if their perception is incorrect) and will need managing. This model also ignores the key dimension of supportive / antagonistic.

The three dimensional Stakeholder Cube is a more sophisticated development of the simple 2×2 chart. The methodology supports the mapping of stakeholders’:

Interest (active or passive);
Power (influential or insignificant); and
Attitude (backer or blocker).

This approach facilitates the development of eight typologies with suggestions on the optimum approach to managing each class of stakeholder (Murray-Webster and Simon, 2008[2]). However, the nature of the chart makes it difficult to draw specific stakeholders in the grid, or show any relationships between stakeholders and the activity. However, as with any of the other approached discussed so far, the classifications can be used to categorise the stakeholders in a spreadsheet or database and most of the key dimensions needed for effective management are present in this model. The two missing elements are any form of prioritisation (to focus effort where it is most needed) and the key question ‘Is the stakeholder in the right place?’ is not answered.

Information needed for a full assessment

The factors needed for effective stakeholder management fall into two general categories, firstly the information you need to prioritise your stakeholder engagement actions; second the information you need to plan your prioritised engagement activities.

The two basic elements needed to identify the important stakeholders at ‘this point in time’ are:

Firstly the power the stakeholder has to affect the work of the project. This aspect tends to remain stable over time)
Secondly the degree of ‘urgency’ associated with the stakeholder – how intense are the actions of the stakeholder to protect of support its stake? This aspect can change quickly depending on the interactions that have occurred between the project team and the stakeholder.

I include a third element in the Stakeholder Circle® methodology[3], how close is the stakeholder to the work of the project (proximity) – stakeholders actively engaged in the work (eg, team members) tend to be need more management attention than those relatively remote from the work.

The next step is to assess the attitude of the important stakeholders towards the work of the project. Two assessments are needed, firstly what is the stakeholder’s current attitude towards the project and secondly what is a realistically desirable attitude to expect of the stakeholder that will optimise the chance of project success?

Attitudes can range from actively supportive of the work through to active opposition to the work. The stakeholder may also be willing to engage in communication with you or refuse to communicate[4]. If you need to change the stakeholder’s attitude, you need to be able to communicate!

From this information you can start to plan your communication. Important stakeholders whose attitude is less supportive than needed require carefully directed communication. Others may simply require routine engagement or simple reporting[5].

If this all sounds like hard work it is! But it’s far less work then struggling to revive a failed project. This theme is central to my new book, Making Projects Work, Effective stakeholder and communication management [6]. You generally only get one chance to create a first impression with your stakeholders – it helps to make it a good one.

[1] For more on ‘stakeholder theory’ see:
/2014/07/11/understanding-stakeholder-theory/

[2] For more information see www.lucidusconsulting.com

[3] For more on stakeholder prioritisation see: http://www.stakeholder-management.com/shopcontent.asp?type=help-4

[4] For more on assessing stakeholder attitudes see: http://www.stakeholder-management.com/shopcontent.asp?type=help-6

[5] For more on the ‘three types of stakeholder communication’ see: http://www.mosaicprojects.com.au/Mag_Articles/SA1020_Three_types_stakeholder_communication.pdf

[6] For more on the book see: http://www.mosaicprojects.com.au/Book_Sales.html#MPW

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Posted in Communication, Stakeholder Management

Tagged Communication, Project Management, Project success, Stakeholder, Stakeholder Management, Stakeholder theory, Stakeholders

Stakeholder theory – is there a place for legitimacy?

Posted on June 9, 2014 by Lynda Bourne | 5 comments

Ed Freeman, one of the people whose work had a significant influence on the development of the Stakeholder Circle® will be speaking in Melbourne tomorrow at an ACCSR event hosted by Deakin University, an event I am really looking forward to attending!

R. Edward Freeman is described as the ‘father’ of Stakeholder theory. In his 1994 book Strategic Management: A Stakeholder Approach, Freeman identifies and models the groups which are the stakeholders of a corporation, and recommends methods by which management can give due regard to the interests of those groups. In short, Stakeholder theory addresses the key question of who really matters and the morals and values associated with managing an organisation.

The traditional view of the firm is the shareholder view. This theory states that the shareholders are the owners of the company, and the firm has a binding fiduciary duty to put their needs first, to increase value for them. Stakeholder theory argues that there are other parties involved, including employees, customers, suppliers, financiers, communities, governmental bodies, political groups, trade associations, and trade unions. Even competitors are sometimes counted as stakeholders – their status being derived from their capacity to affect the firm and its other stakeholders.

This wider view is central to the definition of ‘stakeholder’ included in the PMBOK® Guide and the Stakeholder Circle® methodology. The PMBOK® Guide’s definition of stakeholders is: ‘Individuals, groups or organisations who may affect, or be affected by a decision, activity or outcome of a project or perceive this to be the case’.

Whilst this definition would seem sensible, the nature of what is a stakeholder is highly contested with hundreds of definitions existing in the academic literature. Probably the most widely accepted ‘contrary view’ is built on Mitchell’s[1] theory of stakeholder salience. This theory derives a typology of stakeholders based on the attributes of power (the extent a party has means to impose its will in a relationship), legitimacy (socially accepted and expected structures or behaviours), and urgency (time sensitivity or criticality of the stakeholder’s claims).

Legitimacy and the traditional view that stakeholders are ‘the owners’ of an organisation are closely aligned. The implication is that some stakeholders can be ignored because they do not have a ‘legitimate right’ to be considered. I disagree with this view and support Freeman’s wider concept. As he point out in some of his on-line talks:

Do you want employees that are not committed to the success of the organisation?
Do you want customers who do not value your offerings?
Can you afford to alienate the society in which you operate?

Add to Freeman’s questions the fact that ‘non-legitimate’ stakeholders can still create major problems for an organisation through social media and other channels makes taking a wider view of stakeholders seem inevitable. Ultimately the success of an organisation depends on finding ways to align and fulfil the needs of all of its stakeholders – those that do this best are most successful.

The paradox is that investing in successful stakeholder engagement ultimately benefits the organisation’s owners. Numerous surveys have demonstrated that corporations that actively embrace ‘corporate social responsibility’ consistently out perform those that focus on profits first. To quote Freeman: “Every business creates, and sometimes destroys, value for customers, suppliers, employees, communities and financiers. The idea that business is about maximizing profits for shareholders is outdated and doesn’t work very well, as the recent global financial crisis has taught us. The 21st Century is one of ‘Managing for Stakeholders’. The task of executives is to create as much value as possible for stakeholders without resorting to tradeoffs. Great companies endure because they manage to get stakeholder interests aligned.”

The problem with adopting the wider definition of stakeholders implicit in stakeholder theory is managing the large number of potential stakeholders it embraces. Some will be supportive, others neutral or antagonistic; some will be more important than others. Determining who is important at this point in time (and what to do about them) requires a pragmatic methodology focused on:

Identifying, understanding and prioritising the current stakeholder community.
Determining a communication plan to affect desired changes in the attitude of important stakeholders and to maintain or enhance the attitude of the general stakeholder community (usually segmented).
Implementing the communication plan.
Regular reviews to assess the effectiveness of the communication process, update the stakeholder community, and refocus your stakeholder engagement efforts.

Dealing with the amount of data needed to implement these processes requires a rigorous methodology supported by robust tools! The Stakeholder Circle® has been designed for this purpose, the methodology is freely available.

[1]Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts, 1997 Mitchell, Agle, and Wood.

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Posted in Stakeholder Management

Tagged Communication, Ed Freeman, R. Edward Freeman, Stakeholder, Stakeholder Analysis, Stakeholder Management, Stakeholder theory, Stakeholders