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Business is a game of chess By Nilooka
Dissanayake Now what does
this have to do with business? Ah, what the little kid does in all
her innocence is actually a very effective management tool, especially
for managing the many forces in your business environment that we
discussed last week. The potent tool is most boringly described
as Stakeholder Management. And, when I
first came across it, I was placed in a most advantageous position
to see it at work. I had taken on the double challenge of a management
consultancy project for my MBA project. On one hand, I had to help
a public sector art gallery in Scotland deal with declining state
support and adapting itself to face competitive forces and revenue
generation. On the other hand, I had to use conventional management
tools generally used in the private sector to evaluate their applicability
to the public sector for the thesis. At the time
Tony Blair was on his way into power with New Politics and an aversion
to subsidies. The competitive forces were real. Galleries in UK
are mostly sort after by the oldies and students who have not much
by way of disposable incomes. And these services have been always
given free. The galleries had to earn money to survive. And they
could not charge the majority of their visitors. The gallery curators
had to manage with meagre funds and grow their business or perish. Besides the
money issue, there was the need for a paradigm shift. That is, a
need to change the way of thinking, looking at and dealing with
the world. The curator and her staff had to "get real"
and jump in the deep sea with hardly any training. Staff members
were nervous and resentful. My task was
interesting. My MBA electives of Organisational Change and Development
and Strategic Management helped me sleep at night - when I had the
time for sleep that is. I am an art lover and a fanatic for galleries.
And my client was so genuinely trying her best to bring about a
change. Among the management tools I tested on this assignment was Stakeholder Management. Actually, it is nothing more than analyzing the people who have a "stake" in your business and playing them against each other to achieve your organizational objectives. This of course is my usual irreverent interpretation. Firstly, my
client identified her stakeholders: the visitors, herself and her
staff, the officials in the public sector, the regional politicians,
trustees of the gallery, the Scottish Museums Council, shop owners
in the area and so on. Secondly, she
carefully analysed the motivations of each of the separate shareholders
in getting involved with the organization. What did they want? What
are they willing to do? Thirdly, she
evaluated the extent of their power and the impact of that power
individually and collectively. There were many forces at play. The officials wanted increased admittance fees. They did not understand that visitors could not afford to pay. Their staying away because of high charges will defeat the object for which the gallery was created. The trustees were paranoid at this idea. Staff members wanted facilities and increments. My client wanted to buy more paintings for the collection and provide better quality services. They also wanted an expansion which will enable them to rent out the gallery for functions and opening up a whole new revenue stream. Politicians wanted news and to score points against each other. The Museum Council was stressing upon professional management and serving visitors and not just cash and profits. We wanted to
serve and increase the number of visitors, manage at least to break
even and provide quality facilities. We did not want to increase
prices. We had already defined our strategic goals and this exercise
was to help us determine how to go ahead and achieve our objectives
without getting caught in the whirlwinds and undercurrents. So, we categorized
stakeholders who were having high and low impacts as well as those
who are with and against the achieving of objectives. The stakes
were very high for most of those who were involved. We argued that
the visitors did not have a big say by themselves; nor did the neighbours.
The curator and staff were also in agreement against raising prices.
So were the trustees. But, trustees had influence that all others
lacked. While tapping something like the "old boy networks"
my client felt that influential neighbours and some of the key politicos
can be brought to our side. Which politician would protest against
what is good for the masses? So we were really marshalling forces
to prevent a blanket price increase and still achieve sufficient
revenue. The result
of the stakeholder analyses was to determine the courses of action
we would take - including lobbying and persuasion, marshalling forces
into petitioning, etc. - to go ahead with the developed strategies.
And the situation was eternally changing. Our stakeholders were
not always acting in the ways we thought they would. New developments
kept cropping up all the way to the trustee meetings and until the
policy decision was made to allow us more operational freedom to
take entrepreneurial risks rather than raising prices. I had been
a consultant long before this experience. But, this assignment opened
my eyes to the more human, psychological and exiting forces at play
in the business environment. It was an experiment approved by the
Museums Council where I was without any risk of personal loss. Of
course, my reputation as a consultant and my conscience were at
risk and so was the future of the dear little art gallery. Things worked
out eventually, but I was back in Sri Lanka by then and was not
there to share the triumphs. My client still keeps in touch. This is the
story of my first experience in stakeholder management. Today, as
a businessperson I do it all the time. So do all of you although
we do not call it by this name. If you have not thought about this
versatile tool, do think it over. I leave you to use your imagination
to see how individuals and politicians etc. use this same concept
everyday to further their objectives. We welcome your comments. You can reach us on ft@sundaytimes.wnl.lk or call on 074-304112.
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