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Organisations have a number of different business relationships with different groups of people and agencies; those tend to be either customers or stakeholders but can be internal or external. Customers traditionally buy products or services, however customers can be internal, such as other team members and departments within the organisation, and external, such as service users and their families. Stakeholders are different in the fact they have an interest or concern in the organisation and are affected by decisions made, this includes employees, suppliers, shareholders, government agencies, contractors, local residents, and customers.
It is therefore important as a leader that good strong business relationships have been built with those individuals and groups. It is also important to establish and develop a relationship with each customer, whether one-off, brief transaction or an ongoing long-term business relationship. To achieve those relationships there are a number of skills that are needed and approaches that can be used.
The skills needed to help build business relationships with different individuals are, effective communication, organisation and planning, and awareness of objectives and expectations.
Effective communication skills are paramount to managing and developing a relationship and come in a wide range of verbal, written and body language skills. Communication styles and methods need to be adapted all the time to suit each situation and each individual, as it is important to make sure that the messages and information are clear and easy to understand. This skill allows us to influence decision-making, establish trust, build rapport, maintain engagement, solve problems, and maintain good records that help with management.
Organisational and planning skills are useful for planning head, being on time, keeping accurate records, organising meetings and giving other people regular attention; those are all important skills for keeping both customers and stakeholders involved with what is happening. Awareness of objectives helps us focus our actions and words to help support the organisation, but we also need to be aware of the other person’s expectations so that resources can be targeted and approaches adapt were needed. Alongside those skills there are models that look at emotional intelligence and conflict, which will affect how you deal with customers and stakeholders.
Well done so far Shanon, with stakeholder management you will also need to include the following:
Stakeholder power influence grid and maybe even the salience model. Also the use of a RACI chart . These are tools for recognising where a stakeholder fits within your organisation and therefore how you may manage that relationship and also the RACI [ responsible, accountable, consulting, informed] makes sure you involve that at the appropriate level. This combined with what you have below all helps stakeholder management
Some stakeholder relationships are straightforward and are with people that we work with regularly, others are more irregular and complicated, especially when different stakeholders are brought together for a project. Those relationships can be sensitive as we rely on stakeholders to use their influence to help achieve objectives. What we begin to realise is that not all stakeholders are the same. It is essential to understand the needs and expectations of our stakeholders and depending on the stakeholder will depend on how much attention we need to give them. This brings us onto the power influence grid; this considers the levels of power and interest they have. Power of the stakeholder means their level of influence, and interest means the level of interest they have in the various activities the organisation does. The key here is to establish which levels each stakeholder has and use this to understand and decide how best to communicate with them. The model is simple group 1 has a low interest and power so therefore requires the least effort. Group 2 has a high interest but low power meaning that they need to be kept informed and consulted on ideas but they don’t really get a say. Group 3 has low interest but high power resulting in those individuals needs being meet and engaged with decisions. Finally, group 4 has high interest and power making them the key players and should be the main focus when communicating with stakeholders.
As well as the power influence grid there is the Salience model, this helps to identify and analyse stakeholders needs. The Salience model uses three parameters to categorise stakeholders; those are power, legitimacy and urgency. Power is the ability the stakeholder has to influence the outcome of an organisation. Legitimacy is the authority or level of involvement the stakeholder has. Urgency is the time expected by stakeholders for responses to their expectations. The Salience model is a Venn diagram, each assessment parameter has a major circle and the intersections of each major circle helps to identify stakeholders that have multiple needs. Each stakeholder fits into a different description as per the Salience model. The core (A) are critical stakeholders and need to be provided focused attention, they fit in the centre section (Power, Urgency, Legitimacy). Dominant (B) stakeholders have power and legitimacy but no urgency, their expectations should be the focus but there is not a lot of urgency. Dependent (C) stakeholders have no real power, however, they need to be managed as they can quite easily choose to align themselves with other stakeholders and influence the organisation. Dangerous (D) stakeholders have power and urgency but no legitimacy. They need to be kept appropriately engaged or satisfied. Latent (E) stakeholder only get into the organisation if something has gone wrong. Over communication of micro-level details with this group is not a good thing to do. Demanding (F) stakeholders are individuals that always seem to think that their work needs your immediate attention. Spending too much time with these stakeholders, won’t actually be productive. Discretionary (G) stakeholders require regular status updates and they will be happy. Finally, non-stakeholders (H) are not involved with the organisation and investing time with such individuals will not help the organisation.
G C F A D B E Power Urgency Legitimacy H
Alongside those models we can also use a RACI chart to make sure that we are involving those stakeholders at the appropriate level. RACI stands for Responsible, Accountable, Consulting and Informed. The RACI categorisation provides clarification of responsibilities that each party plays in relation with activities that are needed to be performed and decisions that have to be accomplished. Responsible means that they do the work to achieve the task. Accountable relates to who has authority to approve or disapprove the result. Consulted are the individuals who need to be consulted before a final decisions or action is taken. Finally, Informed is who need to be informed of the result after a decision or action is taken. This can be done easily in a RACI matrix by firstly identifying all the activities involved and list them to the left hand side. Then identify all of the roles involved and list them along the top. Then complete the cells of the matrix, identifying who has the R, A, C, I responsibility for each activities. This makes it easy to then see who is responsible for each activity and which stakeholders are responsible.
Emotional intelligence is defined as ‘The ability to identify, assess, and control one’s own emotions, the emotions of others and that of groups’. Not only this but use them effectively in interpersonal relationships, having the ability to understand how people feel and react can be extremely useful when building relationships in the workplace. There are two levels to emotional intelligence that being personal such as understanding our own feelings or reactions, and interpersonal such as understanding other people’s feelings and reactions.
Daniel Goleman’s model (1998) focuses on emotional intelligence that involves a number of competencies and skills that drive leadership performance and consist of five areas. Those areas are, self-awareness, self-regulation, social skills, empathy, and motivation. Self-awareness is knowing your own emotions, strengths, weaknesses, what drives you, your values and goals. It is also about recognising their impact on others whilst using what they know to guide decisions. Self-regulation is about managing your emotions and impulses, but also being able to adapt to changing circumstances. Social skill include managing others emotions to be able to move people in the right direction, and empathy is about recognising, understanding, and considering other people’s feelings when making decisions. Finally motivation relates to how you motivate yourself to achieve for the sake of achievement. All of those emotional competencies are not talents, but learned behaviours that must be worked on to be able to develop and achieve outstanding performance.
The importance of emotional intelligence as a manager means that it provides an insight into how to get the best out of people as you are then able to adapt approaches as you read others feelings and can react more accurately. Being more self-aware is the starting point for building and developing relationships with others, it also helps us show empathy towards others. This enables us to remain calm under pressure and be understanding when required, if we are able to manage ourselves. An awareness of emotional intelligence in the workplace enables us to make the most of the skill set we have within the team, recognise different levels of emotional intelligence in others and be aware that not everyone has the skill, so that we are able to adapt our approaches when required.
Conflict management is required by all management to make for an effective workplace. Conflict is defined in the Oxford dictionary as a serious disagreement or argument, typically a protracted one, a serious incompatibility between two or more opinions, principles or interests or to be incompatible with something or someone. There can be conflict between individuals, such as colleagues or team members and managers or between groups, such as teams or large groups of employees and management.
There are a number of different things that can cause conflict within the workplace, such as, dissatisfaction with the workload or set-backs, the lack of appreciation or perceived unfairness, misunderstandings due to poor sharing of information, external problems that affect the team or individuals, differences of opinion, people having different objectives, incompatible objectives, rivalry, bullying, harassment, and personality clashes between individuals. With all those factors playing a part in causing conflict it is important as a manager to be able to manage conflict quickly and effectively so that it doesn’t progress further, effecting work productivity.
When conflict develops it can be categorised into five different stages. Latent is the first stage where there is the potential for opposition or incompatibility within the team. This doesn’t always mean there will be conflict, but it is just identifying the potential. The latent stage develops into perceived; this is when people become aware that a conflict exists. Intentions, it is at the stage were people feel stress and anxiety as they think about their intentions and what others intentions are. In the fourth stage, the conflict escalates and people take action, this is called behaviour. The typical responses to conflict are fight, flight, freeze or face. Depending how they respond will affect the final stage which is outcomes. This stage is how the conflict is resolved such as resolution through consent, enforced resolution or stalemate. Conflict cannot be sustained and eventually the issue runs out of steam, the cost might not be worth further arguments and both sides will usually agree to find a workable compromise.
The Thomas-Kilmann Conflict Mode Instrument (TKI) is an assessment to measure a person’s behaviour in conflict situations. It is based on a person’s assertiveness and cooperativeness. Assertiveness is how much someone attempt to satisfy their own concerns whereas cooperativeness is how much someone attempts to satisfy others concerns. These relate to five different modes for responding to conflict which are; competing, accommodating, avoiding, collaborating, and compromising. Competing is someone who is assertive and uncooperative; this person pursues their own concerns but at others expense. Accommodating is an individual who is unassertive and cooperative meaning the individuals neglects their own concerns to satisfy others requirements. Avoiding is someone who is unassertive and uncooperative; this individual does not pursue anybody’s concerns and they fail to deal with conflict. Collaborating is an individual who is assertive and cooperative, they will work through disagreements to find a creative solution that suits everyone. This is similar to compromising, they are moderately assertive and cooperative; this means they address the issues in less depth than collaborating by splitting the difference, giving and receiving concessions. This is a handy tool for managers to use with their teams to find out how each individual deals with conflict; it enables managers to have open productive dialogue about conflict.
Conflict can be very damaging to an organisation, isolation and failing to communicate can lead to a decrease in motivation, morale and productivity. That is why managing conflict is extremely important, and managers need to be aware of what they can do to prevent conflict occurring but also how to take action when conflict has been identified. The aim as a manager is to promote a positive atmosphere to help minimise the adverse effects of conflict; this can be done by putting systems and procedures in place to establish formal procedures for grievances and disciplinary issues. As well as explaining the organisational and team plans or changes.
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