The Six Principles of Stakeholder Engagement, Part 2

This post, written by Raj Sharma, originally appeared on Public Spend Forum

The External Scan. Often, major sourcing programs will apply all their energy and resources to engaging the internal stakeholder community, but will neglect the needs and interests of key external constituents. Suppliers, for example, can contribute a valuable market perspective to the sourcing strategy process—usually well in advance of any actual procurement.

Others, such as special interest groups or regulatory bodies, may have significant impact on a program. In the federal government, for example, small business goals weigh heavily in many procurement decisions. If a sourcing initiative is expected to affect opportunities for small business suppliers—either positively or negatively—outreach to small business interests is critical. Depending on the type and scope of the program, such external stakeholders may include the U.S. Small Business Administration, congressional committees on Capitol Hill, and small business industry groups.

Another example that is particularly applicable to the private sector concerns outsourcing production to a low-cost country. In developing such a strategy, sourcing managers must be cognizant of communities that could lose business as a result of the program. Engaging these communities early on can help to offset any potentially negative outcry or backlash that might derail the program. For instance, production of many Boeing 787 Dreamliners’ main systems has been outsourced to suppliers across the world. The impact on the local communities that previously wer involved in the production of those systems has in part led to the current labor upheaval and strikes that have disrupted production recently.

Exhibit 1 illustrates a high-level stakeholder map that our firm has developed for use in federal government supply management programs. In this example, we segmented the different stakeholder groups into six “tiers” to further clarify each group’s relationship to the program in question. A stakeholder mapping exercise like this is useful for identifying stakeholder groups at an aggregate level. But a comprehensive stakeholder analysis must also consider the key individual stakeholders within each group because their buy-in and involvement are needed if the program is to be a success.

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