Successful Governance: Understanding Your Stakeholders

Understanding Your Stakeholders

Who are your stakeholders? An obvious question, but one that is often overlooked. Recently I spoke with a client who didn’t know the answer to this question.

Sure, the executive leadership teams of each organization were considered critical stakeholders, but who else was being overlooked? After a series of comprehensive interviews within the client and service provider organizations, it became clear that not all stakeholders were identified, and communication relating to strategy, vision and even the mission was not communicated to everyone with a vested interest in the delivery of the services.

As we delved deeper into the organization, SIREAS discovered there was a significant disconnect on the part of the client and provider in their understanding of and communication about the mission.The mission/strategy was not shared far enough down the line within the organizations to reach all of the stakeholders.This created substantial alignment and communication gaps among the teams responsible for implementing the vision and strategy.

Two crucial principles of successful governance are: identifying all stakeholders; and there must be communication and collaboration– at all levels–across the client and provider organizations.

Stakeholder inclusion should be wide-ranging, to include senior executives from both organizations, the operational teams and the “users” of services (employees, customers, suppliers and others).

Communication should occur formally via steering committees and boards, and also informally on the day-to-day operational level. Broad stakeholder involvement results from an effective combination of information exchange and action. For example, a governance group can set up ad hoc advisory teams, pursue the opinions and participation of key business leaders, and offer informal educational presentations that stimulate the exchange of information.

It also is important to balance stakeholder needs so that all parties feel invested and strategically aligned. Companies that successfully outsource continuously “take the pulse” of all involved stakeholders to balance their needs over time. While it may be impossible to please everyone, the governance model should strive to balance the needs of all stakeholders.

Another key governance principle for successful stakeholder interaction involves company cultures. For example, outsourcing facilities management successfully requires a strong relationship with a foundation of trust and collaboration. Finding commonalities between the company cultures of the client and the provider improves results.

Yet, communication is an imprecise science, and misunderstandings can increase when people try to bridge language and experience gaps across functions and organizational cultures. By taking special care to develop a deep understanding of stakeholders’ motivations and expectations, the organizations can negotiate more creative and mutually beneficial solutions.

The most successful outsourcing initiatives have strong governance models that focus on stakeholder involvement, collaboration, trust, and alignment of vision and objectives for the client and the provider.

Successful governance requires regular interaction, a strong flow of information and meaningful action to reach better solutions that more effectively meet each sides’ needs.

But first you start by knowing who your stakeholders are.