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Crucial Conversations QA

Balancing Stakeholders

ABOUT THE AUTHOR
Al Switzler

Al Switzler is coauthor of four New York Times bestsellers, Crucial Conversations, Crucial Accountability, Influencer, and Change Anything.

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Crucial Conversations

Q  Dear Crucial Skills,

I believe it’s paramount to maintain a positive working relationship with all of our potential vendors, whether we use them or not. The goodwill of healthy person-to-person relationships often translates into discounts, freebies, and other considerations that benefit my company in the long run.

At issue is what happens when a campaign doesn’t work or if we have a disagreement with a vendor. My superior’s knee-jerk response is to insist that we never work with the company again. He appears to enjoy this tactic and even preempts me by canceling contracts. Given my beliefs and that our niche market has a limited selection of vendors, this feels premature and reactive to me. How can I help him understand that his approach is detrimental to our marketing program and is making my own job that much harder?

Peacemaker

A Dear Peacemaker,

To answer this question, I need to hark back to the creation of our name: VitalSmarts. (By the way, I love to hark.) For many years, as we consulted with managers and teams, we used a tool we called the Death-to-Vitality Continuum. The essence of the tool is this: Every individual, team, or organization fits on a continuum between death and vitality and is moving one way or the other. A leader’s primary responsibility is to help move her- or himself, her team, or his organization measurably toward vitality. The skills and tactics that move them toward vitality are the “smarts.” Hence our name, VitalSmarts.

As part of this strategy, we defined what vital means. In every case, and particularly in your situation, being vital means having all stakeholders willing and able to maintain a positive relationship with you. This goal becomes a balancing act. Some of the actions we take to please one stakeholder can negatively affect another. For example, if you lower the price of your service, you may find that you don’t have the revenue to pay your employees well. On the other hand, if you give employees a raise, and then raise the price of your service, fewer customers may purchase it. In either case, your organization may become less vital.

Keeping all stakeholders balanced can be difficult. There are other strategies that can also cause imbalance. One of those is process improvement. In complicated processes, leaders sometimes try to streamline one part of the process to reduce steps and costs, unwittingly moving the work and the cost to another department or team. And the new frustration can stay buried for months. I repeat, keeping all stakeholders in balance is difficult and important. That’s why in the best organizations, leaders have balanced scorecards that help them frequently see what’s happening so they can analyze and adjust.

Before I get to your situation, let me highlight one other factor. Not all stakeholders are equally visible or regularly measured. For example, many teams and organizations have measures that can allow a lag in the information they use to inform decisions. Often, financial measures are conducted daily, customer satisfaction measures monthly, and employee satisfaction yearly. A lot of dissatisfaction can grow in that time span. It is also interesting to note that when it comes time to identify key stakeholders, too often, one or more are overlooked until there is a crisis. Among the stakeholders that are always identified are owners, customers, financial institutions, and employees. Vendors, suppliers, regulators, and resellers however, are often missed. When any of these become unable or unwilling to maintain a positive relationship with the organization, vitality can suffer.

So here is some advice on talking with your superior to ensure your organization remains balanced and vital:

1. Share how vendors are important stakeholders. Be specific about how having a positive relationship has helped you, your team, and the company. Tell detailed stories about how a specific vendor went the extra mile to help your company out of a jam because your relationship with that vendor was positive.

2. Share how a relationship that has been improved is often better than one that has never met with a difficulty. Research on customer satisfaction supports this. If a customer has a negative experience with a company and that company responds with an appropriate solution, the customer’s loyalty is higher than that of a customer who has never had a problem to begin with. I’m not suggesting that you create a problem to solve, but that you solve the ones that come. Share stories about how this has worked for you.

3. Put the right issue on the table with your boss. You have two issues. One difference you have with your boss is opposing opinions about stakeholders in general and vendors in specific. You need to dialogue about that difference of opinion. You also have a second issue: your superior’s actions with vendors and how they have put important relationships at risk and made your job harder. The second issue is harder to discuss, I imagine. But talking about the first issue, and not getting to the second will not solve your concerns. You need to find out why he does what he does. You need to really try to understand. You need to be equally determined to help him understand how his actions are affecting your job. You need to get to the point where both of you understand what actions you each need to take to allow trust to be present in your relationship.

Your challenge is typical of many differences that affect how people work or live together. People have differences about what is the highest priority, about what defines quality, about what order things should be done in, and so on. There are enough differences to go around. Often these differences are unseen and unstated until there is some friction. “Ah, there’s the rub.” To solve these differences, you need to make sure you create the conditions of Safety, Mutual Respect, and Mutual Purpose. Then candidly and courteously put the issue on the table. Even with our best efforts, we sometimes don’t find a mutual solution; but with our best efforts, odds are we will.

I wish you well,

Al

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Al Switzler

Al Switzler is a New York Times bestselling author, keynote speaker, and leading social scientist for organizational change. For thirty years, Al has delivered engaging keynotes for an impressive list of clientele including AT&T, Xerox, IBM, and Sprint. Al’s work has been translated into twenty-eight languages, is available in thirty-six countries, and has generated results for three hundred of the Fortune 500. read more

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