Challenges of getting stakeholder buy-in and ways to get over them
Stakeholder buy-in is the glue that binds all elements of a project together and ensures that the change will actually happen. The absence of stakeholder buy-in can easily turn a multi-million dollar investment into a very expensive lesson about just how resistant to change we all can be.
“A stakeholder is any person or group that affects, or is affected by a particular project. Along the path to completing your project, stakeholders can be partners, resources or roadblocks -- and potentially all three rolled into one. Stakeholder buy-in, the cooperation or positive participation of a stakeholder, is the preferred condition for any successful project.”
There are two broad types of stakeholders in any organization. Internal stakeholders are those people who operate directly within the business, including owners, managers, employees and board members or trustees. Internal stakeholders typically generate the ideas for a business and are likely to have buy-in almost immediately because they realize the impact of decisions on the business' bottom line. External stakeholders are outside the business but still interact with it in some way. They include customers, community members and vendors that provide goods or services to the business. Stakeholder buy-in is particularly important from this perspective because if a business can get these folks on board, it can have an easier time implementing new plans and strategies.
The above analysis indicates that the HR departmental agendas that are required to impact internal stakeholders (i.e. integrated HR solutions) are fundamentally different from the agendas that are required to impact external stakeholders (i.e. information management). Among the other paradoxes that effective HR departments must balance is whether to focus on internal customers or whether to focus on external customers. This conclusion suggests three potentially important issues for consideration.
First, who is your department’s focal customer? Is your HR department in the business of making internal stakeholders happy, or is it in the business of making external customers and owners happy? It is clear that a HR department can focus on optimising its popularity with internal stakeholders without having direct impact on external stakeholders. On the other hand, there is a potential danger in a unilateral focus on external stakeholders which might result in alienating internal stakeholders and limiting the department’s internal credibility.
Second, how fixed is your department in its comfort zone? HR’s role in information management is what HR departments do worst but is a key external value creator. This agenda provides substantial opportunity but also may require substantial retooling of the HR department capability set.
Third, what is your department’s professional identity? Organisations do not exist to make management and employees happy. Rather, they exist to make customers and shareholders happy. Does your HR department exist with a direct line of sight to the mission and purpose of its organisation? Or does its line of sight end with its internal stakeholders?
The most common obstacles and assumptions about the HR domain that stand in the way of achieving this stakeholder management balance can be:
Knowledge: It is assumed that HR professionals have greater knowledge of HR processes and internal business issues than they do of external realities (i.e. customers, competitors, capital markets, industry trends), but knowledge of external realities differentiate high-performing HR departments to a much greater degree than knowledge of internal factors.
Unit of analysis: Many HR professionals have academic backgrounds in psychology. By definition, psychology focuses on the optimisation of individual talent. This focus may tend to remove the HR professional focus away from the external macro environment, which ultimately determines institutional success or failure.
Expectations: For many years, HR departments have created an internally based self-fulfilling prophecy. Their focus on internal operations has established HR’s internal focus in the minds of senior leaders, who in turn expect HR departments to maintain the internal focus which the HR departments themselves have created.
Skill set: Finally and, perhaps, most important is that the skill set that is required to impact internal customers, including line managers and employees, is substantially different from the skill set that is required to impact external customers and investors.
One of the ways to tackle the stakeholder management issues is the engagement technique deployed by the HR to present the business case to every stakeholder. The idea behind engagement is open communication between all levels of stakeholders within and outside an organization. Engagement is also about getting feedback on proposed plans and listening to suggestions for improvement from stakeholders. Engagement recognizes that the best business ideas may come from outside the organization. These communications between the business and its stakeholders are engaging ways to opt for buy-in from those directly affected by the organization's strategies and plans.
To secure buy-in from stakeholders, you’ll have to answer the “what’s in it for me?” question for all those who have an influence over the HR project. These questions could vary from organizational agility and the capacity to rapidly acquire and integrate new businesses to cost reductions and productivity improvements. Key questions to ask of these stakeholders include:
What is their current perspective of HR, including strengths and opportunities?
In a perfect world, what role would HR play in the organization and in addressing objectives in their business area?
What other projects require funding, and how might an HR transformation be complementary to those initiatives?
What might get in the way of approving an HR transformation project?
When any new change programme is proposed, a degree of resistance from the employee workforce is to be expected. These employees may be reluctant to move away from their established ways of working, rejecting new policies or processes in favour of maintaining the ‘tried and tested’. It could, therefore, be argued that to truly gain buy-in across the board, implementation of your idea must come first. To tackle this issue, you’ll need sponsors onside to kick things off initially. You can have internal promotions and workshops to explain the new HR policies. You can give them a fairly quantified demo on high the transformation will look like as well. It can aid your cause to engage employees in your project from the off. Potential resistance can be warded off, if staff are made to feel fully vested in the programme, rather than feeling change is being forced upon them.
Stakeholder buy-in can be beneficial for organizations of all sizes, but particularly for small businesses eager for new ideas. It provides opportunities to engage with new opinions and ideas that may not be readily apparent in the organization's structure. It can help align the business' strategies with the wants and needs of its customers. This helps drive long-term growth and profitability.
