When starting a contract management relationship, it’s essential to remember that there will be many stakeholders, both internal and external to your organisation. Undoubtedly, they will include stakeholders will not be immediately involved in the acquisition or the provision of services.
The identification of these stakeholders prior to the start of a contract will assist you in its management. Failure to identify and engage with stakeholders early enough, can have major repercussions. The identification process includes looking at those who will be affected by the service provision, this includes both end users and the service provider. Others include those who have power (including influence) over it and stakeholders who have an interest in either its success or failure.
One way to approach the identification of stakeholders is to mind-map, via a brainstorming session, who they are.
Figure 1: Mind-map example of stakeholders involved with a new mailroom contract
Stakeholders are normally identified by one of four quadrants (see Figure 2 below) dependent upon their power/influence and interest, these are:
- Those who require minimum effort and only require monitoring (low interest & low power/influence). These are worth monitoring but require little communication.
- Those who must be kept informed (high interest & low power/influence). These people are often very helpful with specific details, and they can also provide indications to any major issues that might be developing. They need to be adequately informed and communicated with.
- Those who must be kept satisfied (low interest & high power/influence). These require careful communication; sufficient to keep them satisfied but not enough to make them bored of your message.
- Those who must be involved and managed closely (high interest & high power/influence, i.e. the critical ones). These are the ones with whom you must be fully engaged with, and whom require your greatest efforts in-order to satisfy them.
When communicating with stakeholders outside of your organisation, consider who else may read your correspondence or might be listening.
Figure 2 below shows the actions required to be taken towards the identified stakeholders dependent upon where they are positioned on the grid.
Figure 2: Stakeholder prioritisation grid
The original mind-map can then be annotated to show the prioritisation of the identified stakeholders. See Figure 3.
Figure 3: Stakeholders prioritised
Having identified and prioritised stakeholders, you need to understand how they are going to feel and react. It’s also important to choose the best way to both engage and communicate with stakeholders. This will ensure that all stakeholders feel they have had the opportunity to communicate their respective concerns, even if they were not accepted.
Difficulties arise when stakeholders’ concerns have not been recognised or considered, yet they turn out to be key to the contract’s success. So, it’s worthwhile spending time with stakeholders from the outset, to try and mitigate unforeseen risks and their potential critical effects.
You need to understand your stakeholders and what motivates them, to be able to win them around. Not all stakeholders will be supporters or advocates of the contract, some will be indifferent, whilst others will be either blockers or critics. A good way of identifying stakeholders’ positions is to talk to them directly, asking them about their view(s) and opinion(s) on the contract. Doing so can help build successful relationships, and identify previously unforeseen issues.
Before talking to stakeholders have a list of questions prepared to ask them. The questions you ask may include:
- What information do they want from you?
- How they want to receive that information (i.e. the best way of communicating your message to them)?
- Regarding the contract, what motivates them most of all (i.e. what do they expect to gain from it)?
- How do they perceive the contract effecting them personally?
- Will it interfere with their operations?
- What financial interest do they have in the life of the contract?
- What emotional interest do they have in the success of the contract?
Having spoken to a stakeholder, ask yourself:
- Could the stakeholder contribute knowledge or experience relative to the contract?
- What organisational authority does the stakeholder have?
- Will someone influence their opinions on the contract, and if so have you got them listed as a stakeholder if felt to be important?
- What might the stakeholder lose because of the contract (e.g. reduced financial responsibility, loss of direct authority, loss of in-direct authority, etc.)?
- Is the stakeholder likely to have hidden agendas?
- If the stakeholder is unlikely to be positive, what would win them around?
- If you think you can’t win the stakeholder around, how will you manage them?
- Who might this stakeholder influence, and do any of the influenced people warrant becoming new stakeholders?
- How could the stakeholder hinder the mobilisation and or operation of the contract?
- Stakeholder positions can change during the contract, and this is something to be aware of.
The answers to the questions will allow you to summarise stakeholders. A good way of doing this is by assigning them a number which corresponds to their position towards the contract, i.e.
These can be added to Stakeholders Prioritised mind-map (see Figure 3). An example is shown below in Figure 4.
Figure 4: Stakeholder understanding
It’s essential to identify stakeholders as early as possible when starting a contract management relationship. And to engage and communicate with them. These stakeholders can be both internal and external to your organisation. Each will have their own views and opinions on the contract. To ensure success these need to be captured, so you have an understanding of what motivates them, and the level of support they will provide.