Our High Performance teams series now enters the second part of the Execution pillar of HP Teams: Stakeholders.
So, in this episode we cover:
- How one conversation saved a client $15M;
- Why not managing stakeholders is the number one cause of project failure;
- How it is the most important point of trust for accelerating your career.
When stakeholder relationships go bad
I’d like to start with a bit of a story from one client who saved $15 million in one conversation. In 2016, I was working with a mining company that was going through a major transformation in Africa. And one particular mine site was going through a huge transformation in the way that it produced gold. What they needed were parts to be delivered faster and be of better quality, which would result in better uptime for their machinery, and that flowed on to greater production ie. more gold out of the ground, more quickly.
The challenge was that their supply chain team was sitting in a different city and they were under a different strategic objective, namely to reduce the cost of the supply chain. So, immediately you can see how the two KPIs that they’re driving towards differ; one is trying to get high-quality parts faster, while the other is trying to reduce costs, which often means reducing quality.
As a result, when the mine was trying to operate, it constantly found that machinery which was breaking down or needed to go through a service, just wasn’t being fixed fast enough and it was costing them enormously. The company worked out that this was costing them $15 million every six months! The relationship became more and more strained, and no matter how many meetings they had, they just couldn’t agree on the way forward.
The fix? A simple conversation
First and foremost, we broke down what was really going on with the conflicting KPIs and conflicting points of focus. We got right inside the head of the stakeholder and then they got on a plane and went to the other city where the supply chain team was. Their number one goal was to build trust, to seek deep understanding and get on the same page with a unified strategy.
This meeting took about three to four hours to solve all the problems and within a few weeks, all of the challenges they had around the supply chain were fixed. They had the right parts turning up in the right quantities and now production could go ahead at a normal rate.
Why are stakeholders the problem?
This happens all the time in business where different business units or teams end up at loggerheads and it costs the company time, resources, reputation, customers, toxic culture, etc. And this is the real truth about stakeholders: they will be the number one reason why your projects will fail. Those relationships are the ones that really lead to problems and delays in projects.
Almost every leader in the business is probably going through some form of planning about how they can improve their particular area. However, this planning generally happens in isolation of everybody else and so they’re not communicating with each other and therefore not look at what they need to be doing as an entire business. As a result, everyone is going in different directions and if you extrapolate that out to each department, what you get is a whole range of conflicting priorities.
So how will this play out for you? Well, let’s say you need some help from a particular stakeholder. You go to them, ask their opinion, a report and maybe some time from their people. But what they’re thinking is that it doesn’t help them achieve their goals. Furthermore, you’re the 15th person who has asked for a piece of their limited time. So when everybody’s asking time from everyone else for all their projects, the business becomes overloaded very quickly, and in the end, no one is fully successful.
…but how can stakeholders be the solution?
There are five different types of stakeholders that you need to manage: there’s your boss, other executives, peers, customers and suppliers.
The easiest way to flip the dynamic to get what we want is to attempt to work with all the other stakeholders to ensure that there is one set of priorities. If you can see immediately that there are any KPIs that conflict with each other, then you will be well served to solve those conflicts first. So how do we achieve this?
1. Change your mindset
The most important factor in achieving your outcomes is trust. I had a client who said she was struggling to engage a few general managers to support her in a particular project. But when we looked at her mindset, it was that the other person needs to get on her page. What she actually should be doing was to simply build trust.
Furthermore, it is to think long-term and be patient about building that trust; you won’t shift them 100% in one meeting. Just leave them in a better place about how they think about you each time you meet.
2. Map out your stakeholder base
I map all stakeholders on a matrix: on the vertical axis is the stakeholder importance (this is in relation to the success of your projects and your career) with the following labels – zero, important, and critical. Then on the horizontal axis we have the following labels of stakeholder status – a detractor, an advocate, or an ambassador.
3. Prioritise the conversations
Start with detractors who are critical stakeholders – they’re holding you back and restricting success.
Next is someone who is critical and an advocate – they’re not necessarily promoting you, but they’re not a detractor.
Finally is someone who is critical and an ambassador – why this is so crucial is that when you’re not in the room, this person is saying that you are the right person for the job.
This approach allows you to focus your effort in relationship-building.
If you’d like a PDF version of that matrix, please just email me at [email protected].
4. List their most important issues
What kind of personal pressure is their boss and other leaders putting on them? What are their non-negotiables and bonus-linked targets? What are their KPIs? Then we’d talk about what all, get inside the head and ask ourselves, what are their major issues? What’s currently happening in the business that’s keeping them up at night? What are the top three issues they face personally every single day?
5. What do they think about you?
What level of trust do I have? Have I delivered for them previously? These are important questions because if you’ve never delivered for them (this could be because you’re new or not worked with them before), they probably don’t trust you (yet!). You might have to take a few hits on this particular section – be honest with yourself!
6. What’s in it for them?
What’s their buy-in? By working with you, what are the benefits for them? What solution can you provide to any of their issues, commitments or pressure right now? Can you help them solve another problem in their business? How can you be certain that what you’re doing won’t sacrifice, or detract, or even take their focus away from their key project?
7. What outcome do you want?
This is beginning with the end in mind. After the next meeting I have with them, what do I want them to think, feel and do? What commitments do I want?
8. How will you approach it?
What messaging and actions would you take in that meeting? Define the conversation to get the desired outcome.
Chief, this is a vital skill. As you rise up in the organisation, stakeholder management is absolutely critical for having a fantastic culture, having a business that grows and works, enjoying your career, and accelerating your career.
Even if you’ve got a stakeholder that you think is acting like a complete pork chop, it’s up to you to take ownership of the problem. Don’t blame them – you’ve got to drop that victim mentality and ask yourself, “What have I got to do to understand this person better so that I can be the one that builds the bridge and creates that trust?”