How are you scoring on your Stakeholder Balance Sheet?
Returning to the topics of both Books & Stakeholder Management, I recently read “The Stakeholder Balance Sheet” by Farrokh Suntook & John Murphy.
I was tempted not to review this book, as there are elements that are outdated or I dislike. However, I still believe the content is very helpful & the structure relevant to help many leaders today.
The field of Stakeholder Management is too often vaguely defined. Leaders are given advice that focuses on anything from relationship building to personal presence to commercial awareness. All under the umbrella challenge of ‘getting better at managing your stakeholders’.
One of the reasons for this imprecision & misdirection is bosses lacking a framework or guiding model to explain the gaps they see. This book helps address that gap. The polymath nature of its scope helps explain this long-running management challenge. In many ways, mastering managing your stakeholders means understanding each element of your business.
Ways this book could be improved but is still worth reading
A term that is regularly used in this book is ‘a market-sensitive organisation‘. That is a good way to think about the aspects covered. Complimenting the three lenses I described when developing Commercial Awareness in analysts, this takes a similarly broad view of Stakeholder Management (quantitative & qualitative, internal & external).
So, if I believe this book is so important & am praising its guiding model, what is the problem? I’ll raise two concerns now so that you can decide if this book review is for you:
- Some examples are dated. In a few ways, this content is out-of-date in the uses of data & analytics that it proposes. Since 2008, when this was published, huge strides have been taken in Data Science, Marketing Technology & even Business Intelligence. Broadly, a number of the solutions proposed could be improved by greater use of behavioural data, measurement & automation.
- Poor Data Visualisation. As someone who teaches on this topic, I have to point out that most of the charts used in this book need to be improved. A classic is the market dashboard in Figure 10.2, the use of background textures on that could make it into my #BadDataViz game on my courses.
So, it would be great to see this book updated with those two concerns addressed. But, instead, I encourage the reader to think through those improvements for themselves. Stop after each chapter and think
- How could this challenge be helped by the use of Data Analytics or Data Science? How could behavioural data, measurement & perhaps categorising or predicting models help me master this challenge?
- What is the role of good Data Viz here? What well designed simple visualisation would help others in the organisation understand?
Taking that approach, I encourage any leader (especially data & analytics leaders) to work through the questions that form the backbone of this book. So, without further ado, let’s reveal their helpful model.
A 9 point plan for sustaining and growing your market profitably
That heading is the title that Farrokh & John give to their central model. It emphasises their focus on the goal of proactive stakeholder management. Not as an end in itself, but as a means to sustainable business growth.
The rest of the book is structured in chapters that address each of these 9 points. In their own language those are:
- Market segmentation & targeting
- Understanding the real stakeholder drivers
- From customer satisfaction/branding to loyalty/attraction
- Decision-making dynamics
- Understanding staff motivation and perceptions
- Recognising the role of other external stakeholders/influencers
- Communication
- Assessing new products/services
- Monitoring performance
You can see what I mean by breadth! This proves to be a really useful structure for the rest of the book. Each chapter provides depth on each topic. Including both relevant theory & examples from practice (often in industry or financial services, but helpfully with plenty of B2B examples).
To give you a flavour of some of the topics covered & where you might want to dig further, let me rename that list in today’s more common parlance.
- Market Segmentation, Targeting & CRM
- Beyond Value Segmentation, intangible drivers of behaviour
- CX, Customer Insight & the right positioning for your brand
- Diagnosing Decision Making Units (esp. in B2B markets)
- Going deeper than Employee Engagement (perceptions/motivations)
- Your wider stakeholder ecosystem (inc. role of influencers)
- Stakeholder communication (and lots of it)
- Innovation and testing New Proposition Development
- Scorecards & use of BI in monitoring stakeholder management
I hope that helps bring to life the useful way that this book spans a number of disciplines. Especially for those in senior leadership roles, it provides a useful prompt to address your blind spots & see the whole picture. As I encouraged when talking about Commercial Awareness, it leads leaders through the process of understanding their business ecosystem. How does the organisation function as a whole & in the context of its market (with influence in both directions)?
It is often more useful to ask a question = they give you plenty
When coaching leaders, we often talk about it being more effective to ask questions than offer advice. This is also true when seeking to understand & measure the effectiveness of stakeholder management in your business.
As well as their 9-point plan framework in this book, the other big win is the question sets they provide at the end of each chapter. These are arranged as scoring sheets that build together into a Stakeholder Balance Sheet by the end of the book.
For organisations who really value measurement, this could be a useful instrument to implement as an audit in their business. It may be overly onerous to use in full as an ongoing tool. But, as a diagnostic, it will usefully “turn over stones” right across your business and so highlight the questions or measures to keep tracking.
Even if you don’t choose to use the scorecards and entire Balance Sheet in full (useful commercial analogy), the questions are worth checking out. I found when thinking about my previous & current roles there are questions I would not be able to answer. There were also ones where the scores were lower than I would want them to be.
Whatever my concerns about parts of this book being dated, such a tool is timeless. For that structure & piercing question alone, I recommend this book. It is a useful prompt to systematically think about your Stakeholder Management (or lack of) & commercial impact right across your business. That is worth any business considering.
How do you measure the effectiveness of your Stakeholder Management?
Chapter 10 of this book offers advice (and questions) on “the ongoing process of monitoring your performance“. Reading through that made me realise how rarely I see reporting, dashboards or other BI focussed on this topic. Most leaders will agree that stakeholder management is important. But, if you get what you measure, where is the measurement?
Have you seen any positive examples of monitoring stakeholder management? Any data visualisations? Any useful frameworks, questions or metrics that helped you understand progress better? If so, please do share below.
It feels to me like an area of business that still needs more focus. So, thanks Farrokh & John for your contribution.