Stakeholder management

Introduction

The increased use of the term ‘stakeholder’ in business – used to describe any group or individual that has some, however small, vested interest or influence in an activity – is increasingly common across the construction industry. Stakeholders may be either internal or external to an organisation or business.

The importance of forming, managing and maintaining good working relationships with these groups is widely acknowledged and accepted. The reality is that this is frequently not performed well in construction as it’s not always seen as value adding – but if done properly it will add value to all stakeholders. A disgruntled or ignored stakeholder can easily derail the hard work of any construction related activity or project.

Stakeholder management

The art of stakeholder management is proactively building on shared synergies and heading off any major confrontations. The easiest way to do this is to communicate and consult at all stages so the stakeholders’ needs are understood and impacts are understood by all stakeholders.  

Successful stakeholder management should include the following steps

  1. Define and map stakeholder groups including identification of the lead stakeholder
  2. Analyse and prioritise these groups
  3. Research the key players in the most important groups
  4. Develop a management strategy
  5. Deploy the strategy by tactical actions
  6. Review the effectiveness of the strategy and improve any further actions

Stakeholder management manifests itself in many guises in quality professional’s day to day activities, including the need to meet the requirements of the international management standards of 9001 and 44001. ISO 9001 talks about the need to demonstrate the ability to meet customer requirements while ISO 44001 refers to understanding the needs and expectations of interested parties. Furthermore the Governments Policy paper ‘Construction 2015 – Strategy’ is littered with references to the integration of the industry through partnerships, engagement across sectors and with young people and supply chain as well as the establishment of improved procurement routes that encourages collaboration and innovation through early contractor involvement.

So if quality professionals want to really be at the heart of construction over the next two decades we need to grasp stakeholder management to help drive the benefits of quality and lean thinking in support of these aims.

Stakeholder management is usually the responsibility of the client during the planning and design stages of projects and is passed to the contractor during the construction phase, however in some cases the contractor needs to take hold of stakeholder management at an earlier stage. This will vary from project to project and client to client.  

Taking each of the six steps in more detail:-

1. Define and map stakeholders

As early as possible brainstorm the key players on a project to understand how they interact and influence the project and identify with a much granularity as possible.

See example summary Olympic Delivery Authority legacy diagram, below.

Initially, capture the interest and needs for each stakeholder (usually takes additional research to identify their actual requirements and to identify their interest/influence/importance) – this can be summarised in a long table.

Stakeholders

(group by types)

Interest Influence

(Power or impact on project)

Importance

(Priority)

Primary      
       
Secondary      
       
2. Analyse and prioritise these groups

Take the above matrix and group/score/rank accordingly.

3. Research the key players in the most important groups

Typically use a 4- or 6- box map to identify stakeholders with common positioning and requirements see 4-box map below

Those in quadrant D will generally require greater focus and should form the core of any stakeholder strategy.  

4. Develop a management strategy

Identify groups of stakeholders by position on map, common interests and common methods of management (a business next to your site and local residents may have the same position on the map – but you may develop different strategies to manage their needs and wants).

Develop management strategy for each stakeholder and/or stakeholder group at each stage of the project – summarise in a participation matrix, eg type of involvement v stage of project.

Identify management and technical tasks required to execute the strategy and incorporate into a programme (business or project level).

Link to governance process of the business or project so the strategy and its effectiveness are regularly reviewed.

5. Deploy the strategy

Deploying the strategy could include a variety of programmed/planned/responsive activities dependent on the stakeholder. Some will be more formalised, eg management of planning conditions through the local authority while others less so, eg town hall meetings with local residents. A number of different approaches are included in the examples section of this article.

6. Review the effectiveness of the strategy and improve any further actions

The strategy needs to be regularly reviewed to assess its effectiveness and identify any improvement actions. This should be done at regular intervals with the key stakeholders and form part of the stakeholder’s assurance processes, eg management reviews and audits.

Stakeholder management tools – some examples

There are numerous tools and techniques that can assist in managing stakeholders. The following key examples will now be explores:

  1. ISO 44001 Collaborative business relationship management systems
  2. Early contractor involvement – ECI
  3. Soft landings
  4. Collaborative planning
  5. Community engagement and considerate constructors
  6. Customer satisfaction
a. ISO 44001 Collaborative business relationships

ISO 44001 provides a strategic framework to establish and improve collaborative relationships with a view to ensuring they are effective, optimised and delivers enhanced benefits to all interested stakeholders. It shows how to eliminate the known pitfalls of communication by defining roles and responsibilities, and creating partnerships that add value to a business.

The standard outlines how collaborative business relationships can be built and maintained via three development phases (strategic, engagement and management). At its heart is the establishment of robust communication strategies and dynamic relationship management plans. Its benefits include:

  • Collaborating successfully with chosen partners
  • Creating a neutral platform for mutual benefit with business partners
  • Defining roles and responsibilities to improve decision making
  • Sharing costs, risk, resources and responsibilities
  • Providing better relationships that lead to quicker results

For more information, also see the ConSIG BoK section on BS11000

b. Early contractor involvement

Early contractor involvement (ECI) involves the creation of a contractor/design consultant team, which caters for the consideration of buildability issues earlier in the design process, leading to shorter construction periods and reduced impacts during construction.

The benefit of ECI is that it utilises contractors’ unique understanding of construction processes to optimise the design and delivery process by involving the contractor far earlier. With ECI, the contractor joins the team right at the start and is involved with planning, assessing buildability, cost estimating and value engineering. ECI is generally believed to be a significant factor for ensuring both programme and cost certainty for clients. When implemented at the early stages of a project the contractor, designer and client can work together to produce the most value efficient project for all stakeholders.

Construction works typically start earlier and there is more certainty over quality, cost and time.  Furthermore, with this process there is far less chance of last minute surprises.

Range of benefits gained by participating in ECI:

  • Early creation of delivery team
  • More scope for innovation
  • More flexibility and better value
  • Integrated and incentivised supply chain
  • Improved risk management with fair allocation of risks
  • Shorter construction periods and reduced impacts during construction
  • Maintaining a competitive and sustainable supply chain
  • Clear points of responsibility, no unnecessary layers of supervision
  • Selection of suppliers on the basis of best value
  • High quality design
  • Partnership approach and team ethos based on long-term relationships
  • Performance measurement with continual improvement targets
c. Soft landings

The soft landings framework was developed by BSRIA (Building Services Research and Information Association) in conjunction with an industry task group to be used alongside any asset procurement route. It focuses on ensuring customers and occupiers get the best out their asset by ensuring collaborative working at key stages throughout the project life cycle. It creates greater opportunities for greater interaction and understanding between the projects key stakeholders and focuses on five key stages of a project:

  1. Inception and briefing
  2. Design development and review
  3. Pre-handover
  4. Initial aftercare
  5. Aftercare in years one to three

Generic worksheets have been developed by BSRIA to support each stage and there is a strong emphasis in stakeholder engagement at all stages to develop key actions. There is mounting evidence that the approach when adopted leads to improved end user and customer satisfaction and an increased certainty that the asset requirements will be met, especially when the process is structured around key gateway review meetings that include all key stakeholders from across the assets life cycle.

Government Soft Landings was launched in early 2011 as a way to improve performance of buildings and to meet the requirements of those that use them. Again the government framework contains a framework to ensure all stakeholders engage at key stages of a project – however the emphasis in this document is less detailed than the BSRIA framework.

Quality professionals in the construction sector are increasingly looking towards these models as support mechanisms to sit alongside their project quality programmes, thus ensuring both implied and stated requirements are being met.

d. Collaborative planning

Collaborative planning addresses project variability in construction by seeking to make the project programme a reality by engaging key stakeholders on the project who have accountability for its delivery eg customer, designer, contractor, subcontractor and suppliers. It works within a structured process to take what you should do (formal programme) through a process to enable it to become what we actually do.

There are five key steps make up the collaborative planning. These are:

  1. Collaborative planning / milestone scheduling: should do
  2. Making ready: can do
  3. Weekly work plan: will do
  4. Daily management: doing / done
  5. Learning and continual improvement: improving

Collaborative planning is undertaken at various stages of the project:

  1. Before the project starts with the key stakeholders to generate the master target programme
  2. During the construction phase to generate the detailed day-by-day weekly look-ahead. This focuses on:
    1. Removing the previous weeks completed works
    2. Rescheduling the incomplete works
    3. Adding another week and scheduling future works
    4. The ‘can do’ tasks keep the long term planning alive and allows early warning of issues and the time to resolve them before the task is due to start
  3. To establish / compress detailed work sequence for specific areas of the project

It is recommended that collaborative planning takes a physical form in construction eg through the use of sticky notes on boards on the wall. Collaborative planning helps prepare everyone to work together and to work openly with everyone having full visibility of the project delivery plan.  It helps remove preconceived ideas about the project and its plan, and about the intentions of the project stakeholders. The team ethos that is promoted by using collaborative planning helps identify critical areas, enabling risks to be managed appropriately and also has the benefit that items of concern are discussed much earlier than in a traditional project-run environment. However, to be effective, collaborative planning must involve those who do the work, be kept up to date and reviewed regularly.

e. Community engagement

With the rise in the overall sustainability agenda, the construction sector is becoming increasingly committed to making a positive difference to the communities in which it operates. The industry is expected by society to be sensitive to the local communities’ social and economic needs and enhance these through benefits that any business activities bring. This is achieved through stakeholder engagement such as ‘town hall’ meetings, open days and letter drops etc. These help to develop and strengthen the industry’s links with the communities in which they operate. Most companies in the construction sector now establish open communications and good working relationships with their neighbours and adopt serious and proactive approaches to minimising any disruption on local communities.

In support of this the Considerate Constructors Scheme operates a voluntary Code of Considerate Practice, to which many construction companies register their sites. The Scheme looks to improve the image of construction and encourages best practice beyond statutory requirements. In its 16 years of operation the scheme has registered more than 60,000 construction sites and over 2000 construction companies. In 2012 the scheme made its 100,000th site visit and has a positive impact on the image of construction – most of which has been achieved through good robust stakeholder management techniques. 

f. Customer satisfaction

A key part of ISO 9001 is customer satisfaction. Since its inception in 1984 there have been many approaches to how this is measured from online surveys, visits, questionnaires and review meetings. However just talking about customer satisfaction is not good enough; construction companies have to demonstrate service at every step of the process, by every one of their people. 

The construction industry is rife with contractors touting a client-focused approach to building projects. Customers hear it in selection interviews, see it on websites and learn about it in project meetings. Yet, for many clients, the construction experience remains challenging and unnecessarily frustrating, with possibly the biggest criticism being that construction companies don’t really act upon the feedback.

This is changing as more and more construction companies are looking for innovative ways to make sure they not only measure their customers’ satisfaction but that they also manage the feedback proactively. Suffice to say that this can only be successful if there is structured approach to stakeholder management. This is also an area where KPIs are available across the sector against which a company can benchmark its performance.

To be successful a construction company needs to ensure it has a robust customer satisfaction methodology that provides both operational and strategic customer feedback. The tool should

  • Be used across its entire operation
  • Use feedback to influence innovation, continuous improvement and best practice
  • Capture customer opinion on a company’s strategic initiatives
  • Provide insight into customer opinion to influence public relations and marketing strategy
  • Provide management information, eg ‘Best Practice’ case studies, for use in work winning activities
  • Provide customer satisfaction data in line with recognised industry indices, eg BISRIA, BRE, Constructing Excellence etc.
  • Allow the business to manage its customer stakeholder relationships

Bibliography / sources/ Further Information Sources

UK government’s policy paper – 2025: Construction

The Institute for collaborative working

BSRIA Soft Landings Framework

Government soft landings framework

BSI – BS 11000 Collaborative Business Relationships

Highways Agency – collaborative planning

Considerate Constructor Scheme

Stakeholder circle – managing the right stakeholders

Community Planning Toolkit

Scottish National Standards for Community Engagement

 

Original article written by Ian Mills on behalf of the CQI Construction Special Interest Group and accepted for publication by the Competency Working Group.

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