This week, Eliga Services’ Senior Business Consultant, Scott Massingham, discusses our business consulting approach to stakeholder management and digital transformation.
When first embracing digital transformation, the journey can seem like a marathon to get from the initial starting point to the end goal.
More than likely, businesses will use search terms like ‘Digital Transformation’ or ask ‘How to undertake strategic change’ in Google. In their research, the common themes of people, process and technology will appear over and over. What is less common, however, is just how important each one of those themes is to a transformation project.
Understanding the people puzzle
This article will focus on the first of those three themes, and arguably the most important, people.
For a digital transformation project, stakeholder management is just one part of the larger people puzzle. While stakeholder management is important, the theme of people involves several different, but connected topics, such as change management, changes in behaviour, expectation management and mindset changes. Although one article cannot cover all these subjects, it’s important to grasp the breadth of the topic.
‘Ultimately, people power (and disempower) transformations. They make processes and technology work.’
As a result, excellent and efficient staff may hide a poor process. Conversely, a good process can easily come unstuck with a poorly performing staff member. The same is true of technology. While technology can hide poor performance to a certain extent, if the technology is expecting A from a person and instead receives B, it’s going to fail.
Different categories of stakeholders
Stakeholder management plays a vital role in digital transformation. Typically, stakeholders fall into one of the following three categories:
- Positively engaged: Those that are embracing new ways of working and actively seeking to help the project team towards success.
- Negatively engaged: Those that are resistant to change for any number of reasons and will actively seek to provide negative engagement.
- Disengaged: Those that are entirely switched off to change, most often as a result of legacy/historical behaviours; whereby, they have witnessed multiple change projects fail within the business.
Mapping your stakeholders
Many projects fail to accurately map their stakeholders. More often than not, a list is kept of who the stakeholders are and their role at the beginning of a project. Businesses often leave this list on a Confluence page or SharePoint area. It will never be looked at again unless a new joiner starts. These newcomers are pointed to the stakeholder list as part of an overview. All stakeholders will have a level of interest in the project (even if this interest is 0) and all will have some form of power within the business. That power can be used positively to help progress change, but it can also be used negatively to derail the project (see matrix below).
Visualising the Power Interest Matrix
- High power, highly interested people (Manage closely): You should fully engage these people and make the greatest efforts to satisfy them.
- High power, less interested people (Keep satisfied): Put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
- Low power, highly interested people (Keep informed): Adequately inform these people and talk to them to ensure that no major issues are arising. People in this category can often be very helpful with the detail of your project.
- Low power, less interested people (Monitor): Again, monitor these people, but don’t bore them with excessive communication.
Points to consider
Stakeholder mapping is a very emotive topic within a project and business. For this reason, it is important that the mapping is not shared with the wider stakeholders. While one stakeholder may view himself or herself as having high power, this person’s actual mapping may suggest otherwise. Consequently, this can lead to tension and frustration among stakeholders.
Low power/low-interest stakeholders may seem like they are less important, but they can be a potential risk to a project. Employees can quickly move out of this zone and will need more thorough communication. Therefore, businesses must review their stakeholder mapping regularly throughout a project.
The human element
It is easy to view stakeholders as names on a piece of paper (or Zoom call). Nonetheless, it is vital not to forget the human element of stakeholder management. There are people who are likely to undergo significant change throughout a digital transformation project. They will have activities and events affecting them in their working and personal lives. As a result, they may feel unwell one day. Alternatively, they may have another form of external pressure affecting their day-to-day mood.
Stakeholder mapping can feel slightly robotic and methodical if you do not combine it with effective communication.
This communication needs to extend beyond a communication plan. Take time to learn about the stakeholders (their interests, family, plans for weekends, etc.) This will ensure that you spend time on non-work related chit-chat, resulting in buy-in from them on a personal level.
Common mistakes
As a Business Consultant, effective stakeholder management is a key skill requirement for undertaking any kind of project. This is particularly true of digital transformation projects. It is why almost all Business Consultant job descriptions will define this as an essential requirement for the post, coupled with excellent communication.
When it comes to stakeholder management, there are five common mistakes I see across businesses, regardless of the industry or sector:
- Failing to review stakeholder mappings throughout a project
- Inadequately communicating to stakeholders
- Not taking into account the human element
- Not interacting with stakeholders from the outset
- Failing to map all stakeholders within a project
These mistakes occur frequently, because, digital transformation projects are the result of a reactive process. Suddenly, businesses realise that they are falling behind their competitors. Alternatively, they may discover that their customers are unhappy. Once this happens, businesses become too engrossed in the delivery. As a result, they neglect non-delivery tasks. These tasks include stakeholder management, project governance, communication plans, etc.
Why do digital transformation projects fail?
I have seen many projects succeed and fail during my career.
Projects fail for multiple reasons, especially ones as large as digital transformation projects. However, there is a common theme. With their failure: 9 times out of 10, a failed project will have had poor stakeholder management from the outset.
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