Throughout the years I have been amazed at how companies of all sizes fail to comprehend the simple evolution of stakeholders.
Stakeholder management is often addressed within job descriptions and training sessions explaining the role of the various groups and your interaction with them. Nevertheless, very rarely have I seen a company explain or act upon one very simple idea – that the role of your stakeholders can change.
The idea is very simple. For example, today’s job applicant may be tomorrows client, a future boss or an influencer within the media. Perhaps your supplier actually holds the greatest talent in your industry, or tomorrow they become part of influencing policy change. On the positive side, think of customers or former employees who become advocates for your brand, roaring about their positive experiences to all and sundry.
Although not a new concept and fairly simple to implement, the repercussions of failing to understand this notion can have dire and far reaching consequences for both the business and the individuals involved.
As this is an issue that has grated on me for a number of years, I often wondered if I was alone in thinking that this was a problem that could be detrimental for businesses, or even whether it actually even existed. So I set about interviewing as many people as I could in my free time (well I still have a full-time role that is not linked directly to this) and set about testing my assumptions. During the research process I interviewed a large number of people across sectors and from various sized businesses, and will share three of these interviews with you.
Case 1: A poor interview experience leading to the loss of a £50 million account
My first case happened to a close friend of mine, who was happy to share his experiences during my research for this piece. It was approximately 5 years ago, and David (that’s what we’ll call him for our purposes) had landed a phone interview for what he described as a dream job – marketing strategist at one of the world’s largest technology companies. He spent every moment until the interview learning as much as he didn’t already know about the company, the role, their previous performance and its future vision.
Now, the day was upon him and David waited patiently beside his phone, his notes taped to the walls around him, his rehearsed and polished “hello” ready to go. It was 11am, any minute now his lifelong career aspirations could be about to present himself. 11.10, 11.20, 11.30 all passed – no call. Finally, at 11.53 his mobile began to ring from an unrecognised number. This was it, this was the chance he had worked and studied towards for all these years. “Hi, this is Mark, I’m calling from XYZ” (well, it wouldn’t really be fair to name the company). No apology for the lateness was David’s first thought. Ok that’s fine, perhaps he overran with previous calls or maybe at a company of this magnitude he was just busy. That’s fine, let’s move on. It was the next words and tone with which they were delivered that shocked and threw David.
“People just book these things without asking me…”
As the interview continued it was clear that David’s CV had not been read by the interviewer, who also had no idea what role David had applied for. Once explained what position he saw himself excelling in at XYZ, he was quickly ridiculed. “What do you know about….? When have you ever done….?” David explains to me that at this point of the interview he was shocked at the aggressive tone, and had to stop the interviewer to explain he wasn’t fresh out of college. That in fact although he recently re-attended college to complete his PHD, he was in fact a professional with over 15-years experience, had attended one of Europe’s best business schools, an author with 3 books on the subject and had given talks on the subject matter all over the globe.
The interview left a lasting impression on David. “I put in all the work, not only in researching the company and role but also my years in the field, in the classroom, the sacrifices my family had made for me to be able to be where I am today… and they couldn’t be bothered to read my CV or even look at the top line of my application stating what role I had applied for.”
Five years from this nightmare impression, David found himself promoted to lead a global function within a large corporate bank.
“All of a sudden I had to make decisions regarding our partners and vendors. A few contracts were coming up for renewal and as I peered down the list I saw XYZ. I didn’t see this as an opportunity for revenge, but at the same time I didn’t want to just give them an easy ride. So I decided to put the work out to tender.”
I have my doubts that revenge wasn’t on David’s mind, and when pushed David admits that -just like the rest of us – he can hold a grudge and ill-feelings, but” if they were to be the best option for the business, they would win the contract, of that I’m sure”. They didn’t.
“We had a number of very competitive pitches. Two of which stood far beyond XYZ, whilst also being considerably more competitive”.
I had to push him one more time to understand if XYZ went in with a fair chance, and I’ll leave the final words of this case for David to explain:
…to win this contract the pitch would have had to have been great. It was just good.
“Ok fine, I’ll be honest, for XYZ to win this contract the pitch would have had to have been great. It was just good. If I hadn’t had my own personal experience with them, perhaps I wouldn’t have pushed quite so hard to open the contract up as it would have been simple to continue with ‘business-as-usual’ and push my efforts into other tasks. Perhaps I would have passed the pitch process to a member of my team…. but I made sure I was in that room.”
Case 2: The Distribution Partner that Became a Powerful Supplier
“We had no power, as a company they [referred to as ABC] held all the cards. There were countless people that could do what we could do for them and they were our biggest account. If they left I would have had to lay off at least half my team, and they knew it. They treated us really badly, demanding everything done their way, at their time and at their price. But then out of the blue FGH [I’m not using real names here people] was looking to acquire part of our business. For me it was a way to preserve the jobs of the people who worked so hard for me all these years and securing the future of the company. The rest of what happened I hadn’t even realised was a possibility.”
Robert started his truck and trailer supplies company over twenty years ago, and ten years ago won a contract becoming the main stockists in the region for a much heralded brand in the industry. The future looked promising and Robert’s vision for the company had now become a reality. But things started to change quickly.
…threatening to use our competitors instead once our exclusivity deals expired. That would have ruined us…
“Looking back at it, it was probably a mistake to open new stores as quickly as we did. Our sales were fantastic and we were selling a lot of ABC’s products, but also the same customers were buying other goods as well, but they were coming into the stores [retail, online and trade] as no one else were able to stock ABC goods. I thought we were in a good position but then ABC started making some demands, and over time these demands grew bigger and bigger, with them threatening to use our competitors instead once our exclusivity deals expired. That would have ruined us and it did give me sleepless nights.”
Luckily for Robert, a white knight appeared out of the blue. FGH were manufacturers within the truck and trailer industry, the largest in Europe, and although they hadn’t previously been interested in retail stores or direct to consumer sales, they approached the UK market with a new business model. What made Robert’s business so attractive was the fleet of drivers, retail stores and trade accounts the company had built up over the years.
“I’m a very honest person and I don’t like being dishonest in business, so I told them about my issues with ABC, and they told me it was ‘not a problem’. All of a sudden our relationship with ABC completely flipped and they were bending over backwards to assist in any way they could, removed all their demands on us, it was shocking.”
What Robert hadn’t realised was that his new partners not only manufactured most of ABC’s goods, they did it at a price that none of the other players in the market could achieve. The power of the supplier in this case was huge, and switching for ABC would greatly eat into their profit margin. Their unreasonable demands ended and more importantly for Robert, they started to treat himself and his staff as human beings.
Case 3: Treating Your Team Poorly Scuppers a Future Opportunity
An example from an individual consequence (rather than business) comes from a young lady I met randomly in a coffee shop, as I was in the process of dropping my notes all over the place. After a few questions about what I was writing about, Diana quickly unloaded an experience that has clearly been eating away at her for over three years. She had a departmental manager for the duration of her three-month spell at a small boutique design agency that seemed to take every opportunity to demean his entire team, especially Diana.
At 19 years of age, and inexperienced in the ways of an agency, Diana wasn’t sure if this was just the way the industry was, or even the way all businesses behaved. She started to doubt her current choice of course and future career aspirations, after all did she really want to have a job that made her go home and cry almost every night.
She went back to university demoralised but was quickly reassured by her peers that their experiences were very different. She completed her course and soon entered the agency life as an HR assistant at a very reputable firm, and within 6 months she had a very surreal experience.
…I couldn’t believe who it was. I just stood there, frozen at first, like fate had punched me in the face.
“It was only the second time my boss had asked me to come into an interview, and I was just meant to take notes. She passed me the CV of the candidate we were about to meet and I couldn’t believe who it was. I just stood there, frozen at first, like fate had punched me in the face. But then I realised he had no power over me anymore and I could read through all the bs on his CV. He had said how he mentored every employee that he had ever had and how he ruled by collaborating with his team and that is why he was so respected. I immediately asked [her boss] if I could ask some questions. What amazed me even more is whilst I was asking him questions for 10 minutes, he didn’t remember me! After the interview I explained to my boss who he was, how he managed and how a lot of stuff on his CV wasn’t true, including taking credit for the work of other people”.
I asked if perhaps he could have changed during her experiences there.
“No, no, definitely not! I’m still friends with people there and they tell me it just gets worse. I made sure he remembered me at the end of the interview, telling him that I used to work for him as an intern. His smile disappeared and he looked like he had seen a ghost, that was when I felt like I had conquered the world.”
Although many examples I uncovered were on the negative side, there were also a number of positive stories. One example being a struggling start up that strongly believed in amazing customer service to all, leading to an ‘accidental’ conversion of a customer to an advocate. The customer turned out to be a sporting celebrity with a huge social media following, leading to orders within the next 3 months that helped it achieve its two-year financial forecast within a quarter.
This may seem to be a coincidence, a twist of fate or petty revenge to some readers out there, taken by a disgruntled individual against an entity that has wronged them. But that would be a short-sighted view. Businesses are a sum of their parts, of their resources and ultimately, of their people. With that we must understand is that human behaviour and our formulated biases will more often than not influence our decisions.
1.On the business/firm level:
This is about incorporating/increasing the level of emotional intelligence (EQ) beyond the espoused values of the business and into its shared and embedded assumptions and governance. This is about managing your risk. The principles of empathy, of motivations, must be integrated into the shared behaviours of all that represent and interact within and beyond the boundaries of the firm, impacting its long-term culture.
For example, in the day-and-age of automation (especially with the growth of Robotic Process Automation), there is no excuse for a large organisation to not respond to unsuccessful job applicants. There is no reason to lord the power you have over your suppliers or your local communities with unreasonable demands, but rather focus on collaborative approaches that can benefit all parties moving forward.
In any stakeholder engagement process it is important to listen to the varied views from the individuals and groups that constitute your stakeholders. Now we have to train ourselves to understand that a change can occur, prompting motivations, influence and perceptions to alter.
2. On the individual level:
Empathy is the straight forward answer. However, the full spectrum of EQ is important on the individual level as well, with your self awareness, social skills, self management and understanding of motivations all playing a key role in understanding and benefitting from the shifting roles of stakeholders.
Understand what each of your stakeholders want or need from you. Remember what it was like to be a junior member of staff, what were the behaviours of previous bosses that you admired and which made you want to call in sick? Don’t repeat the mistakes of others, if you know how they make people feel. Appreciate the differing motivations of your different stakeholders. In your project team, what is the product owner trying to achieve? How about the developers, the client services executive, or the intern? Not everyone will come to the table with the same incentives as you, so keep in mind what is driving those around you and how you can drive positive change, as an individual within your organisation.
Using hindsight, there are some obvious fixes regarding the discrete cases encountered during my research. However, if we look to fix these issues as they arise, we would be taking a reactive approach. By the time you trained your team to ensure ‘it won’t happen again’, it may already be too late. Or worse still, the effects may not be seen for years later, failing to highlight issues within your organisation, and potentially hitting your bottom line in one form or another.
It’s important to consider the role of your stakeholders in the present, but also be aware of the possibility that these defined roles shifting in the future is also a very real possibility.
So keep in mind that people change, and so do relationships.