As a procurement professional, your job should not be just reactive. A skilled buyer will conduct due diligence prior to making any business decision to ensure that it can add value and is the best option for the organisation. Part of the due diligence should be identifying, understanding the importance of stakeholder management related to the project or procurement.

What are Stakeholders?

  • Stakeholders are anyone or any organisation that has an interest or a level of power in relation to the work being undertaken.
  • Stakeholders can be categorised as internal or external.
  • Internal stakeholders are people that are employed within your organisation i.e your colleagues and managers.
  • External stakeholders are outside your organisation i.e you suppliers.

How to Identify Stakeholders

When embarking on a procurement it is important to understand who may be affected and who may affect the business so the first thing to do is to identify your stakeholders.

Wheel-style diagram titled 'Stakeholder Identification Brainstorming'. The circle is divided into segments, each posing a question to help identify stakeholders. Questions include: Who might be affected? Who are decision-makers? Who funds the work? Who has relevant expertise? Who uses the outcome? Who has information? Who can influence others? Who has an interest? Who must approve the project? Who has a problem to solve? A question mark is shown in the centre, indicating a brainstorming starting point.

Figure 4: Stakeholder Identification Brainstorming

If you have been in your position for some time you may be familiar with who the stakeholders are but if you are new or the project is something bespoke you may need to conduct some research to establish who you need to engage with. By brainstorming, asking colleagues, reviewing documentation and conducting enquiries you will be able to establish who the stakeholders are.

Not all stakeholders will have, want or need the same amount of engagement so, once identified you can categorise the stakeholders.

Using Mendelow’s Matrix to Prioritise Engagement

To do this, Mendelow’s matrix can be used. This model is based on two elements, the level of power and the level of interest the stakeholder has.

So, for example if you are looking to procure a new machine for your organisation you may have identified stakeholders as follows:

Table listing stakeholders involved in a procurement process, categorised as internal or external, with a brief note on their involvement. Stakeholders include: Supplier (External – supplies machine), Finance Manager (Internal – approves budget), Machine Operatives (Internal – use machine), Warehouse Cleaner (Internal – cleans area), Bank (External – loans money for procurement), Local Community (External – may be affected by noise), and HSE (External – needs updated risk register)

Figure 2: Stakeholders involved in a procurement process

Using Mendelow’s matrix you can categorise the stakeholders.

The supplier will have high interest and high power. This is because they will be keen to get a sale (high interest) and high power relates to the fact that if they don’t supply, a large problem will arise within the business.

Diagram of Mendelow’s Matrix, a 2x2 grid used for stakeholder analysis. The vertical axis represents Power (low to high), and the horizontal axis represents Interest (low to high). The four quadrants are labelled: 'Minimum Effort' (low power, low interest), 'Keep Informed' (low power, high interest), 'Keep Satisfied' (high power, low interest), and 'Manage Closely' (high power, high interest).

Figure 3: Mendelow Matrix, (Mendelow, 1991).

As a stakeholder with high power and high interest, the procurement professional will need to manage them closely. Keep them informed of the situation, pay the invoice on time, have close and collaborative relationships.

The HSE will have high power and low interest. If the relevant risk paperwork is not completed they potentially could shut the business down, but it is not likely that they will have too much interest in the day to day running of the business of the specific project – as such they need to be kept satisfied.

The machine operatives will have high interest as a new machine is coming but they will not have much power over the decision as to whether to invest or not – as such these people should be kept informed.

Creating an Effective Stakeholder Communication Plan

Once you have categorised all the stakeholders you can devise a plan to communicate with them at an appropriate level.

Triangular diagram illustrating stakeholder engagement strategies based on frequency of interaction and stakeholder influence. From left to right: 'Key Players' require frequent interaction and direct communication; 'Keep Satisfied' need regular interaction and periodic updates; 'Keep Informed' receive periodic interactions and are briefed as needed; and 'Minimal Effort' stakeholders are engaged occasionally with minimal updates. The diagram shows that as stakeholder influence decreases, the frequency of interaction also reduces.

Figure 4: Stakeholder engagement strategies

The more important the stakeholder, the more regular and bespoke the communication needs to be. Without being aware of who your stakeholders, you are open to risk as well as non- conformance.

It is imperative that all key parties are identified and communicated with in relation to a project or a procurement to avoid resistance, barriers, conflict and delays. Likewise it is not productive to spend valuable resources engaging with stakeholders that do not require our time or money. Mapping out the stakeholders, whilst it may be time consuming at the start of a project will add value and contribute to a well managed procurement process.

To Summarise

As a procurement professional, proactive stakeholder management is essential for successful decision-making and project execution. Stakeholders, whether internal or external, hold varying levels of interest and power in the procurement process. Identifying stakeholders early on and categorising them using tools like Mendelow’s matrix enables tailored communication strategies. By understanding and engaging with stakeholders effectively, procurement professionals mitigate risks, ensure compliance, and foster smooth project progression. Investing time in stakeholder mapping upfront ultimately enhances the overall procurement process and contributes to organisational success.

This blogpost was written by Katie Jarvis Groves a CIPS tutor at our college. Find out how to successfully engage with your stakeholders with a CIPS Diploma in Procurement and Supply.

References

Mendelow, A. L. (1991) ‘Environmental Scanning: The Impact of the Stakeholder Concept’. Proceedings From the Second International Conference on Information Systems 407-418. Cambridge, MA.