Who are your stakeholders? What do they really want and why? And how can you manage them better? Jonathan Dutton FCIPS offers some insights for Supply Clusters members:
In the previous article, we asked “What is VALUE for your organisation? How do you define it and measure it? And how is it changing?” But, perhaps a more pertinent question for most busy procurement managers is ‘What do your stakeholders want? Really?’
Who are your stakeholders?
A good starting point is who are your stakeholders exactly? Just the colleague filing in a simple requisition? Or a bit more than that?
Now, what do they want? Do they all want the same thing maybe? Or do they have different priorities? And, to what extent are you working to their agenda?
Stakeholders are not all equal
Yet we also have to measure whom we listen to. Not all stakeholders are equal – some are more equal than others.
One very large American search-engine company simply grades stakeholders as Blue/Bronze/Silver/Gold level. With SLAs to match each level of engagement required.
Others map their spend against their corporate influence, to define the procurement priority and resource allocation: Perhaps using Mendelow’s Matrix:
This approach offers a default procurement perspective or strategy to meet each segment’s true needs.
Alternatively, another approach, which helps more project-orientated stakeholder support strategies, might be to identify who is important to the project at the same time as weighing their role and influence:
Managing stakeholder views
The RASCI model also helps if you are putting together a decision or tender committee to decide on the choice of a new supplier.
A defined DMU (Decision Making Unit) can iron out bias, streamline decision making, share workload, allocate roles in the team and still allow for specialisation. Each person is also allocated an agreed level of influence in the DMU – signified by the RASCI acronym.
Done correctly, as explained in the JD Strategic procurement Masterclass of course, a RASCI approach can help ease out tensions from the start and ensure everyone plays an efficient and welcome role in the corporate decision. It creates a team, with a single set of project or category goals rather than departmental preferences.
What do your stakeholders really want?
What they truly want, may not always be as obvious as you think.
It is a standing objective of procurement to make savings, yet most stakeholders do not place that objective at the top of their list of priorities. In fact, some are almost disinterested in price. It is not their money. So, they don’t care quite so much. They may care about staying within budgets, as they get chastised for overstepping them; but not so much about price. So, do we have a fundamental disconnect between stakeholder needs and the principal procurement objective?
Asking the question ‘What are your core priorities?” is an excellent way to start a very productive conversation with stakeholders. Try ranking their needs by their own estimate of what is most important. Ask them to include the classic procurement objectives too – savings, risk reduction, on time delivery, quality assurance, sustainability and others?
Ultimately, you should be able to discuss, agree and forge a written procurement policy that naturally aligns to your organisation’s needs – and hopefully your true customers’ needs too.
Yet, what stakeholders say they want sometimes differs from the model we are taught in procurement … and the way they ask for it is not always as politically correct management speak as you might imagine; for example:
Meeting all these needs often seems obvious to stakeholders, and almost not worth spelling out. Yet these objectives are not all easy. And can sometimes conflict somewhat – almost be mutually exclusive on occasion.
It is procurement’s role to make sure that there is a professional plan in place to achieve these supply-side goals. And the team’s job to prioritise them.
Ultimately, what everyone in the team wants is VALUE. What makes this so difficult is that we have rarely invested the time in defining at any given point in time to agree exactly what VALUE actually is to us, to our organisation or to our stakeholders.
But that is the most important conversation to have.
January 2020 Procurement - SUPPLY CLUSTERS.COM.AU
Jonathan Dutton FCIPS is the former founding CEO of CIPSA - the procurement peak body in this region. He now works as an independent management consultant specialising in procurement and has a non-executive role at Supply Clusters www.jdconsultancy.com.au