No doubt about it – internal stakeholder engagement is critical to the success of procurement projects and contracts.
Around two-thirds of procurement decision-makers globally say that internal stakeholder engagement is a challenge, with 14% saying it is an “extreme” challenge.
More worryingly, a “lack of internal engagement” is cited as the top reason for targets not being achieved, according to research by CIPS.
In the 2019 Hays Salary Guide for Australia, Scott Dance, Director of Hays Procurement & Supply Chain, says that “For perceptions of procurement to continue to improve, procurement professionals should take steps to develop their internal stakeholder management skills.”
So, what steps should you take to improve stakeholder management?
1.Profile your stakeholders
Just as marketing managers need to profile their customers, you need to profile your stakeholders. Group your stakeholders into tiers, as you would suppliers or customers. For example, bronze tier stakeholders might be those you chat to over coffee.
Silver tier might be people you arrange formal meetings with, and gold stakeholders are those you spend lots of time collaborating with. Profiling your stakeholders will ensure you dedicate an appropriate level of time and resources to the right people.
Different stakeholders will require different approaches, which is why this step is important as a starting point.
2.Align procurement activities to their agenda
Find the ‘Why’. According to Scott Dance, stakeholder management means learning how to engage with the different agendas of a range of internal stakeholders – including the procurement team itself. Turn the procurement team’s activities into benefits that are relevant to each stakeholder group, whether that’s the CFO, CMO, or CIO.
This means first being able to understand your stakeholders’ needs and goals. Take an outside-in perspective. What are the business objectives for that unit? What drivers create value for each team? What can you bring to their agenda?
Now, drill down to the one thing that’s driving them – are you aligned to it?
3.Demonstrate deep knowledge
Add value by showing that you understand your stakeholders’ categories, suppliers and markets. Use conversations to showcase that value. They might be the experts, but you can add value in ways they might not realise.
4.Focus on face-to-face
Even if you’re spread across regions, aim for face-to-face communication wherever possible. Get to know your stakeholders, talk to them in person and build trust. Speaking at the eWorld Procurement conference in London, group procurement director at McLaren Group, Jamie Foster, explained how personal relationships with stakeholders was key to his role.
He said, “Everyone talks about communication, stakeholder engagement, all these other great buzzwords. What it really means is do you get along with that person or don’t you? If they are walking down the corridor, do you pretend to look at your phone or are you going to engage with them?”
According to Ciaran Owens, head of procurement excellence at Imperial Brands, business apathy is a major barrier to procurement transformation. He suggests procurement professionals need to “build alliances” with other departments. Start by identifying who you can have meaningful conversations with and ask, ‘What does procurement mean to you?’.
Stakeholder engagement can make or break procurement. If you want to build a successful career in procurement, you need to be able to build trust with stakeholders, communicate successfully and create real value.
Upgrade your strategies to engage and manage stakeholders in this online short course.