The concept of ‘Leadership’ almost always focuses on the leader’s relationship to their followers. These are their team members and supporters, and those who look to the leader for inspiration, guidance, and direction. But not everyone looks towards the leader. What about other stakeholders? Yet, if you seek to lead, you cannot leave them behind. This is the role of Stakeholder Leadership.
Engaging your stakeholders, the undecided fence-sitters, and your opponents; and working with them to win their acceptance, and maybe even support, is the mark deep leadership.
It is not just about winning them over and converting them to ‘your side’ – desirable as that may be. People often have a wholly reasonable cause to disagree, and how you treat them is a mark of the quality of your stakeholder leadership.
I refer to the method you use for leading stakeholders as your influence agenda. It is the process of identifying and understanding who you need to influence, and of putting together and implementing a deliberate plan of influence.
The process is straight-forward. Take a look at this diagram.
Here’s a short video that outlines the process of stakeholder engagement…
Identify Your Stakeholders
The first step is to identify who your stakeholders are. Consider individuals and groups. The simplest and often the best approach for this is to gather a small group of trusted colleagues and ask them to suggest anyone they can think of who might have any interest in your what you are doing.
It is at this step that you also need to identify your goals for engaging with these stakeholders: what do you need to achieve to support and enhance your stakeholder leadership? Do this in the context of your organization’s purpose and goals, and those of whatever division, unit or initiative you are leading.
An excellent tool, illustrated above, is a Proximity Map. Use this to help you spot different stakeholders at different levels of proximity to you and your core concerns. Your supporters are the easy ones: what about the rest? Next, you need to think more carefully about each of them.
Analyze Your Stakeholders
Once you have identified who your stakeholders are, the next step is to analyze them. The more you understand about them, the better equipped you will be to engage with them and lead them effectively. You also need to develop a prioritization so that you can focus your limited time and resources on where they can have the most effect.
Stakeholder Leadership Resources
It is at this step too that you will need to inventory the stakeholder leadership resources you have available: your assets, skills, character, abilities, and also the commitment of your supporters to help. Matching these up to your stakeholder challenges effectively will be a key factor in your success.
Stakeholder Analysis: The Big Six Factors
Of all of the many considerations that you will identify for your stakeholders, I consistently find that the ‘Big Six’ characteristics dominate my thinking in terms of the practical actions I will want to carry out. These are:
Table: The Big Six Stakeholder Characteristics
- Their Interests
What will influence their decision-making – for example: financial, political, social, moral and commercial concerns?
- Their Needs
What, for them, is non-negotiable?
- Their Attitude
To you and to your wider leadership agenda
- Their Impact
How can they affect you and what you are trying to achieve?
- Their Power
To what extent can they impose their will over people and events that matter to you?
- Their Influence
How can they affect other people’s attitudes and behaviors?
I recommend our article: ‘Do You Know the Top 20 Techniques for Stakeholder Analysis?’.
The Pareto Principle for Stakeholder Leadership
Of course, there are more factors that may be relevant to you (I list 26 in total for individual stakeholders and a further 9 for stakeholder groups in The Influence Agenda), but addressing these big six will often get you most of what you need. This is a manifestation of the Pareto 80:20 rule, that something like 20% of the factors dictate something like 80% of the outcome.
This is also true of the stakeholders themselves: something like 20% of them will have something like 80% of the impact on your leadership. In particular, we ought to single out the very small number of stakeholders who can each influence many other stakeholders. Yet these stakeholders themselves are often very little influenced by the people around them. They are hard to influence, but they offer you a lot of leverage if you can. They are your ‘Apex Stakeholders’.
Where you have apex stakeholders you must give them a lot of your attention. Leadership must be a subtle thing. They come in three flavors:
- Powerful allies are Apex Supporters
- Potentially dangerous adversaries are Apex Agonists
- Stakeholders who are waiting to be persuaded are Apex Neutrals
Because of their sense of independence, it is not a simple task to influence Apex Stakeholders; they will not be easily persuaded. You need to build their trust and tap into their thinking by allowing them to share their ideas and concerns. You must then be sure to make use of their contributions, responding to their ideas and embracing those that have merit.
When an Apex Stakeholder shows enthusiasm for your leadership, shower them with support and offer resources to help them make your case for you. Keep this appropriate of course – not just for the sake of due propriety, but because you do not want to offend their perception of their independence of mind.
Apex Stakeholder Leadership
When you are able to influence Apex Stakeholders, you become the Apex Stakeholder and can, through them, dictate the agenda of many of your stakeholders.
Sociogram for Stakeholder Engagement
Apex stakeholders occupy a pivotal position in a web of influence. Another useful tool for analyzing your ecosystem of stakeholders is a sociogram, or social network diagram like that below. In this chart, all of the stakeholders appear as nodes, with connections between them shown by lines. We cluster Stakeholders to give a crude representation of the organizational proximity, but this may not match all of the forms of influence.
We can enhance the amount of information we put onto our sociogram by using arrows to depict the direction of influence, so that if A primarily influences B, then arrow points from A to B. If A and B can equally influence one another, then we can use a double arrow. We can also use line thickness to indicate the strength of relationships or level of influence, a thicker (or double) line indicating a stronger link.
In a sociogram, Apex Stakeholders tend to show up as occupying hub positions, connected to many other stakeholders. They can also show up as connectors: stakeholders whose influence spans two or more groups.
Plan Your Stakeholder Leadership
Once you understand your stakeholders and resources, it is time to build a plan. Avoid the temptation to dive into leadership straight away. Instead, create a structured yet flexible sequence of actions that are designed to achieve the strategic results you need. The broad thrust of your plan will arise naturally from your analysis, but each situation and every stakeholder is different. So, your plan needs to be tailored to the detail of the circumstances.
An essential component of your plan is to devise the messages you will convey at each stage, along with your choice of media and the tone you want to strike. Communication is at the heart of stakeholder engagement.
I recommend our article: ‘How to Plan Your Stakeholder Engagement Campaign’.
Your plan will be built from one of many possible core strategies that depend on the extent to which you wish to actively engage with them (or withdraw from engagement) and the degree of collaboration or competition you choose to foster in your relationships. The chart below sets out the range of possible strategies.
We looked at this in far more detail in our article: ‘This Set of Stakeholder Engagement Strategies will Power You up’.
Frame your Relationships with Stakeholders
A second important aspect of your planning will be how to frame your relationship with the stakeholder. The frame will set the tone of your thinking and theirs.
For example, the ‘Blame Frame’ establishes a dialogue about fault. It is rooted in the past and can serve little purpose in either making progress or strengthening the relationship.
Your frame will guide both parties towards a common interpretation of what the issue is about. Your stakeholder may not accept the frame, but we know from psychology that when one person starts a dialogue confidently asserting one piece of information, or one interpretation; this can create an anchor that draws the other person’s perspective in that direction.
Examples of Constructive Frames
Three examples of constructive frames (from among 16 listed in The Influence Agenda) are:
- The Choices Frame
Focuses discussion on the options and on making decisions. This frame is very much future-oriented, creating a sense of control for the stakeholder – avoiding the perception that they are being backed into a corner.
- The Critical Frame
Look for risks and points of failure to give the stakeholder a feeling that their concerns are being respected and incorporated into the process.
- The Outcome Frame
Focusing on what the stakeholder wants at the very end of a process; the end rather than the means. Use this frame if the process is uncomfortable but the result will yield real benefits to your stakeholder.
Act: Lead Your Stakeholders
Stakeholder Leadership means you have to get out there and engage with your stakeholders. You have to listen, ask, persuade, cajole, tease, induce, counter, appease, collaborate, and more.
And as you do that, you will have successes and setbacks. Sometimes you will have to deal with resistance; resistance to your ideas, to your leadership and to the change you are trying to promote. You have three clusters of tools available to you:
Gentle persuasion, or ‘Soft Power’
Gentle persuasion often achieves more than stronger tactics ever can and it is fundamentally based on liking. We do more for the people we like than for those we either don’t know or don’t like. So, what is the secret to being liked? Let’s ask a selection of people to get some typical answers:
‘I like people I trust’
– so, practice openness and integrity so people feel they can trust you.
‘I like people I see often’
– this may be a case of chicken and egg, but increase the frequency of meetings.
‘I like people I can believe’
– so, demonstrate your credibility and depth of knowledge and experience.
‘I like people who listen to me’
– so, take time to focus on people and what they are saying.
‘I like people who help out’
– so, offer practical assistance.
‘I like people who respect me’
– so, don’t enforce unwanted assistance.
‘I like people who are like me’
– so, demonstrate how our interests and perspectives overlap.
‘I like people who are like I want to be’
– so, set high standards and a good example, without bragging or arrogance.
‘I like people whom the people I like, like’
– so, associate with the people I like, trust and respect.
‘I like people who make me feel good’
– so, smile, offer sincere praise, and show me you respect me.
Hidden Power, or Behavioral Economics’
This is a theory of decision-making, popularized in the book, Nudge, that starts from the position that human behavior is often irrational, yet it is largely predictable, if we can gather enough social, emotional, and cognitive data. If we understand the patterns well enough, we can exploit our knowledge to lead stakeholders. We can ‘nudge’ them to do what we consider right.
Perhaps the most feared aspect of stakeholder engagement is dealing with resistance. We sense the potential for the situation to escalate to conflict and few people welcome that. Yet we also know that resistance is all-but-inevitable. This knowledge can, therefore, prevent us from properly engaging with stakeholders, for fear of the resistance that we will, at some point, encounter.
As a leader, you need to understand how to diagnose and handle resistance in a positive and respectful manner. Take a look at our article on how to handle stakeholder objections.
Review Your Stakeholder Leadership
The process so far is guaranteed to work… sometimes. Real, sustainable success comes through perseverance. You need to monitor what you are doing and constantly evaluate the results you are achieving (or not) and feed that new knowledge into revised plans.
Day-by-day and even hour-by-hour, you will be making changes to your approach to adapt it to the new prevailing conditions, to the changes in your stakeholders’ perceptions and to new events.
Stakeholder Engagement Tips
What are Your Thoughts about Stakeholder Leadership?
How you handle all of your stakeholders will be the basis for how you are judged as a leader. Happily, The Influence Agenda gives you a process and a powerful toolset to do this. But it is not enough just to engage with your stakeholders: if you want to lead with integrity, you need to do so in an ethical way.
I have crafted a set of six commitments for ethical stakeholder engagement, in the form of a charter. I invite you to sign it, to share this charter (you can download a copy), and to encourage colleagues to sign it too.
Please Share Your Experiences, Thoughts, and Questions
Please do share your comments with us, below. We’ll respond to every contribution.
A version of this article first appeared in Training Journal, May 2014.