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As part of the pre-residential school’s EBI preparatory work, I’ve been reading Ackerman and Eden’s (2003) speech on powerful and interested stakeholders. In general, they advise managers to assess in a group environment all stakeholders who they think could support or derail their strategic plans. By undertaking this type of analysis, it is suggested a more proactive style of stakeholder management could occur.

Ackerman and Eden (2003) advise using three techniques in the process of proactive stakeholder mapping. Firstly, create a power interest grid with all the perceived relevent stakeholders plotted on the matrix. Secondly, filter the list down to the most important few and create star diagrams to analyse the influential interconnectedness of your key stakeholders. Thirdly, role-think what these stakeholders may think of your strategic plans and develop ways of working with them to achieve your organisation’s strategic goals.

In principal, I think that analysing the environment your organisation operates in and the potential impact other organisations, not just competitors, can have on your strategic plans is obviously good practice. I recently experienced a situation whereby the Residents’ Association of a block of flats where I own a garage en bloc has decided to erect a keypad entry gate without prior warning or notification to non-flat owners.

This access point to the garages has been un-gated and open access since the estate was created in the late 1970s. My house deeds also state that I have access from this point of entry at any time despite not owning a flat in the block of flats where my en bloc garage is situated. My neighbour who owns the last garage, and is also a house owner, has had her garage damaged by the anchoring of the gate-frame to her property. She only found out a gate was being erected when she was parking her car in her garage the day they happened to be there working!

Obviously a lot of telephone calling has ensued over the last few weeks because of this poorly thought out action by the Residents’ Association. I was even visited by the Chairman herself, who crudely said that as they owned the freehold they could do what they liked and they were going to notify us after the keypad code went live anyway. When I pointed out that there were about 30 other householders that also own freehold garages on that plot and that they all needed to be notified of the code to the gate she seemed shocked.

Clearly at lot of aggravation could have been minimised if the Resident’s Association had taken the time to communicate to all garage owners that they wanted to erect a gate, and found out who legally owned them in the first place. A consultation process could have been followed and a case made to all the freehold garage owners about why it was necessary to erect a gate. This type of action would have avoided the clear breach of trust that has now occurred.

What I worry about, however, when undertaking stakeholder analysis, particularly as a group activity is that the wrong stakeholders are flagged up as the main “players”. Surely one would have to avoid groupthink and reinforcing each other’s biases during this process. In the OU B820 Strategy module, Monsanto, a US biotechnology firm, is used in unit four as a case study to illustrate just how badly you can underestimate the power of your stakeholders, despite undertaking this type of analysis. Monsanto believed that the clear benefits of GM crop-growing outweighed the negatives. Unfortunately the general public, the end customers and consumers of foodstuffs, made it quite clear that they would not buy or consume these products anytime soon in Europe.

No doubt the Monsanto case illustrates an extreme example of thinking that you have the main stakeholders on board (government, farmers and scientists in this case), but I think in this rapidly changing world, organisations need to anticipate changes in primary and secondary stakeholders regularly. The advent of social media can rapidly turn consumer sentiment against an organisation within a matter of days now; there is clearly little room to get things wrong.

References:

Ackerman, F. and Eden, C. (2003) “Powerful and Interested Stakeholders matter: Their Identification and Management”, Strathclyde University, Glasgow.

Open University, (2007) B820, Unit 4, “The Organisation: Stakeholders, Purpose and Responsibility” Milton Keynes, Open University, pp 29-31.