Why It Pays to Engage Early with Stakeholders - key people in your deals - in Changing Times
Well, it’s been a couple of weeks now since the Chancellor of the Exchequer, Kwasi Kwarteng, shared - that is, attempted to sell - the details of the so-called mini-budget with the nation.
To say it caused some disruption would be a bit of an understatement, I’m sure you’ll agree.
However, was it all a smokescreen for something else? (see PS at the very bottom)
Miscommunication from the start I’d say...there was nothing ‘mini’ about this budget:
The £ plunged to US $1.03 – the lowest since Britain went decimal in 1971.
Rapid and alarming rise in the costs of UK government borrowing.
Mortgage rates increased sharply and over 1,600 mortgage products withdrawn in 24-hours
The Chancellor has now made what, in politics, is referred to as a ‘humiliating U-turn’, as he abandoned plans to scrap the 45p tax rate for the UK's highest earners (over £150,000 per annum).
Was the "Pushback" Surprising?
Not when you realise that he didn’t even have "buy-in" from fellow Tory MPs, i.e. the most key of his key stakeholders.
I can’t help but ponder the situation and wonder "Could this - or should this - have been handled differently"?
After all, there are always lessons to be learned, particularly when things don’t quite go to plan.
The take-home message for me has to be:
Don’t underestimate the Importance of engaging stakeholders early
What are the benefits of engaging early with your stakeholders?
Image Credit: The Big Short
In short, it allows people to get a clear understanding of your goals and objectives - especially when you're considering making potentially controversial changes.
· Provides opportunities to gain knowledge and initial insights from stakeholders
· Helps identify potential risks and "blockers" upfront
· You can respond directly to their feedback
· Facilitates the development of relationships
· Increases trust
Conversely, not communicating beforehand could easily be seen as arrogant or naive - often 2 sides of the same coin - and equally unwelcome.
OK, so that's amongst the benefits of talking to stakeholders early and they should be fairly obvious to most of us.
4 Top Tips to Manage Stakeholders
Consult discreetly and early before going public*
Explain why the change is needed in easily understood words
Explain clearly why now is the time to act
No surprises. Never, ever, ever!
*unless this contravenes regulatory standards governing your industry
Personal Experience: The Importance of "Buy-in"
Getting buy-in from key people can directly influence the success of a project.
I remember working on a large Public Sector project a few years ago which included 96 Stakeholder groups (I know).
By consulting the largest 8 stakeholder groups (representing just over 67% of the total people potentially affected), the remaining 33% of the workforce (spread across 80-odd groups) quickly fell into line.
That engagement - or pursuit - strategy saved a huge amount of time and effort and, therefore, project costs.
Ultimately, getting buy-in early can make or break what you’re trying to achieve.
And there’s one key surefire to ensure you engage effectively with your stakeholders:
Create a clear communication plan.
Let’s consider how you can communicate well with your Stakeholders:
Who Are Your Key Stakeholders?
We’ve recently heard Prime Minister Liz Truss say that she should have ‘laid the ground better' when it came to sharing the content of the mini-budget (see main image).
It’s like Benjamin Franklin said:
By failing to prepare, you are automatically preparing to fail”
This is the most important first step.
Without doing this, you’re probably going to hit problems that you might not be able to roll back from.
Invest time at the start to identify your key stakeholders, consider their interests as well as the impact and influence that they could have on your project.
You can do this by using a power/interest grid matrix – this will help you to categorise and prioritise large groups of stakeholders.
Establish Your Objectives
As quoted in Covey’s 7 Habits of Highly Effective People, “Start with the end in mind”.
This is the stage where you’ll need to consider what you’re looking to achieve.
What do you want your stakeholders to say/do/agree as a result of your meeting?
Right Then: How Do I Maximise Our Chances of Success?
1. Land Your Message Effectively
To maximise the probability of successfully landing your message, you need to excite or disturb your audience.
In Judo, if you want to score an outright win (Ippon"), you have to, first of all, force your opponent off-balance.
Men's -60 kg, Luka Mkheidze (blue) of France wins by ippon (Ude-hishigi-juji-gatame)
Paris Grand Slam 2022,
IJF World Judo Tour on February 5, 2022.
What message will excite or disturb your audience?
2. What Methods Will You Use to Communicate?
You’ve got your stakeholders identified.
You know what the goals are and you’ve broken them down into clear objectives.
It’s now time to decide what the most appropriate communication methods will be.
One way to do this might be to consider whether you’re engaging with internal or external stakeholders.
As an example, for external stakeholders, I use the following method:
Priority Stakeholders: Personal visit or direct Video call, possibly even taking a senior executive with you to emphasise the message's importance
Regular Stakeholders: Issue a formal communication, like a press release or a high quality email.
For internal stakeholders, you could set up internal communication channels to facilitate an interactive consultation process, perhaps coupled with scheduled events or even "town halls."
If you're working for a multi-site organisation, you could organise site-specific roadshows and invite people to them. By making the effort to go to them, It underscores the importance of your message and shows you care.
If budgets don’t allow for travel, then well-choreographed zoom events could be almost as effective for a fraction of the cost.
Poorly choreographed Video events, on the other hand, create the illusion of amateurism.
3. Create a Communication Plan
OK, so you know who your stakeholders are, you know what you need to achieve, you’ve broken this down into key objectives and you’ve identified the most appropriate methods for communicating with each type of stakeholder.
Now, it’s time to get your communications all planned out.
When will you communicate with different stakeholders?
How often will you communicate with them? Is a "1 and done" or a "drip" strategy required?
What order will you do it in? For VIP stakeholders, you may wish to collect initial feedback before reaching out to others. (See the main photo above!)
4. Respond to Stakeholder Feedback
Nothing says "we care" like devoting resources and time to collating stakeholder feedback, analysing it and responding accordingly.
This will then help to ensure you’re on the right track, with the necessary buy-in from those important key stakeholders, i.e. those with power and influence.
5. What if you don’t engage with your stakeholders?
You only have to look at the £/$ exchange rate to see what can happen if you fail to communicate:
Disruption and unrest, resulting in serious financial consequences
Mixed messages, leading to confusion
Made people feel anxious
People lose faith in the leadership
By the Chancellor and PM not talking to the Press (i.e. radio silence), people feel even more anxious, they fear the worst, and Leadership appears arrogant or, worse, uncaring.
Communication is absolutely everything.
Communication happens when the other person understands
With the mini-budget, many important stakeholder groups did not understand the logic, rationale and economic thinking behind it all, causing anxiety and chaos in the financial markets.
And when people lose faith in their leaders, it can be very hard to restore confidence.
Putting off difficult conversations almost certainly means having an even more difficult conversation later on when the situation could get much worse
Ok, so your programme may not be worth £45 billion but it's still important to the health of your company.
Stakeholders. Deserve. Managing.
Got an important message to land with your audience, drop me a line for an informal chat on making it a success
PS the cynical side of me also realises that the tax cuts for the wealthy part of the mini-budget represented only £2 billion out of the £45 billion package, meaning that 95.6% made its way through smoothly.
Could that have been the strategy all along? 🤔