Beyond Crisis Management: Are You Breaking Bad Stakeholder Habits?

 

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.