Written by: Eman Abouzeid – Global Procurement and Supply Chain Professional
The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply.
A stakeholder is an individual or groups of people who have an interest in an organization; these may be colleagues in other parts of the organization, as well as people and groups outside the organization.
Stakeholder groups can be profiled into three different categories:
Internal stakeholders group – such as directors and senior managers, the technical/design function, manufacture/production/operations function, sales and marketing function, finance/admin function, storage and distribution/logistics function.
Connected stakeholders group – such as shareholders, end customers, intermediary customers (e.g. agents/distributors/retail outlets), suppliers, financial institutions/lenders.
External stakeholders group – such as government and regulatory bodies, pressure groups (e.g. Greenpeace), interest groups (e.g. consumer associations and trade unions), community and society at large.
Why is stakeholder profiling important?
It is worth taking the time to profile your stakeholder groups for these reasons:
Decision Making: profiling provides an insight into how much influence stakeholders have over decisions. Moreover, it helps you to allow time for responses while working with stakeholders who tend to be slow to act.
Communication: profiling helps you to identify the best way to share the features and benefits of your products and services. In addition, it enables you to include stakeholders’ needs in a communication strategy.
Understanding: profiling enables you to be aware of what stakeholders’ needs, wishes and priorities are, also it makes it easier to keep track of changing needs and requirements, and it helps you to see the market from stakeholders’ points of view. Likewise, a clear understanding of your stakeholders can help you to deliver more acceptable solutions that more closely fit their needs.
Approaches followed to build rapport with internal and external stakeholders:
Effective communication with stakeholders in any project or business relationship is important as there needs to be an exchange of information between the parties. People will be engaged at various stages in the process and any communication blockages may result in incorrect assumptions and decisions.
Considerably, it is important for the organization and stakeholders to get to know each other and understand each others’ motivations. This helps to build a relationship where each party is happy to deal with the other, and then, eventually, learn to trust one another. Trust is established when each side has shown themselves to be reliable, consistent, and able to keep promises.
Building rapport with internal stakeholders
In a business, everyone needs to feel part of the same team and that they are all working towards achieving a common goal. If management do not communicate their expectations to everyone then staff or whole department may go in different directions and lose track of the organization’s overall goals.
Internal stakeholders feel more engaged with the business if they are kept informed of where the business is heading and what its significant aims and achievements are.
Building rapport with external stakeholders
Building rapport with external stakeholders takes a little more effort as they are not involved directly with what is going on in the business.
It is vitally important to keep external stakeholders updated with the business’ products and services, goals and achievements. They do not need to know the details of how the business runs, but they do need to understand the aims of the business.
Key techniques and strategies to develop, maintain, and improve relationships with your internal and external stakeholders to promote an effective procurement and supply function:
Having established a connection with stakeholders, to ensure future success you must build a trusting and lasting relationship with them. Whoever they are, whether senior to you or outside your organization, you can use similar key techniques to help you strength these relationships:
Be honest and open: being honest and open with stakeholders makes them more likely to be the same with you. If you need help, ask for it. Stakeholders will appreciate your honesty and value the opportunity to assist before a situation escalates.
Be proactive: dealing with risks and issues straight away helps you to spot challenges before they become a problem. You cannot control what crops up but you can control how to respond.
Be positive: no matter the challenges in your relationship with stakeholders, remaining confident that you will find a solution helps solutions to be found.
Listen to others: make an effort to engage with your stakeholders and listen to what they have to say. Understand others’ points of view before you try to get them to understand yours.
Have empathy: gain a clear understanding of the stakeholders’ needs and wants. How would you react if you were in their positions? – look for a solution that will benefit all parties (win-win).
Set a good example: build trust and respect and aim to be professional. It takes a lot to build a reputation, but it can be lost very quickly.
Maintaining relationships with stakeholders
The better your relationships with your stakeholders are, the more likely it is that your will be able to overcome challenges as they arise.
Involve them: Do not lose sight of your stakeholders over time. You built good relationships at the outset and it is easy, under the pressure of work, to forget to maintain those relationships. Maintain regular contact and keep the communication channel open so the stakeholders can also contact you.
Be honest and accountable: Maintain truth and honesty throughout the relationship. You are accountable for what you are responsible for. If you say you are going to do something, then do it. If the stakeholder feels you are not keeping your word they will begin to lose respect for you and feel that you do not respect them.
Keep an open mind: Challenges will happen so you need to consider all options when trying to resolve an issue. Be open to the other person’s input – it may be the solution you seek.
Address issues as they arise: Often issues are sidelined in the hope that they may resolve themselves miraculously, but they usually do not! Deal with them straight away, discuss them, agree on a course of action, learn any lessons and move on. The relationship will be stronger as a result.
Improving relationships with stakeholders:
Occasionally, you will encounter stakeholders with whom you find it difficult to develop a healthy relationship. There may also be moments when a relationship that started on a high note fizzles out. In these situations, it is important to maintain a professional attitude toward the relationship, and attempt to use the strategies above to strengthen it.
Additionally, you can make a renewed effort to get to know and understand the person. Try to uncover what resistance there is, and why they are behaving as they are. There may well be a simple issue that can be easily resolved.
Within an organization, and between the organization and its suppliers and customers, there needs to be effective and transparent engagement and communication. Put simply, building rapport and developing relationships with all groups of stakeholders are considered the core of building valuable long-term business partnerships.
Eman Abouzeid is a former procurement and sourcing professional at the British Council with extensive experience in global procurement and supply chain operations.