Beyond Crisis Management: Are You Breaking Bad Stakeholder Habits?

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Categories: Human Aspects of PM


By Lynda Bourne

 

Project stakeholders can be helpful, obstructionist and almost everything in between. The good news is that how you deal with most stakeholders is largely up to you! The only certainty is your stakeholders are not about to go away and leave you in peace.

As you’ll see below, there are three basic ways to deal with stakeholders.

1) Crisis Management

With this approach, you basically choose to ignore the stakeholder problem until something dramatic happens—and then you react to deal with what has become a crisis! 

Doing nothing may seem like a good idea when confronted with all of the other demands of the project, but this is misguided. When the crisis erupts, you are reacting to someone else’s agenda. This places you in a vulnerable situation. The atmosphere is typically hostile, and the time and effort needed to recover the situation can easily exceed the time and effort needed to employ alternative options.

2) Stakeholder Management

This approach is proactive rather than reactive. By proactively managing your stakeholder community, you will eliminate most of the crises and be in a much stronger position to deal with any issues that do “blow up.” 

Stakeholder management involves identifying the members of your stakeholder community, recognizing their needs and expectations, and implementing a planned communication strategy to maximize their support for the project and minimize any opposition.

Through regular, planned communication activities, you seek to identify issues and problems before they become significant. You take appropriate steps to exploit opportunities and defend against emerging threats and problems. As with any management function, the manager seeks to control and optimize the situation.

This is essentially a “push” process and includes elements such as reporting, public relations (PR) and, in larger projects and programs, may extend to customer relationship management (CRM).

3) Stakeholder Engagement

This approach requires a paradigm shift in thinking! Rather than trying to manage stakeholders to achieve the predetermined outcome your project was established to deliver, stakeholder engagement invites stakeholders to become part of the process designed to fulfill their requirements.

The solution delivered through the project evolves and adapts based on the interaction between the project team and its key stakeholders. Opening up to stakeholders and inviting them to be part of the solution requires letting go of the concept of “one correct solution.”

In place of the answer, the project team and stakeholders work together to develop an agreed-upon outcome. 

The concept of stakeholder engagement is a central tenet of the Agile Manifesto. But agile approaches aren’t the only way to open up the power of stakeholder engagement. Many modern forms of project contracts, typically used on major construction and engineering contracts, recognize that collaboration between key stakeholders reduces risk and increases the value of the project for everyone. 

Alliance contracts, early contractor involvement (ECI) contracts, and various forms of partnerships and supply chain arrangements all seek to replace the command-and-control management approach to delivering defined outcomes, based on inflexible contract conditions, with collaborative working arrangements focused on achieving a mutually beneficial outcome.

Breaking habits formed over decades of “hard contracting,” and the almost routine litigation that follows, is not easy. But it does seem to be worth the effort.

Numerous surveys (primarily in the U.K. construction sector) have consistently shown that the client gets a better outcome for less cost and the contractors make more profits working in a collaborative environment where everyone is pulling in the same direction. Similar results have emerged from projects employing agile approaches, where the magic trifecta of “better, cheaper and quicker” seems to be regularly achieved.

 

So my question to you is: Are you still operating in crisis management mode when it comes to stakeholders? Or have you moved toward effective stakeholder management? And are you willing to take the plunge and go for full-on stakeholder engagement? 

Stakeholder engagement is not an easy option. It requires a range of skills quite different from traditional stakeholder management, but the results are definitely worth the effort! The beauty of stakeholder engagement is that you open up to your stakeholders and allow them to help you successfully deliver their requirements.

It’s a real win-win outcome.

Posted by Lynda Bourne on: July 28, 2015 08:00 PM | Permalink

Comments (9)

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"Stakeholder Management" are set of ;guidelines ... but, in a 'pressure cooker' environment one might have ALL the knowledge (and perhaps skills) to communicate and create an healthy 'environment' ... practically, pressures build and often 'explode' ... which is when "Crisis Management" comes into play.

How beautifully you have described the points about the crisis of management, and its totally agreeable and very informative. I think if the project manager read this article and have to understand these 3 points on crisis management then it always run towards success. Thanks for sharing such a nice article

My article is NOT about crisis management and stakeholder management is far more then a set of guidelines. Effective stakeholder management provides the foundation that allows the project team to engage proactively with its stakeholder community, in a flexible and dynamic way, to make sure the needs of most stakeholders are being met by the work of the project.

This level of active engagement eliminates many of the avoidable crises that plague projects run by people who think communication stops at reporting, and the only fixed 'guideline is actively listen to your stakeholders. After that its a collaborative working environment designed to maximize the value created by the project.

Is it not that sometimes we create crisis intentionally as that is our agenda?

Else, if one is willingly engages in stakeholder engagement rather than management, the corresponding stakeholder should also be willing to engage, what if he is not willing to engage?

Now we know, he/she would prefer to manage than engage, one of the options could be to escalate the issue or replace this stakeholder with someone else.

In addition, what if the stakeholder does not have adequate knowledge or experience in the issue we want to discuss or resolve.

Of course, as a minimum, it should be stakeholder management to be positive and proactive and at best should be stakeholder engagement. Depending on the situation crisis management is needed, as at times this helps, when one wants to drive the path/choice selection process

Balaji,

No one in their right mind creates a crisis - a crisis has no predictable outcomes. Crisis management is unfortunately often needed but any manager tries to avoid as many crises as possible.

Similarly stakeholders cannot be changed - stakeholders have an interest in your project and need managing or engaging (refer the PMBOK definition) - they choose you. Your choice is how you choose to manage or engage with the stakeholders you have and occasionally how you reach out and engage others to become more actively involved.

Lynda

I am not advocating crisis management. I am highlighting at times crisis management is one of the most practiced choice due to certain compelling reasons in actual situations. For example, when there are many external stakeholders or when one stakeholder is attempting to create a situation which is more favorable for themselves.

Such issues occur especially in public projects like routing a road. Very influential bunch of people create a situation such that new road alignment is changed such that it favors at the cost of public money. This depends on the country environment where one is operating from.

It could be that I have experienced something very rare and unique.

Stakeholders can be changed. It depends on how much influence one possesses and whom you know. of course this depends on the organization culture. Does not client exercise the option to remove a project team member or even project manager?
Does not project manager goes about exercising his choice of a particular subject matter expert needed or removed from team or ask for replacing a functional manager?

You don’t really seem to understand the power of stakeholder engagement and management Balaji.


Your road scenario - most stakeholders want to manipulate circumstances to offer them the best outcome, its normal - you can ignore this fact and walk into a crisis or you can apply effective stakeholder engagement strategies, identify the potential problem well in advance and take appropriate actions which may include seeking help from other equally powerful stakeholders to reinforce your position or agreeing a sensible compromise. All that is needed is the investment of effort at the right time - this is always lower cost then waiting for a problem to ‘blow up’ and having other people control the agenda.


Similarly I agree you can (and probably should) remove a no-performing or antagonistic team member from the TEAM. But this does not stop the person being a stakeholder - if they feel they have been unjustly dealt with what you have achieved is changing stakeholder who was a non-performing team member into an antagonistic independent stakeholder and given the power of social media this may be a very damaging situation. Obviously if you manage the off-teaming well then the person may simply become a passive low-priority stakeholder. The problem is they will decide how they perceive they have been deal with and they will decide their attitude and action - not you.


In fact, you cannot ‘control’ any of these situation but proactive stakeholder management can significantly reduce the probability of unexpected crises ‘blowing up’ and importantly give you early warning of problems so you can prepare for the crises you cannot avoid.


A really good article Lynda.
I liked the opening and closing sentences the most, viz: "The good news is that how you deal with most stakeholders is largely up to you!" and "you open up to your stakeholders and allow them to help you successfully deliver their requirements." respectively.
I got success by keeping stakeholders engaged through out the project. Yes, it needs a lot of soft skills and a change of attitude.
Thanks Lynda.

The last comment is rather off-track. The point of the post is you will get crisis to deal with if you do not actively engage stakeholders. Effective stakeholder engagement will reduce the probability of needing crisis management. Reduce is of course not the same as eliminate - so dealing with stakeholders post-crisis is still important.

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