Theorists trace the origins of modern stakeholder management back to the 1930s. Over time, this concept has integrated into other disciplines and is a part of almost everybody’s life today. Dealing with multiple parties was challenging enough. To add to it, we have factors such as the gig economy and a global workforce, making it more challenging to manage stakeholders in a corporate environment. Earlier on, few roles had to engage with multiple stakeholders. But today, roles have evolved, with cross-team, cross-functional interactions abound. Activities get outsourced; gig workers are coming aboard organizations. People are interacting with more stakeholders daily. The recent shift to remote/hybrid work arrangement gets added to the mix. With all this, how does one manage stakeholders? In a situation where you rarelymeet people in person, work with people from different cultural backgrounds, and often change your stakeholders, how do you effectively manage them?
Mendelow’s matrix talks about analysing stakeholders based on Power (ability to influence the project) and Interest (how keen are they to see the project succeed). By creating a matrix of these two parameters, identifying priority stakeholders, and defining the approach to managing them becomes straightforward. The four quadrants of this matrix are –
These stakeholders are key players that could consist of Sr. Management, investors, clients who have the power to stop or pause a project they’re not happy with.
This group has low influence, so they don’t have a say in the decisions, but they have a keen interest in the projects. They could include staff members or mentors.
This quadrant could include local regulatory bodies who have the power to change laws but probably have minimal interest in your work.
These people don’t have the influence to impact business and are not interested in doing so either.
The first step for managing stakeholders would be to list all the stakeholders. The next step includes plotting them on this matrix depending on the power they wield and their interest in the project. Then, based on which quadrant a particular stakeholder falls in, the focus can shift to managing them. For example, for someone in the Key Players quadrant, a frequent interaction would help, whereas‘an update when required’ suffices for someone in the Minimal Effort quadrant.
While this model gives us a structure for engaging with stakeholders, an aspect that often gets missed is the competencies necessary for managing stakeholders. If essential competencies are underdeveloped, no formal system will solve the puzzle! Especially as we move towards a FoW environment where the focus is on digital, agile, and adaptive workplaces, working with multiple people, leveraging newer work arrangements, and focusing on key competencies rather than roles. And so, having people with the competencies to manage stakeholders is vital for ensuring BAU (business as usual).
Building employees’ competencies to manage stakeholders effectively is
necessary for organizations to focus in the new age world. Some things that
organizations can do –
We are dealing with a global workforce – where people come in all shapes and sizes. In such scenarios, employees need to be more culturally aware and communicate with different people. And communication is not the same as before the pandemic set in. There is more digital interaction and low to zero in-person interaction. Peter Drucker had famously said, “The most important thing in communication is hearing what isn’t said.” And in the absence of in-person interactions, reading the body language becomes a challenge. So, it is crucial to sensitize employees about how digital interactions may affect communication effectiveness and what they need to prevent them when interacting with stakeholders.
Stakeholder management is a broader competency that comprises multiple sub-competencies like interpersonal skills, communication, planning, prioritization, influencing, negotiation, conflict handling, EI, etc. And considering global and remote work is here to stay, fusing digital and cultural competence to the blend is a must. Therefore, organizations need to identify relevant competencies in their context.
The competency framework needs to be revisited based on the competencies identified. In addition, revising the role-competency matrix to map competencies to roles where stakeholder management is essential would enable organizations to determine role holders that need development on these skills.
To determine where each employee stands, organizations need to assess these competencies through reviews, virtual assessment centres etc.
L&D/HR teams, with the help of a learning solutions expert, can create customized learning journeys for each employee on the completion of the competency assessments. Employees can enhance these skills through numerous avenues. But experiential, digital learning journeys customized for the individual/role work the best. For example, third-party specialists create simulations akin to actual work-life where employees can practice their skills in a no-risk environment. Similarly, virtual training, opportunities to shadow or get mentored, working on hands-on projects, etc., can be provided to employees to improve their competencies.
Managing people and their expectations, building trust, and strengthening relationships are a part of the stakeholder management journey. However, these relationships can be tough to make and easy to damage, especially when we are devoid of face-to-face interactions. And in a virtual world, damaged relationships are harder to repair.
Living the philosophy that ‘stakeholder engagement is an investment that takes meticulous planning but ensures voluminous paybacks’ would hold good for anyone trying to manage stakeholders in this virtual world.