Politicians and entire governments have fallen, through failing to recognise the views of stakeholders; Chairmen, CEO’s and whole boards have lost the initiative by ignoring how those with influence feel; you too could fail in your procurement leadership role, if you choose not to engage the entire subject of stakeholders.

You can also fall fatally on your sword if you pay lip-service to stakeholders, or patronise them, or, even worse, seek their views and then dis-regard them.

And if you really want to brass them off, talk about stakeholder ‘management’, rather than ‘engagement’; talk about “mapping” them; label them as ‘negative’; describe their views as “irrelevant”…are you getting my drift?

I come from a school of thought that in the process of successful procurement, there is a mission-critical requirement to embrace and engage the people who can or will be affected by what you are trying to achieve, in business-as-usual, and in the development of new strategies. Pass this opportunity over at your peril.

Who then, is a stakeholder? Let’s use an example.

In the travel and meetings category, who are the stakeholders? Those who make bookings? The actual travellers or meeting organisers? Their functional managers? All of the above? What’s your view?

My belief and my experience tell me that anyone in the organisation who has the power, influence, or authority to either ENABLE the success of your strategy, or DISABLE it, is a stakeholder.

In my travel example, the Sales, Finance, and HR Directors, may well be stakeholders, because a policy of classes of travel or hotels which meets the objectives of convenience, budget control, corporate image, and attractiveness to their staff, has been adopted. That policy has been communicated and is being enforced.

The sales-force, however, are not stakeholders – they are users, or internal customers.

In this example, the sales-force’s requirements need to be collected and taken into account, and their boss has to sign these off as legitimate requirements.

Your procurement job is to devise a strategy that fulfils their requirements (and those of others), implement and roll-out the strategy, and measure the benefits and the compliance.

If you devise a strategy that the Sales Director doesn’t buy, or that fails to meet the sales-force’s legitimate needs, you are doomed! That strategy is going nowhere!

A stakeholder then is a key influencer in the organisation; you need to identify them, and you must embrace them in your day-to-day activity, and in the process of making changes.

I am continually asked how many stakeholders should be engaged in a sourcing strategy’s creation, and how they should be engaged.

On the ‘how many’, there is no standard answer – there is instead good practice for identifying the stakeholders, and for establishing what they need (their legitimate business requirements), and for building a picture of how receptive they are to your approach.

There could be 2 of them, there could be 22, but if you think you have identified 222, you have not understood what you’re trying to do here – do not plan for early retirement!

How stakeholders should be engaged is more formulaic, at least in process terms, but your success will ultimately be determined by your behaviours and your personal style in engaging these people.

Starting at the top, do you have a clear mandate for your intervention in the category of spend, and do you have clear sponsorship? If you cannot answer “yes” to both of these, take a step back (although as a caveat, your sponsor may also be a key stakeholder).

Next, do you know how the category currently works? What is the policy and strategy, and what actually happens? What are the metrics, what are the market dynamics, what are the technology drivers in the category, what are competitors doing, is the spend forecast to rise or fall, how critical a category of spend is it to your organisation, who are your current suppliers, what are their strengths and weaknesses, what is our current relationship with them, and so on?

Your category team, the people you have enlisted to help you develop and deploy a new strategy, are key in all of this. They must work with you to identify the stakeholders and to assemble the facts and data.

Then, with the knowledge you have amassed, welcome to the world of stakeholder engagement, the world in which you and the team decide who engages which stakeholder, and how you ensure that the engagement is a truly bilateral process.

I advise you against megaphone communication – that is for crowd control, not for stakeholder engagement. You and your team must ensure that the way you engage your stakeholders is mature, consistent and drives the debate constructively. Your role in stakeholder engagement is to bring their legitimate views and concerns to the party, keep them informed with progress, and involve them in key decision-making (without turning the whole thing into a debating society).

The overall objective is to ensure that in the actions you take, and the strategies you develop, your stakeholders willingly take ownership – they can identify with what you are proposing, they recognise it, they are happy to take the baton, and move forward into implementation. That is your initial measure of success – clearly speed of deployment and subsequent compliance also matter.

This is also the route to building constructive ongoing relationships with your stakeholders, who, over time, will become increasingly appreciative of your inclusive approach, and the value of your activity.

Remember though, that there will be some turnover in your stakeholders, and their priorities may shift – in either case, you will need to re-engage.

The overall point is, that if you devise an approach, and then you have to try to sell it to your stakeholders, you have not understood the subject.

Go back to the top of the article, and read it again!

February 2017

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