The Significance Of Stakeholder Management

The Significance Of Stakeholder Management

Anyone involved in leader development and coaching including leaders themselves will recognize that stakeholder management is seen as a very critical leadership competence today.

There is often a mistaken perception that stakeholder management is to do with communication, presentations, networking and building relationships.

In reality, stakeholder management is far deeper and calls for some good thinking about it.

To do that I must take you back to where this may have started – Job design.

Jobs in this century and beyond are being designed in ways that we have never seen before. So the origins of stakeholder management trace back to the way modern jobs are designed for leaders and managers.

One scholar’s work in this area I would like to refer to is Robert Simons and his landmark article in the Harvard Business Review in July, August 2000. He talks about the fact that in every manager and leader’s job, there are four dimensions of job design: span of control, span of accountability, span of influence and span of support.

Now, the common belief is that if I’m accountable for something, I must have control over all the resources to get the work done, but that is not likely to ever happen going forward. Span of accountability will be larger than the span of control.

And the nature of accountability is broader rather than narrower, or restricted to clear KPIs and KRAs. Managers and leaders are held accountable for much more complex and abstract things like customer engagement, employee engagement, culture, capability building, transformation, environment, diversity and so on.

To achieve this, it becomes necessary that for one to have the ability to influence a whole host of people within and outside the system who do not necessarily need to listen to me.

Similarly, if I have to get a lot of things done and my span of control is limited, I must access resources and support to get work done. How I sell my ideas, how I win their support, how do I build focus towards the larger purpose so that their propensity to support me is higher becomes critical.

Therefore, modern jobs are designed in a way that the span of influence and the span of support needs to be more so that that with limited span of control and a broad span of accountability, I am able to deliver in a high performance job.

Therefore, the critical competence to make that happen is not authority or only functional brilliance but my ability to manage all my stakeholders – my employees, employees of other functions, other functional leaders, members in other parts of the ecosystem, members of the board.

Therefore, when we look at stakeholder management from the perspective of a key requirement keeping in mind the modern way in which jobs are designed, then it assumes very strategic significance.