Training

Background: Already some time ago I have developed and since then given a stakeholder training. The training is basically an exercise in using a framework which allows the participants to structure the complex reality that working with stakeholders often is.

Goal: Using this framework, which the participants will be able to do fluently after the training, will allow a manager to assess the importance of particular stakeholders at a particular point in time. This in turn will enable the manager to prioritize the stakeholders in terms of which resources (money, time) to spend on which stakeholder and when.

Set up: The training and the resulting ability to work with the framework will also improve strategy, both in terms of strategy preparation and in terms of strategy implementation. In terms of strategy implementation, because assessing the background and importance of stakeholders can help in  developing a more complete and robust strategy. In terms of implementation, because often strategy implementation is frustrated due to conflicts with stakeholders, which were not realized at an earlier stage.

Target group: The training is intended for anyone involved in connecting their organization to stakeholders, be they in an head office role or more directly engaged in the business.

Duration: The training in understanding and using the framework that has been designed for the training takes but a day, while it is recommended to repeat the training after a few months in order to affirm its place within the skill-set of the manager.

Benefits:

• those trained will improve their skills in listening and empathy
• those trained will be skilled in using a conceptual framework for engaging with stakeholders
  

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Stakeholder thinking

Stakeholder thinking in general
In general terms, stakeholder thinking starts from the realization that there is a complex reality "out there", which consist of a variety of players who may or even will have an impact on you, for instance because you have an impact on them.

Stakeholder thinking and strategy
Stakeholders are of essential value to strategy. They can help you build a robust strategy and they can, if they are ignored or not properly understood, frustrate your strategy.  Increasingly, as realities become more and more complex and dynamic, strategy is not so much any more a matter of planning, as it increasingly is a matter of being prepared for eventualities.For that reason, the type of strategy that is most suited for doing justice to stakeholders is scenario thinking.

Stakeholder thinking and systems thinking
Stakeholder thinking requires the capacity to deal with systems  and act on systems. Stakeholders often impact on each other, as well as on you. What motivates them may be connected or it may not. Hasving an impact on them may disturb some balance between other stakeholders. In short, it can become very complicated. Seeing stakeholders one at a time adds to the complication, while it is clearly preferable to see stakeholders in their systemic inter-relatednesses. Stakeholders constitute dynamics of their own and seeing them from the perspective of systems thinking helps in coming to terms with the dynamics that they present.

Stakeholder thinking and risk management
Sometimes a company is forced into stakeholder thinking as the result of a crisis, which may or may not be of its own making. Think of a product recall. Through some error in one of the factories, a whole batch of your products has become unreliable and you decide to have them recalled (or the government forces you to do so, after the first reports from hospitals reach the media.) In order to deal with such a crisis, in which the stakeholders will typically announce themselves at your door, you have to understand the stakes of the various stakeholders (e.g., the politician, the newspaper editor and the consumer will all have different interests) in order to know who to talk to, how fast and what about. If you do not understand them as stakeholders, you are likely to respond to the "loudest mouth", which may not be the person with the most legitimate claim for your attention.

Stakeholder thinking and corporate social responsibility
There are moral reasons for paying attention to stakeholders. According to various ethical traditions, one has a responsibility towards the people (and rest of reality) on which one has an impact. The modern notion of "corporate social responsibility" means that society has come to expect managers to honor those responsibilites. In other words, society has come to realize that it consists of stakeholders.

From stakeholder management to stakeholder engagement

While some companies are new to the notion of stakeholders, others have already quite a lot of history with a stakeholder approach, and have moved from stakeholder management to stakeholder engagement. What does this shift mean? It may well mean that in those companies they have come to understand that stakeholders can not be 'managed' in the classic sense of 'management'.  Stakeholders may even object to being 'managed' and relations with them may become difficult as a result. They prefer to be met, not managed.
That means that they will require a different mode of communication than had they been subject to ' managing'. They expect to be listened to, while at the same time as a company you can not indefinetely create expectations in that process. They expect honesty and to be treated with respect, and so do you.

Dialogue is the most suited form of communication in engaging with stakeholders. That does not mean that every moment of communication will have a dialogue quality, because sometimes you havce to be directive or argumentative, but at least you have to be comfortable with the dialogue mode of communicating in order to effectively communicate with stakeholders. Characteristic of dialogue is that it is explorative. Ever since the dialogues of Socrates, dialogues were ways of exploring reality. It thrives on inquisitive minds. Being able to be inquisitive with the stakeholders helps in engaging with them. But then the next skill is also important: switching from the dialogue style to a more debating type of style, once interests/ stakes have been explored and understood, and the various stakeholders very understandably turn to defending those interests.

Sensemaking is an important aspect of stakeholder engagement. It means that it has to be realised that every stakeholder has a reason - a stake - why he or she (or it, in the case of a group or organisation) is in fact a stakeholder and that every stakeholders has a particular way of making sense of the reality related to that stake. In engaging with stakeholders, it is not enough to know the stake; it is important to understand the thinking behind the stakeholders attitude towards his or her stake. Is it important to the stakeholder or not so much? Is it connected to the stakeholder's culture or personal identity, or not? Are the interests of the stakeholders connected to their respective value system and, if so, how? Other questions will present themselves.

Who are stakeholders?

That is a difficult question. Traditionally, a distinction is made between "primary stakeholders" and "secondary stakeholders". This is simply the distinction between those stakeholders who are directly related to the company's primary processes on the one hand and stakeholders who are not in that way related to the company on the other hand. Most companies have a long history of dealing with primary stakeholders, such as owners, employees and customers, although also there often much can be improved.
It becomes more complicated, however, with secondary stakeholders.  Some secondary stakeholders can not be avoided, such as various governmental bodies, which may have power over licenses and demand the payment of taxes. Others can perhaps be predicted, such as the neighbors of the facilities of the company. other are perhaps less easy to predict, such as NGO's claiming to represent nature or the  quality of life of future generations.

It is most important to realize that stakeholders have their own dynamic.  They have their interests from their own processes of sensemaking. It is not relevant whether you agree with that sensemaking, but that you realize that this is happening and for reasons which are typical of the stakeholders involved. In order to meaningfully interact with stakeholders, it is not only important to understand the interests (stakes) of the stakeholders, but also the attitudes and ways of thinking from which those interests are approached by the stakeholders.

Issues concerning stakeholders

One complication in dealing with stakeholders is often that many stakeholders are represented by other stakeholders. Sometimes that can be an advantage, as when you are not dealing with all employees, but only with unions who represent them, or with all neighbours, but with a representing committee. But it can also become problematic. For instance, someone can claim to represent stakeholders, but does it so poorly that it is best to deal with the stakeholders directly, at the risk of antagonizing the representer. Or several representers can claim to represent the same stakeholders and it becomes puzzling to find out which expression of the stakeholder's interests is actually best. What is also often the case is that the representer is an organization, e.g. an NGO or a trade union, which will quite understandably have its own organizational dynamic and interests, which may confuse the issues of those who they represent.

Dealing with stakeholders requires a certain finesse in expectation management. Typically, stakeholders will have interests which connect them with you. They may well have expectations from you, aroused perhaps by your attempt to communicate with them. However,you can not please them all, nor are you under any obligation to do so. After all, not all desires of stakeholders are reasonable. On the other hand, dismissing those desires outright might cause conflict where conflict could have been avoided.

There often is a gap in terms of knowledge between the organization and its stakeholders. For instance, if a chemicals firm wants to expand one of its facilities, the professionals within the firm will have detailed knowledge about this project and the firm will typically have made, often also under force of law, a risk assessment and/or an environmental risk assessment. The neighbors do not typically have such knowledge. Still, it is their safety that is at stake. Then it may seem as if communicating with them is a matter of "waking up the sleeping dog". Still, avoiding that and later finding the dog angry, to stay with the metaphor, is probably not wise.
It has to be realized that in dialogue a gap in knowledge can be a problem. The fact that one dialogue partners knows more than another dialogue partner does not do away with the principle that they are both entitled to have their say and to be listened to. In fact, as was once expressed in the Rule of St. Benedict, the most junior may be the one most entitled to speak.

Last, but not least, there is the issue of priorization. The mistakes that some companies make is that 1) they prioritize stakeholders according to their personal preferences and 2) they treat that prioritization as static. However, it is usually wiser to prioritize stakeholders in terms of the impact that they can have on your organization, even, or especially, when you do not see why they would be so important. Also, it is usually best to change the prioritization from time to time, as in one particular case it can be completely different from what it would be in a different case, perhaps only days apart.

One final word of advice: beware of assumptions. When you think you know the potential impact of particular stakeholders and you think you understand their interests, that is usually where you forget to communicate with them about that and you just might be mistaken.