Stakeholder Analysis

When we conducted a survey for our ground-breaking report Creating the Knowledge-based Business, customer knowledge was cited by 96% of respondents as very or extremely important, a full ten percentage points ahead of the next category, best practices knowledge. Although customers are a key stakeholder and a source of great value to an organization, other stakeholders can be equally important, which is why some measures of intellectual capital substitute the label 'Stakeholder capital' or 'relationship capital' in place of 'customer capital'. In this part of the roadmap, we consider what is involved in stakeholder analysis and what it contributes to a KM initiative.

Purpose

There are several important outcomes that can be achieved as a result of a good stakeholder analysis:

• A better understanding of the organizational and wider context within which a KM initiative sits, e.g. the organizational challenges, senior management priorities, changes in the external environment
• Understanding the power base within an organization - who has a strong influence on how other beahnve and perform
• Identifying those stakeholders who can help and those who can hinder the implementation of KM projects
• Providing insights that help focus additional data collection on those business areas or types of knowledge which are critical to success

Because much of the knowledge that key stakeholders have is pertinent to wider organizational issues, our own consultancy work usually puts interviews with key stakeholders, and examining relevant documentation, as the first activity within the assessment phase, ahead of steps such as the knowledge audit.

The Stakeholders

The first step in stakeholder analysis is to identify them by category and then by individual names for those that are representative or influential within their category. Here are some typical categories and what they might contribute to the knowledge base that underpins the KM programme:

• Customers - although some of the focus is customer knowledge, it is important to understand different types of customers, their expectations from the organization, how they use the organizations products and services; often, a marketing team or sales manager can provide this perspective, but it is also good to interview a few real customers to see things from ther perspective; generally it is important to segment the analysis by different customer groups; and don't forget that customers can be internal, the recipient of services from another part of the organization
• Employees - employee satisfaction surveys can often provide useful insides into organizational culture, communications patterns and knowledge flows within an organization; employees, particularly in a workshop brainstorming session, are usually the group best placed to identify potential barriers to successful implementation
• Senior managers - this key group have a better strategic perspective on which direction the organization is heading; they are more aware of key challenges and often very perceptive about the role of knowledge and where lack of knowledge impacts good decision-making; also you will often find competing factions within this group, so understanding their underlying motivations can help during the implementation and change management aspects of KM
• Functional support managers - these are from the functions whose input has a key influence on KM programme outcomes; it includes in particular HR, training, IT, but may also require involvement from finance, quality, strategic planning; it is important to understand how practically they can support (with resources and knowledge) any proposed KM projects
• System users - even today, many computer-based KM systems do not give this group enough attention; too much relaince is often given to what the business process documentation says, rather than what individuals do in practice; whereas their knowledge needs and networks should be identified as part of the knowledge audit, the stakeholder analysis should concentrate on their relationships with other departments (especially IT) and their perspectives of earlier systems implementations
• Board members - though not involved in day-to-day affairs, board members come in with a good perspective of the outside world and the competitive environment; they can help reaffirm the strategic inputs that are gained from senior management
• Alliance partners - these can be important, especially where a joint venture generates new knowledge, where defining ownership and rights can be crucial; in any case, the existence and practice of various alliances may influence the way in which KM activities are conducted.

This is just a partial list. Depending on the type of organization your key stakeholders may include investors, suppliers, trade associations, government departments, public sector agencies, regulators, volunteers, community groups and so on. The bottom line is that many KM initiatives consider at most only 2-3 stakeholders, whereas our experience indicates that consideration of 6-8 is more useful in providing direction for the KM programme as a whole. That does not mean to say, that this increases substantially the amount of work, such as the number of interviews, that needs to be carried out during this step. It means articulating clearly which are the key stakeholder groups and what their impact is likely to be on the KM programme. It may well be in a few cases, that a preliminary set of interviews and analysis may narrow the focus to only two or three stakeholder groups, but would these be the same two or three that you thought of first?

The Analysis

The focus on outcomes is different for each group, along the lines suggested above. Some of the key things that you should aim to derive from the inputs from stakeholders are:

• Their rôle - what is their rôle with respect to the organization and to the wider context? What are the implications for KM?
• Their general needs - what are their expectations of the organization; what benefits do they receive as stakeholders?
• Their knowledge - what knowledge do they need to perform their rôle for the organization? Where do they source this knowledge? This is more general for external stakeholders; for internal stakeholders this would be addressed in the knowledge audit.
• Their contribution to value - how do they contribute to better outcomes; what knowledge do they possess that the organization can exploit?
• Their relationships and networks - what is their relationship with the organization; is it one-way, two-way, single focus, multi-faceted; how do they relate to the organizations competitors, customers, suppliers; what networks are they part of; what knowledge do they gain through these relationships?
• Their influence on KM outcomes - what rôle might they play in the roll-out of KM; what are their own perspectives on the value of KM and how it should be managed?

The results of a stakeholder analysis should be discussed with senior internal stakeholders and should help to prioritize work in subsequent phases. As the programme evolves this analysis will be continually refined, so this is a good opportunity to consider how stakeholder knowledge (the knowledge you have about your stakeholders) should be organized, stored and managed in accordance with good KM practice.

Last updated: 19th March 2011