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Stakeholders Matter

Stakeholders Matter

CIOs need to identify their many different stakeholders and actively manage them.

Managing the growing number and diversity of IS stakeholders is a demanding leadership challenge for CIOs. IS stakeholders now include business units, business partners, users, consumers, IS staff and external agencies, such as regulators - and more. Their interests range from long-term priorities to day-to-day operations.

In some cases, these groups hold seemingly irreconcilable differences. In the words of my colleague, Andrew Rowsell-Jones, who recently completed our research in this area: "The endgame is to turn as many of your stakeholders as possible into influential supporters because without proper management, they may not only block your initiatives, they may become truly disruptive. This disruption is both painful and prevalent - both for the enterprise and for CIOs personally."

The difficult task is determining which stakeholders need close attention and what approaches work best. This might all seem a bit Machiavellian, but the ability to effectively manage stakeholders should now be part of the "competency toolkit" of every executive, and in particular, CIOs. Distinguish stakeholders by their pull and stance. There are many types of stakeholder - some more demanding than others. The more demanding they are, the more potential they have to be troublesome if incorrectly managed. But demand is not necessarily the best determinant of priority, even though demanding stakeholders would like you to think so. It's better to understand their pull and their general stance to IT issues. Stakeholder pull essentially means the influence of a person or group on a decision. Pull has three attributes: power, urgency and legitimacy. Most managers tend to focus only on the power. Power gives lots of pull, but urgency and legitimacy also matter because they can increase a stakeholder's influence.

For example, stakeholders with only a "legitimate" claim have the least pull. Individual environmental enthusiasts might be considered in this group. Add urgency, whether real or apparent, to their claim and their pull increases. Add a powerful spokesperson or alliance and their influence increases still further. Individuals with a legitimate cause can gain power swiftly via networking.

Stakeholders with the highest pull have all three attributes. So don't write off those that apparently lack power. If they have urgency and legitimacy they can get power.

Stakeholder stance is the amount of support or opposition a stakeholder has toward an issue. The task of discovering the stance of a person or group might seem daunting at first. But talking directly to the stakeholders or to people who have previously dealt with them can ferret out their current position and underlying reasoning.

Pull and stance maps stakeholders into four groups. Mapping stakeholders by pull and stance segments stakeholders into influential opponents (the most dangerous), influential supporters (your power base), weak supporters and weak opponents. Based on these categories, you can devise your management strategies to address each one appropriately.

Priority 1: Recruit your persuadable opponents to the cause. Focus first on influential opponents because they are most likely to prevent you from achieving your objectives. Exploit existing relationships. Use your "bank of political capital", as one CIO put it, plus any other bargaining chips you have, in return for their support. Sometimes, just engaging with opponents and hearing their arguments is sufficient to reduce their opposition. They may become more sympathetic to your position. Better yet, they could become supporters, especially if there is something in it for them. Small changes can yield large rewards.

Priority 2: Restrict your influential opponents. If this doesn't work, aim to restrict their influence. Use the decision-making process to dilute their pull. Work with senior management to define an alternative direction. Use the IT council and other aspects of governance processes to diminish their influence. This requires preliminary meetings with supporters so they understand the need for their strong participation.

Priority 3: Retain your influential supporters. Once you have determined how to address your influential opponents, deal with your influential supporters. Your goal is to maintain their stance and protect their pull. Generally, the most effective tactic is to deal with individual stakeholders or groups directly, rather than using the decision-making environment to keep tabs on their position. Informal networking, seeking their suggestions and including their concerns, all aim to strengthen these crucial allies.

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