Tag Archives: R Edward Freeman

The Mother of All Stakeholders

How big do stakeholders get?

I was personally pleased when I recently worked with a major multi-national organization that puts sustainability right at the heart of everything it does – including new projects and programmes.

The question is, how to fit it into your projects, if it is not baked into everything that your organization does? As project managers, we have choices and I’d like to highlight four approaches to building sustainability into your projects.

Choice 1: The Financial Approach

You can build sustainability into your projects by ensuring that that your investment appraisal and business case are predicated around whole -life costs and returns or, if this is not possible, for any reason, at least look at the longest time horizon possibly. An example is schools building and renovation: why do so many public authorities insist on a payback on energy efficiency investments that is substantially shorter than the planned lifetime of the school and the assets that might be installed?

Choice 2: The Specification Approach

The second approach sees sustainability as an element of the quality of your project, to be explicitly balanced against time and budgetary objectives. The problem with this approach comes when the organization chooses to prioritise time or cost, leaving sustainability as the poor relation that gets abandoned. This is an application of the right principle, but puts sustainability at the back of the queue.

Choice 3: The Risk Approach

The commonest approach I have seen is a deeply pessimistic one. Sustainability and environmental concerns make their only appearance in projects, via the risk register. Whilst proactive risk management is recognized by most PMs as an essential component of planning and control, this approach effectively relegates sustainability to an after-thought.

Choice 4: The Stakeholder Approach

My preferred approach is to treat Mother Nature as a stakeholder in your projects. The stakeholder revolution that began in the 1930s with E Merrick Dodd and matured in the 1980s with R Edward Freeman’s Strategic Management: A Stakeholder Approach, which put people on an equal footing with profit on organisation’s agendas.

I’d like to see that go a step further, and John Elkington’s concept of ‘the triple bottom line’ seems to me the best framework. Elkington saw three equally important bottom line measures: the profit account, the people account and the planet account.

Let’s start to consider our planet as a real stakeholder in everything we do as PMs. This does not mean it should come first, but it would require us to take full account of its needs throughout our projects, from definition to decommissioning. Only when you do this will you be sure you are thinking through all aspects of your project’s viability and the wellbeing of your other, human, stakeholders.


This article was first published on the APM (Association for Project Management) website on 1 July, 2014.

Dr Mike Clayton is the author of The Influence Agenda, published by Palgrave Macmillan – www.theinfluenceagenda.co.uk

The Influence Agenda by Mike Clayton

The Origin of Stakeholders

A stakeholder is anyone who has any interest in what you are doing, with the word ‘anyone’ inviting us to draw our net as widely as possible.  And any interest means that they can be interested in what you are doing, how you are doing it, or in its outcome.

Some of you will prefer an alternative definition, which is equally wide, and equally true, a stakeholder is:

‘anyone who can ruin your day’

This word stakeholder has, in the author’s professional life, moved from being a jargon-word that has been little understood outside narrow areas of business to becoming a commonplace. So where does it come from?

The Influence Agenda

Preparing for my new book*, I researched this extensively, resulting in a thousand word essay at the start of the book.  I summarized my research with a simple diagram. Sadly, I couldn’t put a colour version in the book, so happily, I can share it with you here.

The Evolution of Stakeholder Engagement

From Left to Right

  1. Early 18th Century
    Stakeholding exclusively part of gambling culture
  2. Late 19th  Century
    Primacy of the shareholder
  3. 1940s
    Managers as trustees, balancing multiple communities
  4. Early 1960s
    ‘Stakeholder’ identified as a concept
  5. Late 1960s
    Ansoff incorporates stakeholding into corporate strategy
  6. Early 1980s
    Freeman writes ‘Strategic Management: A Stakeholder Approach
  7. Mid 1990s
    Tony Blair describes a Stakeholder Economy
  8. 2010s
    Stakeholder Engagement starts to emerge as a managerial and professional discipline

Orgin of Stakeholders PosterDownload The Origin of Stakeholders poster.

 

The drawing starts with the first appearance of the word, recorded by The Oxford English Dictionary as being in 1708, and meaning the holder of a wager.  A stake is ‘that which is placed at hazard’ although OED is uncertain where that usage of stake comes from.

The OED, incorrectly, I now believe, credits the first use of stakeholder in the business sense that interests us, to Igor Ansoff in 1965.  I attribute it, two years earlier, to the Stanford Research Institute, as a play on the words shareholder and stockholder. The word gained most of its power in the mid 1990’s when British Prime Minister Tony Blair described the UK as a ‘Stakeholder Economy.’

I have written before (in The Origins of Project Management) about the wonderful tool that is the Google Ngram Viewer.  Here are some annotated print-outs that did not find a home in the book, but which make interesting references and helped to inform my essay.

For those not familiar with Ngrams, they plot the frequency of your chosen word from a vast selection of published books that Google has scanned and rendered into searchable text. You can have hours of fun choosing words, sources and time windows, to research the rise and fall in popularity of your favourite words or ideas.

Ngrams - Stkeholder Mgt & EngtNgram - Stakeholder economy Ngrams - Stakeholder* The Influence Agenda: A Systematic Approach to Aligning Stakeholders in Times of Change is published by Palgrave Macmillan next week, on 22 April 2014. It is available from all good booksellers, including Amazon UK and Amazon.com.

You can learn more about the book and its contents, read extracts, scan the full contents list, and download resources at: theinfluenceagenda.co.uk.

The Influence Agenda by Mike Clayton