Archive for October, 2011

Who are your stakeholders? (And why would you care anyway?)

Don’t you find that some words, through endless public repetition, become grating and almost meaningless?  Take for example “offshore processing”.  Haven’t we all had a gut-full of hearing that term?

I got a bit like that with “stakeholder”, hearing it bandied around in all sorts of circles, whether intelligently or not.  But the concept of stakeholder is an important one in governance, and particularly so in the not-for-profit world where I often work.  So I sought the advice of my language expert and PR guru Belinda to find an alternative term.

However, even her in-depth research couldn’t turn up another viable word, so you will just  have to bear with me while I flog a possibly dead linguistic horse. Because if you want to govern your organisation effectively, you really should know who your stakeholders are, what their stake is, and who in the organisation is managing it.

So what is a “stakeholder” anyway?  The most useful definition I have found goes along these lines:

“a person, group or organisation that has a direct or indirect stake in you rorganisation because they can:

  • affect, or
  • be affected by

your organisation’s action policies and objectives”

The concept of stakeholder is important in the not-for-profit world because there is not usually a simple answer to the question “Who are we governing for?” (or as Belinda would have it, more correctly, “For whom are we governing?”)  In the commercial world the answer invariably given is “the shareholders”, since the primary objective is maximising shareholder wealth.

This, of course, is an over-simplification, because even commercial organisations have other parties to whom the firm’s success is vital.  But for NFPs, the lack of such an easy starting point can cause much confusion, unless some thought is given to which are the parties who have the primary interests in the outcomes of an NFP’s operations.

It is a relatively simple process to map who are the stakeholders in your organisation, if you reflect on the definition above.  Sit down with your senior management team, or your board, or preferably both, and brainstorm who might affect or be affected by what the organisation does or aspires to do.

Here are a few hints:

  • in a club or other member driven organisation, obviously the members
  • in a charity, the people (and their families) who access the  benefits or services which the charity delivers; and also the funders on whose continuing involvement your future depends
  • in the case of all organisations, the staff whose livelihoods depend on the organisation’s ongoing viability
  • the suppliers and creditors whose own viability is affected by your organisation’s ability to pay its debts as they fall due

Depending on the nature of your organisation’s operations, there will be a range of other potential stakeholders.  Where the organisation has some tax-free or tax-preferred status, the ATO is one of your important stakeholders.  Other players in your sector may also have stakes in what you do – in the medical research field, for instance, the associated scientific community.  The local communities in which your operations are conducted might also have an interest in your organisation.

My experience in helping organisations develop stakeholder maps is that, when you turn your mind to it, there will always be some people, group or body whom you have not previously recognised as having a stake in what you do, but who are worthy of inclusion on the map.

The mapping process is not, however, the end of your considerations.  Since, by definition, the parties identified can affect or be affected by what you do, you should also address how the various stakeholders are being managed. Your next steps, for each stakeholder, are:

  • what is the precise nature of the stake
  • who is managing the stakeholder
  • what is the current status of that management process
  • what if any activity ought to be undertaken to ensure that the stakeholder is being managed appropriately

Taking those steps should give you a stakeholder management action plan, an impressive development in anyone’s language.  You should also end up with more clarity around that fundamental question about whom you are governing for.

So I will stop stressing about the term “stakeholder”.  But the likes of “mandatory detention” and “pre-commitment technology” will continue to glaze me over and switch me off.

Three tactics for a great board presentation

You can be facing a tough audience when you are presenting to a board of directors.  Since the board sits at the top of the hierarchy, the directors get to make their own rules and run their own timetable.  So if you are presenting to the board, you have to fit in with their rules and their agenda.

Here are 3 suggestions to help you get the best possible response from the board:

1.   Check the board paper and the presentation slides carefully

Directors generally hate typos and numbers that don’t add up.  If they find one, it will at best chip away at your credibility, and at worst derail the whole presentation.   Look at Quade Cooper’s kick-off in the World Cup semi-final – out on the full and setting an adverse tone for the whole match.  One little typo can do that to your presentation. So, before your board paper is circulated to directors:

  • Do a final proof read, and add up any numbers again (and don’t just rely on spell-check, or you might let “manger” slip through instead of “manager”)
  • Get someone else to do a cold-eye review of the paper, just to be sure, to be sure
  • Do the same for the slides which you will be using in the meeting.

2.   Have at least two versions of the actual presentation you will make to the board

Board meetings invariably don’t run to time, and things get squeezed.  The further down the agenda you are, the more likely it is that the time originally allotted for your presentation will be compressed.  Even if you are ushered into the boardroom  on time, the board will often ask you to shorten the presentation to help them stay on track with other agenda items. To avoid stressing yourself:

  • Be prepared, and have a second version of the presentation up your sleeve which is half the length of the scheduled one.  That way, if you are squeezed you will still be able to get your desired message across without having to rush, or make decisions on the run about what you will leave out.  If you end up with more than half your time, it is easier to add things back in than decide what to chop.
  • If you find yourself outside the board room with your allotted time ticking away, don’t sit there fretting.  Stay calm and, each 5 minutes or so,  mentally work out which of your slides you will skip, so you can have a presentation which will fit comfortably into the remaining time.

3.   Never assume they will remember

Boards generally meet no more than once a month, or even less frequently.  Each director has at least one other job, and often sits on one or more other boards.  They probably don’t keep previous board papers (and arguably they shouldn’t).  It is no surprise that they may not be able to keep mental track of  all the relevant issues for your organisation.

You should expect that they will not remember what was discussed last time that the issue on which you are presenting came before them, or what decision was made. You can avoid false starts this way:

  • Always start with a re-cap of what has previously happened in relation to the issue, and what the current state of play is.  Everyone will then be at the same point from the outset.
  • Don’t be concerned if it sounds to yourself that you are stating the bleeding obvious. I can pretty much guarantee that at least one director will remember nothing, or remember it differently and incorrectly.

If you have done these 3 things, have a good grasp of your material, and have plenty of illustrative examples for your important points in your pocket, you will be able to present confidently, and greatly increase your chances of getting your desired outcome.  And you won’t kick out on the full.

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