Transformation Roadmap Preparation – Stakeholder Engagement and Incentives

Introduction

One of the most common elements in many troubled and failing transformations is the failure to thoroughly engage, empower, incentivize, encourage, and follow through with the transformation's stakeholders. Stakeholders are individuals or groups interested in or influenced by the change process, such as employees, managers, executives, customers, suppliers, system integrators (SI), regulators, or shareholders.

Stakeholder engagement and incentives are critical factors for success in any enterprise-wide transformation. Engaging, encouraging, and empowering stakeholders means collaborating with them effectively, understanding their needs and expectations, addressing their concerns and issues, and involving and incentivizing them in their participation, decision-making, and implementation strategy and roadmap. The incentives are the rewards and benefits that motivate stakeholders to support and participate in the transformation, as well as transformation outcomes such as recognition, career advancement, financial compensation, improved working conditions, etc.

Stakeholder engagement and incentives can help achieve several outcomes in a transformation, such as:

• Building stakeholder trust and commitment can reduce resistance and increase buy-in for the change and expected outcomes.
• Aligning stakeholder interests, objectives, and measures with the transformation goals and vision provides a clear path forward and instills confidence in the transformation's direction.
• Leveraging stakeholder experience, knowledge, and expertise can improve the quality and effectiveness of the transformation strategies, solutions, and outcomes, demonstrating the value placed on their contributions.
• Creating a positive and supportive culture for collaboration, idea exchange, and change can foster innovation and learning throughout the transformation journey.

As part of the transformation roadmap, planning and preparing for stakeholder engagement and incentives is essential. The following sections will describe how to identify the key stakeholders, understand their current performance measures, and prepare to engage them in the transformation process.

Identifying Critical Stakeholders

One of the first steps in planning for enterprise-wide transformation initiatives is to identify the critical stakeholders who have a significant interest or influence on the outcome of the transformation change. These stakeholders may include internal or external parties, such as executive leaders, employees, customers, suppliers, regulators, competitors, or SIs. Identifying critical stakeholders can help to:

• Understand and document their needs, expectations, and concerns regarding the transformation.
• Communicate effectively, transparently, and promptly with them throughout the change process.
• Seek their feedback, input, and support for the transformation objectives and activities.
• Align their incentives and performance measures with the desired outcomes of the change.
• Identify and manage any potential risks, conflicts, or resistance to the change.

Various methods and tools, such as stakeholder mapping, analysis, or interviews, can be used to identify critical stakeholders. A common approach is to use a stakeholder matrix that categorizes stakeholders based on their power level and interest in change. The stakeholder matrix can help prioritize and tailor the engagement and communication strategies for different groups of stakeholders based on their position in the matrix.

It is critical to note that the stakeholder matrix is not static and that stakeholders' power and interests may change over time, depending on the context and dynamics of the change. Therefore, it is essential to regularly review and update the stakeholder identification, performance measures, and analysis to adapt the engagement and collaboration plans accordingly.

Understanding Current Stakeholder Performance Measures

Identifying and understanding stakeholders' performance measures can be leveraged to incentivize their successful engagement in a transformation. Aligning stakeholders' performance measures with the desired outcomes and benefits can motivate their continued engagement.

Some examples of how to align stakeholder performance measures with the change objectives are:

• Performance measures for stakeholders with high power and high interest in the change, such as C-Suite executives, vice presidents, etc., can include indicators of their active involvement in the change, making key critical decisions in a schedule-driven timely manner, allocating sufficient resources, etc.
• Stakeholders with high power but low interest in change, such as regulators or influencers, could have their performance measures include incentives for collaboration, alignment with change, and endorsing those changes. This would make their role and job easier to perform and auditable.
• Stakeholders who have low power but high interest in the change, such as end-users, customers, suppliers, and other beneficiaries, performance measures can include incentives that align their needs with the resulting transformation solution outputs, such as the volume of goods and services consumed to meet their desired discount criteria.
• For stakeholders with low power and low interest in the change, such as external parties, suppliers, SIs, or co-opticians, their performance measures could include acknowledging and accepting meeting the desired outcomes, which can directly influence their billing fees, etc.

By aligning stakeholder performance measures with the targeted vital results and outcomes (KRO), organizations can create a win-win situation for stakeholders and the organization. Aligning both can also provide the basis for monitoring and evaluating the progress and success of the change.

It is important to note that the stakeholder performance measures should be realistic, relevant, and consistently measurable. The stakeholders should communicate and agree upon these measures before initiating the transformation. They should also be reviewed and updated regularly, as the stakeholder matrix and context may change over time.

Preparation for Stakeholder Engagement

Preparing for Stakeholder engagement should be part of the transformation's preparation phase. The sooner stakeholders can be engaged, informed, and encouraged to participate actively, the easier the transformation planning process can be.

Engaging stakeholders early and often creates a greater sense of ownership and commitment, as they feel their input and concerns are valued and considered. This inclusive approach helps identify potential risks and issues early on, allowing for proactive management of these risks. Additionally, regular engagement ensures that stakeholders are well-informed about the transformation's objectives, KROs, and progress and enhances transparency, which creates ever-greater trust.

Continuous collaboration with stakeholders enables the transformation team to tap into a diverse pool of insights, experience, and expertise, which leads to more innovative and effective solutions (and an evolving roadmap). It also facilitates better alignment of the transformation goals with the stakeholders' needs and expectations, thereby increasing the likelihood of achieving the desired outcomes. Engaging stakeholders early and often helps build a strong coalition of supporters who can advocate for the transformation and help drive its success.

Stakeholder Follow Through and Continuously Improve Engagement

I agree that preventing problems before they happen (PPBTH) is the best approach to mitigating stakeholder risks. PPBTH is also one of my client’s business and internal operational mottos. The principle of PPBTH for organizations rests on proactively identifying and mitigating potential risks before they escalate into significant issues. From a stakeholder engagement, empowerment, and encouragement perspective, PPBTH requires the following:

• Early Stakeholder engagement and orientation of the transformation
• Stakeholder monitoring, measurement, and feedback
• Proactive risk management
• Standardization of engagement and collaboration measures
• Formalizing measures to drive data-driven, fact-based, decision making

Thus, stakeholder follow-through, continuous improvement of engagement measures, and collaboration on how the engagement measures can evolve create shared ownership between the transformation team, its partners, and impacted stakeholders.

No matter where your organization is on its transformation journey, there is always time to initiate or improve your current stakeholder management engagement plan and measures. You may already know those stakeholders who are most critical of the transformation. Go and engage them, understand how they are measured, and build a trusting and transparent relationship no matter how resistant they can be. If you are altruistic and persistent in your pursuit, I can assure you that they can become your and the transformation's biggest advocate.