Best in class: stakeholder engagement

Royal Mail programme manager Graeme Barker and project manager Diane Glasspool had a major project on their hands – to reduce more than 70 large Royal Mail distribution centres to 36 units across the country. Spanning more than a decade, the scheme involved more than 5,000 people leaving the business, the consolidation of Royal Mail sites across the UK, including the closure of some depots, and a regular, at times difficult, dialogue with unions, employees, management and other stakeholders.

Consultation with the National Executive of the Communication Workers Union (CWU) was critical to the success of the project, Barker explained. “It wasn’t like you might imagine from TV – men in rooms smoking cigars late into the night,” he jokes, but the process was nonetheless essential to moving the programme forward. This included drafting agreements in consultation with the union on the closure of sites, and detailed design of Royal Mail’s plans, in consultation with not only the National Executive of the CWU, but also union representatives at a regional and local level.

“This was based around the miners’ strikes – legislation requires that you give everybody notice,” said Barker. “That’s a good framework and, when you get into it, conversations actually are enriched. With trade unions, of course, I dealt with everyone from the National Executive right down to local level, so your script or your dialogue changes on a meeting-to-meeting basis, which makes it more complicated.”

Ultimately, Royal Mail’s plans also had to be made public, so that businesses that rely on its services were aware change was coming, and all employees were in the know. This included informing staff and customers about what was going on as part of a 10-stage consultation process, part of the transformation programme. “That’s when the mood changes,” Barker said. “Everybody gets nervous because it has to go public; the union gets nervous, but then you get over that hurdle. The next hurdle is to start talking to the operators.”

Stakeholder ‘noise’

By this point, Royal Mail had developed what it called a “preferred final option” for any closures. The key in managing the various stakeholders was to soften the impact of the decisions that had been made and work with them to come up with solutions that suited both management and, ideally, colleagues across the business, Barker said.

As a programme manager, it meant you had to be comfortable with dealing with stakeholder “noise”, he pointed out. “Some project managers wouldn’t like it because of that, but I love my job.” A process of negotiation between staff, unions and Royal Mail management involving proposals and counter-proposals eventually delivered workable outcomes across the business. “We had to look at all the demographics and the costs,” Barker said. “You play out your preferred option and give the union the chance to come back and give theirs. We would look at that for a short time, and come back and say, ‘This is our option.’”

With 110,000 members, the CWU is one of the biggest single trade unions in the country, and Royal Mail delivers billions of items for customers across the UK each year – so the stakes couldn’t have been higher. “We had to consider everyone,” Barker said.

Glasspool added: “As an organisation, during the transformation we have been through in that 10-year journey, I think we have grown in our understanding of what hits the mark with the stakeholder. At the end of the day, it is about relationships and engagement. Our postmen and postwomen deliver our success. It’s about having the emotional intelligence to understand and invest time in them – you can’t invest too much time in them.”

Despite the value of transparency during the Royal Mail transformation project, delegates questioned whether openness is always the best policy when it comes to stakeholder management. There is no doubt that tactics – and diplomacy – are also important, suggested Suresh Sadanandan, head of projects and programmes at HS2. “The needs of the sponsor and the needs of the stakeholders can be different,” he said, adding that this entails a different approach to handling communications for each.

Echoing Glasspool’s point, he added: “Most of what we do is based on relationships. If you have a stakeholder that is open and encourages you to be the same, you will provide the information.”

Moderator Richard Young, consulting editor of Project, asked attendees whether having ownership and full understanding of the business case for a project was as critical to managing stakeholders as good relationships. “If you haven’t got a clear idea of the business case, is all the stakeholder management or engagement in the world going to help?” he asked.

Tabatha Bailey, lead sponsor at Highways England, was emphatic: “I totally agree.” She described the role of project sponsor as being similar to the producer of a movie, with the project manager being the director. “At Highways England, writing the business case for a project and securing the investment decision are part of what the sponsor does. I have to personally write the business case. Through writing it, I get wedded to what I am sponsoring – only then do I really get under the skin of the project.” There are many stakeholders affected by the business case, from the programme management office to the financial team and external stakeholders, such as the travelling public. “You have to understand the business case,” she explained.

Squaring the circle

Nick Shaw, senior portfolio director at Computacenter, which carries out IT change projects, said it was important to consider the impact stakeholders themselves could have on the business case. “How do you manage the stakeholder influencing the business case, which in turn influences the project?” he asked. “How do you square that circle?”

Barker argued that it is important to be pragmatic about change: “You need a core strategy, but be aware when change is coming. That means understanding the business case, but also understanding that, sometimes, stakeholder factors can influence it. If there is change, you have to be prepared to change the business case and manage new risks as they arise.”

Jane Cousin, senior resource manager, projects, at Computacenter, said the company is engaging with APM as a Corporate Partner in order to boost the skill set of its project managers in terms of managing and engaging with stakeholders more effectively. Much of Computacenter’s work is as a supplier to much larger organisations, such as Royal Mail, Cousin explained: “With the help of APM, we are trying to put in place some structure around how we manage stakeholders better.”

This includes the development of a supply chain “ecosystem”, she said, that will enable Computacenter to best engage in an effective way with “many different moving parts in terms of suppliers and customers”.

Young asked the roundtable delegates to take a step back. Is there a “grand unified theory” of what a stakeholder is? Russell Bradbury, senior project manager, business change, at RS Components, offered a clear definition: “I think it’s anybody that is impacted by, or can have an impact on, a project. It’s as simple as that.”

Young then asked if anybody around the table had been required to “knife” a stakeholder in order to move a project forward. Bradbury said there were, indeed, ways and means of dealing with difficult stakeholders. “My method for navigating a difficult stakeholder is to talk to the other stakeholders, and the project and programme board, so they understand the conversation I need to have.

“You must also understand the perspective of someone who may be disappointed by your decision-making and manage that conversation sensitively. Ultimately, people can come around to your way of thinking, or the prevalent way of thinking of the programme board.”

Glasspool and Bailey agreed that courage is important to effective stakeholder engagement and management. “It’s about having that conversation and managing that expectation,” Glasspool said. “It’s part of the risk management of that project as well. Risks must be raised, and you need to be courageous enough to do that at the right time.”

“Courage is an underused word,” Bailey added. There is also a strategic element in terms of understanding the influence a particular stakeholder has, she said. “Where stakeholders are concerned, I expect to work in partnership. I expect to get information upwards and, strategically, I expect to feed information downwards. But you also need to get in there early enough and make decisions in terms of ‘is this big, hairy, scary stakeholder as influential as they think they are, or is it just noise?’

“Sometimes it is just noise. If you understand the landscape before you kick off your project, you are more likely to succeed.”

Sadanandan concluded: “If you understand who your stakeholders are, what drives their needs, and what their accountability and sphere of influence are, then you will do well. When it comes to stakeholder engagement, everything boils down to relationships.”

Find out more at apm.org.uk/corporate-partnership-programme