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Know Your IT Stakeholder!
by Stephen E. Lipka, PhD, CMC

 
   
 
   

"Succeeding" in IT means you're a partner in the business, you're respected and sought out, and you're funded to do work that contributes to business. You can increase your chance of success by understanding your stakeholders. That starts with knowing who your stakeholders are and understanding what motivates them.

Before we begin the tour, let’s be clear why we’re using the term “stakeholder” rather than “customer”. The old IT mindset that knew or cared little about business process, practices, priorities, and issues has brought about a new scrutiny in the language we use when we refer to our internal peers. This reflects the shift in IT towards becoming an integral, collaborative part of the business rather than a necessary but abhorred one. It’s not “users” or “the business,” and “customer” may not truly reflect the collaborative relationship IT should have with peers.  Thus, we’re using “stakeholder” to mean any organization that uses IT services, benefits from IT services, or pays for IT services, and that includes internal peers, peer organizations, and external customers.

So let’s take a tour.

Your Boss

At the top of every organization is the President/CEO, who is responsible for leading the company in the right direction. Generally, they seek better company-wide performance. But there are several personality attributes that affect their motivation. Let’s look at two:

  • Strategic planner vs not: If your CEO believes in strategic planning for the business, you’ve got a free pass to find out what’s important. The critical words here are “believes in.” A true advocate puts strategy and execution plans in place, measures progress against them, keeps them current, and rewards contribution to achievement. For these leaders, achievement of the plan is what matters. For you, the CIO or IT Director, building an IT strategy and plan that supports the organization’s – and executing to it – makes for a happy CEO. On the other hand, if your CEO is a fair weather believer (and that includes those who pay lip service to strategic planning) what matters varies according to the interests of the individual. The extremes are minimizing cost (“IT is just a cost center”) to innovation (“IT should be a disruptive influence”). Unfortunately, you’ll have to figure that out on a case-by-case-basis. Worse, you may have to stay tuned as the CEO’s priorities change.

  • “Do what I say” vs. “do what I do”: We’ve all worked for leaders who want an unlocked laptop on which they load all kinds of untested software but complain when the machine crashes. A more pragmatic group of leaders will accept what you give them, inquire about technology that interests them, ask you to test it, and suggest making useful technology part of standard issue. The former values personal productivity or cool technology and may also value immediate gratification; the latter values collective productivity.

There are other attributes of CEOs, but these two should give you some guidance on what could matter to them.

Not quite at the top of the organization is the CFO. CFOs focus on money. My experience leads me to conclude there are two kinds of CFOs – those who think of money as something to be retained and those who think of money as a tool to get more money. The former is likely to focus on cost reduction and low bidders. The latter is likely to entertain investments for IT but will also expect an ROI analysis showing positive expectations. I’ve actually discussed this with a few CFOs, and they agreed this is in the CFO’s DNA: CFOs of either kind don’t cross over to the other side. You may succeed in motivating both with cost-cutting ideas, but innovative investments will not likely be readily received by cost-focused CFOs.

So why are these two officers of the company appearing under “Your Boss”? There’s a high likelihood that you, as CIO or IT Director, will report to one of these. (The COO may be a lot like the CEO, but more operational.) This is a hugely different stakeholder, and for this we have evidence. A Forrester report (1) developed from a 2008 survey showed that CIOs who worked for CEO’s were more likely to have projects focused on innovation, while CIOs who work for CFOs were more likely to have projects focused on cost reduction.

Your (Peer) Business Partners Inside the Organization

The senior managers leading sales, marketing, engineering, manufacturing, or service want to maximize the productivity of their organizations with better automation. They are paid to produce, and if your technological support helps them reach that goal, they’ll be pleased. But don’t expect them to be happy about paying for the supporting technology, particularly if they don’t understand how it supports them, how the cost was allocated to them, or why they had no choice.

So how can you succeed as their technology providers? First, learn their business, understand their language, understand the critical factors that lead to their success, and understand how they contribute to the overall business. If you don’t do this, you can’t speak convincingly about how or why technology will help them, and you yourself will be unable to truly understand the relative effectiveness of alternative technology and support choices.

Second, why try to force any IT budget on your business partners? Why not create a steering committee to choose business needs to solve and to allocate funding to solve them? Your business partners will be much more willing to allocate money for value if they drive the governance process.

Your peers will be seeking resources for their own projects, so any attempt to divert resources to IT – directly or indirectly – will be measured against your peers’ standard of “what’s in it for me?” Speak their language. Have them vote on IT direction, guided by their own self-interest or their mutual benefit. It’s unlikely you’ll motivate them by selling or forcing “solutions.”

The Internal User Community

As individuals, users are not literally stakeholders in IT, but taken as a whole, they are indeed. Ask users what about IT is important to them, and chances are the answers will include: “IT has to make my work easier;” “My machine (or the applications I use) can’t break;” and “When something’s broken or I don’t understand it, I need help fast.” As a whole, then, what’s important to the user community is productivity, even though they don’t say that. You can gauge this with user satisfaction surveys, a stand-in for the productivity contribution measurement.

The quest for productivity has another side, however. Users and small organizational units have the urge to build little applications in Excel or Access, or to use cheap or free consumer technologies for business purposes.  Some studies show that users are increasingly taking over technology projects. Speed of deployment matters to them; corporate red tape doesn’t. Few users are motivated by corporate security and data integrity concerns. If this is the case in your organization, you can satisfy by institutionalizing this approach: Provide architects, project management training, and guidance on compliance matters.

Finally, on a personal level, many younger users care about collaboration, social networking, blogging, and related technologies. Satisfy these individuals by enabling such technologies for use within the company and the outside world. (See below.)

Your Company’s End Customers

To what extent are the company’s customers your customers? Answer that question by listing all the customer touch-points.

Are you providing direct service, like an ISP (think AOL) or a hosted application service like Salesforce.com? If so, your company’s customers are your customers. They’re motivated by the value proposition they bought.

Do you operate a web-enabled sales or service channel, like hotels.com? What likely matters to customers is that – without calling customer support – they can transact business quickly and easily, at any time, for anything they might want to do (e.g., make, change, cancel, or check a reservation).

More broadly speaking, if you operate the company website – whether or not the site provides sales or service – your services reflect on the company. Consumers (not yet customers) may want information about products and services. And customers and prospective customers may want to engage your company or may want to talk about experience they’ve had with your company. Social networking and blogging are important methods of engagement for the youngest consumers.

Finally, do you operate a telecenter for customer sales and service, as, for example, an insurance company might do? The company’s end-customers are not your customers, but how you perform reflects on the company. IT cannot likely make these customers happy, but it can sure make them unhappy. Consider: “I’m sorry, sir, I don’t know why your policy was canceled. The system is down. Can you call back on Monday?” Or consider my bank’s website, which insists that I cannot transfer “1200” but I can transfer “1200.00”.

Your Channel Partners (Distributors and Resellers)

What’s different when your company sells through distributors? Quite a bit. Distributors want sales support, including access to information and sales support literature or websites, and they want service support from readily accessible and knowledgeable staff. While your peers in sales and service will have to provide the skilled staff and the materials, your telecenter and web support services will have to be up to the task. Depending on your business model, you may also have to support end-customers, potentially with service desks branded to match your distributor.

Most critical for a sustainable relationship, however, distributors will need access to your systems, easy integration, and top-notch systems support. 

Your service attitude in understanding their business motivation, distinct from that of your own company, will matter. Do a bad job of it all, and – unlike your internal peers – your distributor can walk away.

Franchisees

Unlike distributors and resellers who have their own brand and identity, franchisees want to act like they’re your company and look like they’re your company. Most important, franchisees want your company to redirect leads to them – like the Ford website offering to find a dealer near you, or the Coldwell Banker website that routes you to a local office when you find a listing that interests you.

For some franchise businesses, the value proposition to franchisees may include template websites that allow franchisees to populate with their information, listings, services, service staff, etc. and present it as their own. In addition, an intranet may be an important means by which franchisees can interact among themselves or communicate with the company.

All of the above is no more complex than any other kind of technology-based service you’d provide any external customer. Satisfaction with your services, however, will be motivated by how well you support their ability to do business. Unlike distributors, who may be able to walk away, franchisees are typically bound by contract to represent the brand for some period of time. However, franchisees may have very similar needs and can speak with a common voice, which can help you define services. The common voice can also prove formidable if you fail to provide useful, high quality service.

Conclusion

Stakeholders are motivated by their own interests. Understanding the business and personal objectives of each individual stakeholder will help you understand how to serve them. Hopefully, this article has shed some light on the needs and motivations of stakeholders you may encounter in your role as an IT leader and will help you and your IT organization succeed in its mission.

Reference

(1) http://searchcio.techtarget.com/news/article/0,289142,sid182_gci1322330,00.html


       
   
 
       
   

The Author

Stephen Lipka

Stephen Lipka is a Principal of Avatar Strategic Partners, where he guides clients to higher profits through better use of information technology. His career spans 34 years in management, consulting, and product development. Steve is a Certified Management Consultant (CMC), a designation held by only 1% of US management consultants. He received his Ph.D. in Computer Science at SUNY Stony Brook. Reach Steve at slipka@Consult-Avatar.com.

 
       
   
 
       
   
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Copyright 2009 by Stephen Lipka. All rights reserved.

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