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Stakeholder Engagement is ‘free’!
The Zero Cost of Stakeholder Relationship Management

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Keywords: Stakeholder, Relationships, Communication, Soft Skills. 

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Stakeholder Engagement is ‘free’! The Zero Cost of Stakeholder Relationship Management   [P142]

Knowing who your stakeholders are is essential for success: and for a PMO it is crucial. Many organisations are reluctant to invest in effective stakeholder engagement, the consequence is loss of reputation and million-dollar compensation claims. The PMO can add value as the facilitator of more effective investment in stakeholder relationship management.

Every organisation must communicate in order to survive and succeed. Its processes, development, marketing, production all involve communication. Every organisation has customers – how the customers respond to the organisation and how the employees work within the organisation to produce the goods and services is also about communication. Many organisations do not recognise the importance of communication to their success and therefore do not value communication and the associated stakeholder relationship management, and so do not provide sufficient encouragement to employees to spend enough time on these vital functions. This paper attempts to raise the profile of communication and stakeholders within organisations by showing the connection between the organisation’s success and a culture of stakeholder relationship management, using the measures of the ‘zero cost of quality’ inherent in the quality movement.

The concept discussed in this paper is based on the philosophy of the Quality movement that quality is free – investment in stakeholders is balanced by reduction in ‘failure dollars’ of fixing the issues caused by poor stakeholder relationship management. A case study of the strategies and events before, after and during the Gulf of Mexico oil spill analyses the issues of that disaster to establish a framework for adding value to an organisation through more effective and sustainable stakeholder relationship management.

The PMO is ideally placed to champion and facilitate this approach and provide not only support services to achieve this, but also assist in measuring ‘failure dollars’ through its reporting mechanisms. The PMO should lead by example in using structured effective stakeholder engagement practices to manage its own stakeholder community and also to assist the other parts of the organisation to move towards ‘stakeholder engagement is free’.

Author: Lynda Bourne

Presented at:
AIPM 2012
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Incorporating: The Zero Cost of Stakeholder Management
Presented at: The Academy of Management 2011 Annual Meeting
                     San Antonio, Texas, USA.  August 2011
 
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