The times they are a-changin'


Valense Ltd.


New trends such as the client-centric approach to project management have led to Stakeholder Management as a Knowledge Area in the A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. In this new area of knowledge, project managers are now faced with the additional expectation of enhancing stakeholder engagement in order to lead change initiatives through projects and programs. This new challenge calls for the development of knowledge and skills that were, in the past, perceived as the domain of organizational psychologists. What can we learn from organizational psychology, and how can we use this knowledge to better run projects and programs?

Stakeholder Management

The history of project management has been marked by authors suggesting that effective communication with all stakeholders is one of the key factors in determining the success or failure of a project (CII, 1997; Sanvido & et al., 1992; Thamhain, 1992). At the same time, it has long been recognized how difficult it can be to bring together stakeholders from different “thought worlds” (Dougherty, 1992). These statements, still from a recent past, only became more relevant as organizations and projects dealt with increasing levels of complexity (Cooke-Davies, 2004; Thiry & Deguire, 2004). However, most organizations and project environments still continue to adopt an “agency” oriented governance model built on shareholder rather than stakeholder interests. It is important to understand how this has evolved and its impact on the context of project management and more particularly that of stakeholder management when dealing with change.

For most of the 20th century, shareholders have been considered the rightful owners of an organization and the shareholder theory clearly states that a company's assets are their property (Clarke, 2004). In this context, the Board of Directors and the managers are seen as the shareholders’ agents and there are no legal obligations to any of the other stakeholders, except those defined by contract (Blair, 1995; Clarke, 2004). The theory widely promotes financial measures of value, control over agents, and pursuit of the profit motive. Success is evaluated in terms of financial return (Hatch, 1997).

Although in projects one can appreciate the importance of minimizing costs and ensuring alignment of the agents’ interests with those of the shareholders, the underlying hypothesis of the agency theory holds that individuals are motivated by self-interest, and therefore, agency-based structures must ensure a high level of control over these agents. This thought process is deeply rooted in McGregor's Theory X (1960). The prescribed management style is authoritarian, therefore; in this particular context, there is little or no purpose at all in building relationships and developing trust within the workplace.

As Thiry wrote in 2005, it was still clear to this date that the agency approach had been ruling corporate governance in the last decades of the 20th century and this has been widely supported by powerful government-based studies that distinguished relations with stakeholders from accountability towards the shareholders. Hence, such an environment strongly encouraged the gap or disconnect between the agents’ accountability to shareholders from that of the wider community.

Although, in recent years, there has been a gradual shift towards stakeholder interests (as demonstrated by the addition of the Stakeholder Management area of knowledge in the fifth edition of the PMBOK® Guide), the maximization of shareholder value often continues to be used as the key measure of a manager's success and is generally based almost exclusively on financial results, as in the past (Slater et al., 1998; Buckley and Tse, 1996).

This strong legacy from the shareholder approach has an important impact on how business in general, and, more particularly, projects are run. This often leads to exercising strict control over project management objectives like scope, quality, time, and cost in order to justify financial measures that lead to short-term results. Unfortunately, this has sometimes been to the detriment of other domains of knowledge that are being slowly recognized as equally and sometimes even more important to the success of projects.

The popular shareholder oriented approach to business has been counterproductive in regards of stakeholder engagement. The concept of engagement had initially come to the business world from early 1920 studies on “morale” or “willingness” of employees (or groups of people) to accomplish organizational objectives. This concept further developed during WWII research to assess battle readiness before combat and it is during the post war mass production years that the term “employee engagement” had grown in popularity to describe the individual worker's emotional attachment to the organization, colleagues, and job (Wikipedia, 2013).

Prior to the 80s, employers typically offered lifetime employment and, in return, expected loyalty. When global competition increased, organizations needed to be more flexible to survive and gradually changed the original understanding, or what has been referred to as the “psychological contract,” a term used in the 60s by Argyris (1957) to describe the employer/employee relationship. Plants were closed, businesses became global and wages and benefits were increasingly controlled to compete. Workers were laid off and jobs were frequently exported or outsourced to other countries where the cost of labor was less. Loyalty was no longer rewarded and those who still had a job were asked to do more with less. Within this context, workers tended to be less loyal and became increasingly demotivated (Welbourne, 2007). Research demonstrates that engaged employees tend to be both more loyal and more productive and so, the popularity of the concept of stakeholder engagement grew as a possible solution.

The concept of “stakeholder” was first used during the early 60s in an internal memorandum at the Stanford Research Institute where Ansoff and Stewart used stakeholder analysis in corporate planning. In 1977 a project was undertaken by the Wharton School in Pennsylvania to explore the implications of the stakeholder concept as a management theory (Freeman & Reed, 1983), but, it is only in 1984 that Freeman published his book Strategic Management: A Stakeholder Approach from which the idea seems to have gained in popularity. Here, stakeholders are defined as those groups without whose support the organization would cease to exist. In 1995, with a special edition of the Academy of Management Review devoted to the stakeholder theory, it started to gain momentum (Clarke, 2004). Since then, many definitions of stakeholder have surfaced and there is still debate about a definition, but both the corporate view and the project view identify stakeholders as actors that are significant for the successful realization of objectives. Guba and Lincoln (1989) also talk about stakeholders as being ‘groups at risk’ from the outcome.

In the 90s the trend in corporate governance started slowly shifting from the Agency approach (and Theory X) to the idea of “Stewardship,” sometimes considered an extension of McGregor's Theory Y. Here, commitment becomes a function of the rewards associated with what they have accomplished, hence, people will accept and even seek responsibility. In this new context, solving organizational problems and decision-making are not restricted activities, but rather distributed throughout the organizational pyramid. Stewardship maintains that executives and higher-level employees have higher motives than simple self- interests; hence, they are called “stewards” in comparison to “agents” (lower level employees). According to the theory, stewards are motivated by higher order needs; their relationships are longer-term and subjected to intrinsic factors rather than extrinsic; they identify with the organization, its values, and are committed to them. In their management style, they have a greater tendency toward using personal rather than institutional power (Davis & et al., 1997).

The basic assumptions of the Stewardship theory seem consistent with more recent studies on engagement that show about one- third (1/3) of employees are totally engaged and about one-third are totally disengaged. The “fully engaged” group is mainly composed of senior managers under 30 or over 50, with a college degree, employed in large corporations who earn $50K and more (Dale Carnegie, 2012; Towers Watson, 2012). This later group would correspond to those “stewards” described many years ago by the initial proponents of the theory.

Conclusions from research in the area highlight that with recruiting costs running approximately 1.5 times annual salary, the ability to engage and retain valuable employees has a significant impact on an organization's bottom line and it has become a matter of great preoccupation that only higher level employees seem “engaged” in the business. The question of the moment is: “how to ensure that managers interact with individuals to generate an engaged workforce? And if an organization fails to engage its workforce, how can it hope to engage its larger pool of stakeholders?”

In the 90s, in an effort to re-motivate disengaged employees, numerous studies on employee engagement and many different behavior and attitude questionnaires, surveys and scales to document engagement started surfacing. The onus of fostering and monitoring engagement gradually fell upon managers, and among the numerous recommendations to managers and leaders, three main conditions seem to surface in order to create, nurture, and maintain employee engagement (Welbourne, 2007). Leaders themselves need to be engaged; they need to clearly articulate how each role helps support the business strategy; and, leaders need to create an environment where jobs and employees are valued.

Along with the shift towards “stewardship,” more progressive companies were starting to use a wider range of performance indicators that took into account a wider stakeholder perspective. In the project management world, the “Balanced Scorecard” became popular (Kaplan & Norton, 1992, 2000), the EFQM Business Excellence Model (EFQM, 2000) was used in Europe and Baldridge Awards (early 1990s) in the US became measures of corporate success. However, in 1998, to many businesses, the stakeholder concept still remained little more than a public relations exercise (Clarke, 1998).

The gradual changes in the content of the PMBOK® Guide reflect the increasing preoccupation with the concept of stakeholder management as a whole and more particularly, stakeholder engagement. If we go back in time to the “Project Communication” knowledge areas, in the second edition of the PMBOK® Guide (PMI, 2000), only four processes are described: Communications Planning, Distribution of Information, Performance Reporting and Administrative Closure. None of these four processes mention stakeholders. In the third edition of the PMBOK® Guide (PMI, 2004), the fourth process (Administrative Closure) has now become: “Manage Stakeholders” and in the fourth edition (PMI, 2008) we see 5 processes among which, “Identify Stakeholders” is the first and “Manage Stakeholders” has transformed into “Manage Stakeholder Expectations.” As we well know, with the fifth edition of the PMBOK® Guide, we now have a new Knowledge Area devoted to Stakeholder Management (PMI, 2012). In 2014, it has become an unacceptable understatement to say that: “the Stakeholder concept has grown in popularity,” nevertheless, to this day, this still remains the less travelled road for many project managers.

The fifth edition of the PMBOK® Guide defines a project stakeholder as: “…an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project” (PMI, 2012 p.30). For many years, authors of various fields have argued that one of the obstacles to delivering value came from the mismatch between organizational objectives and stakeholder needs and expectations (Kirk, 2000; Thiry, 2004). Part of the discourse has been that over and above the project and project team, there is not just ‘one client’, but rather a ‘client system’ (Kubr, 1996; Neumann, 1994), represented by a number of individuals or parties who have different and, sometimes, conflicting interests. Because of this reality, although prominent and influential management and business schools have imposed the shareholder paradigm as the dominant perspective, in practice, managers have had no choice but to apply a stakeholder approach to their work.

Given these recent developments, one can wonder what the future holds in terms of governance and how it will affect our understanding of stakeholder management.

Thiry (2010) writes that in reaction to the stakeholder approach of governance, a few authors (O'Sullivan, 2000; Dallago, 2002) have argued that both shareholder and stakeholder perspective focus too much on facilitating the optimal utilization of existing productive resources and sharing of residual wealth but do not take into account processes by which resources are increased or transformed. Similar points are made by “Blue Ocean Strategy” and “Value Innovation” concepts that have been further developed by Kim and Mauborgne (2004a, 2004b). Concerning the mismatch between objectives and stakeholders needs and expectations, a number of sources have advocated for a much broader range of organizational results to be included such as economic factors, customer satisfaction, human resources development and sustainability, as well as innovation and learning variables (Porter, 2004 [1985]; EFQM, 2000).

An extension of the stakeholder approach is present in a value creation perspective that considers the stewardship theory of management. Since 1997, Davis et al. have put forth that, whereas the agency theory is focused on limiting potential costs, stewardship theory is focused on maximizing potential performance and that building long-term relationships and trust are central to the success of outcomes.

Innovation and Change

‘Innovation’ refers to a phenomenon where a new idea has been implemented into action (Taatila, 2005). As is stated in the introduction to the recently published, Managing Change in Organizations: A Practice Guide (Project Management Institute, 2013), programs to improve performance and implement innovations have typically not been implemented well, which is the reason that both the project management community and the change management community have devoted considerable efforts in addressing the issue. The guide proposes rigorous change management practices for a standardized organizational project management practice and illustrates how change management is an essential ingredient in using project management as a vehicle for delivering organizational strategy.

“Change management is a comprehensive, cyclic, and structured approach for transitioning individuals, groups, and organizations from a current state to a future state with intended business benefits.”

(PMI, 2013, p.7)

The issue of change is not a new one and some 20 years ago, the Harvard Business Review and Business Week were warning us about the increase and consistent need for organizational innovation in broad and sometimes scary statements such as that pursuing incremental improvement while rivals reinvented the industry was like fiddling while Rome burned to the ground (Hamel, G., 1996) and that what was likely to kill you in the new economy was not somebody doing something better, it was somebody doing something different (Bloomberg, M., 1999). It was also argued that both research and practice were at great loss in terms of what exactly needed to be done when implementing innovation and change as they had become the industrial religion of the late 20th century, yet there was still much confusion over how to make it happen.

Concurrent to this developing search for innovation, the last 20 years have also been marked by traditional businesses increasingly adopting a project approach and many maturing into Project Based Organizations (PBOs). These same organizations were receiving consideration as an emerging organizational form, both in the organizational management area (Gann & Salter 2000; Hobday, 2000) and in the project management domain (Gareis, 2004; Keegan and Turner 2002). Because PBOs conduct the majority of their activities as projects and/or privilege project over functional approaches, many organizations still did not understand how to use the project-based approach to effectively to create strategic advantage through innovation and change. As the application of project management became more popular, the issues of compartmentalization, typical of traditionally structured organizations, versus integration, typical of networked organizations, became a key issue when structuring a PBO.

In regards of these concurrent trends, the question of the moment became: “What are the advantages and disadvantages of creating a PBO over a more traditional structure when fostering innovation?” Another important factor was that it became rather well established that the most successful organizations were those that change and innovate to create value (Kim & Mauborgne, 1997). But, too often, grand declarations about innovation were followed by mediocre execution that produced anemic results, and innovation groups were quietly disbanded in cost-cutting drives (Moss-Kanter, 2006, p.73).
Several authors argued that change and innovation should not be seen as strategic goals, but rather as a means of reaching strategic benefits or goals, the basic assumption being that innovation is a means of increasing the probability of success: “It is about means, and not ends” (Zegans, 1997, 108 -109). These successes are, in turn, measured through results that directly or indirectly meet the organization's stakeholders’ needs, thus creating value.

Meeting “stakeholder needs” in order to create value became one of the essential pieces of the ‘Change and Innovation’ puzzle. In his book Diffusion of Successful Innovations, Rogers (2003) identifies the capability to spread inventions and new concepts within the organization together with the organization's approach to risk, in general, as important factors in innovation success. It has since been well documented and generally accepted that the success of leading innovative companies such as Cirque du Soleil, The Body Shop, Google, Apple, 3M, Virgin, eBay and Nokia is intimately related to their high risk taking and initiative culture, empowerment-based decision making strategies, and high tolerance to failures associated with a no-blame culture.

Nevertheless, in order to sustain innovation, PBOs need to be structured to foster creative synergy between vision and mission, strategy, portfolio, program and project management and be framed in a project-based governance approach; they also need to generate tangible value for the stakeholders. Rosabeth Moss-Kanter, who has conducted research and advised companies during what she terms: “four major waves of competitive challenges” (2006, p.74) since the 70s claims that successful innovation requires “flexible organizational structures, in which teams across functions or disciplines organize around solutions, [which] can facilitate good connections” (Moss-Kanter, 2006, p.74 & 82). In favor of such arguments, Jaruzelski et al. (2005) studied 1000 corporations and found that contrarily to popular belief, nonmonetary factors may be the most important drivers of a company's return on innovation, in particular, organizational processes that promote cross-functional collaboration that in turn facilitate stakeholder management.

Various studies in domains as varied as business, organizational sciences, anthropology, and biology concur to say that ongoing change and innovation are directly correlated to the capacity for social learning and the quality of social networks. In the project management field, the quality of social networks is managed within the Stakeholder Management Chapter and it does not come as a surprise that one of the critical success factors for change management as a discipline is “stakeholder collaboration, empowerment and engagement” (PMI, 2013, p.34). Innovation and change are so very dependent on stakeholder engagement that the Change Management Guide clearly spells out: “Perform change with rather than to people” (PMI, 2013 p.33) and continues by stating that buy-in does not occur through careful solution research and rational selection, but only if stakeholders are part of this research and selection. Ensuring that the change process incorporates these involvement activities is a crucial factor in change management success.

Over and beyond facilitating the acceptance for change, good stakeholder management can promote the essential cross-functional collaboration that fosters the appropriate learning environment for the apetite for change to develop and the later acceptance of the implemented changes. In this area, it may be useful for business in general and for project managers to turn to other sciences to enlighten us on the processes through which innovation is most likely to happen and be succesful. Many studies in biology and anthropology demonstrate that innovation in general, and organizational innovation in particular, are highly dependent on organizational and social structures together with the overall approach to risk as reflected in decision making strategies and finally the capabilty to focus on benefits and solutions, across functional boundaries (Van Schaik, 2006; Diamond, 1997). These are findings that can readily be kept in mind when managing stakeholders towards innovation and change.

In effect, research shows us that we have long left the den of the lonely creative “artist” as more and more studies demonstrate that change and innovation rate is increased where there are strong social networks (Jaruzelski & al. 2005; Taatila, 2005) and even among artists, most movements of change and innovations were the product of group interactions such as surrealism, impressionism, cubism, etc. hence, reinforcing the social network theory. It has now become widely accepted that when ideas meet and information comes together, you bring about both change and innovations to market smarter and faster and it would seem that the diversity of ideas and opinions generated through stakeholder engagement lead to higher quality solutions.

An interesting example is Harley-Davidson, Inc. Management at Harley-Davidson has been recognized worldwide for its successful use of progressive, cutting-edge management techniques (Certo, 2003). This company has long developed its use of cross-functional teams to implement change and to design new products. Here, representatives from engineering, purchasing, manufacturing, and marketing have always had some influence on the future direction of new products. In order to achieve this, management has been committed to cross-functional teams and these team members work together daily and are totally dedicated to the new product development process on a full-time basis.

We have therefore seen that innovation, for most companies, depends upon the individual and collective expertise of employees and it seems to have become more important for an organization to be cross-functionally excellent than functionally excellent. In addition to formal planning at the business level, best-practice companies are using cross enterprise initiatives on major issues in order to challenge assumptions and open up the organization to new thinking. This further enhances change and innovation as organizations are, for example, able to match their technological developments with complementary expertise in other areas of their business, such as manufacturing, distribution, human resources, marketing, and customer relationships.

Stakeholder Engagement in Change

As we have seen above, historically, the concept of stakeholder engagement has made its way to the project management field through the more familiar route and knowledge area of communication. The fifth edition of the PMBOK® Guide goes beyond communication and states that project managers must, “… actively work to ensure an appropriate level of engagement of stakeholders in the decision making and activities of the project” (PMI, 2012, p. 469). The question of the day is not that stakeholder engagement is important, this is now a documented fact, but rather: “Given that it is so important, how does one foster it to facilitate change?”

The idea of stakeholder engagement is not new and in the past, many organizations had focused on building customer and employee satisfaction, trust, and loyalty. To these organizations, although not easily measured, engagement was managed much like a tangible asset. The underlying thought was that increased customer and employee satisfaction would lead to reduced turnover and training costs, positive word of mouth, higher premiums for services and greater share value which all lead to higher profits and faster growth.

The word ‘engagement’ refers to more than simple communication (as is now reflected in the fifth edition of the PMBOK® Guide and in the Change Management Guide), it refers to the “emotional bond” or “attachment” internal and external stakeholders develop during repeated, ongoing (preferably positive) interactions within a business. This bond is defined over longer time periods by specific behaviors and attitudes. In some instances the concept can be enlarged to deeper emotional levels to encompass descriptive narratives such as being emotionally connected, passionate and aligned to the business values and beliefs.

It is not surprising that in the study done on 1500 employees in 2012, Dale Carnegie found that there are three key drivers to engagement in the workforce, namely: the relationship with the immediate supervisor; the belief in senior leadership; and, pride in working for the company. Given that a “caring manager” seems to be one of the key elements, it has become a real concern that supervisors develop a range of soft skills showing that they care about employees’ personal lives; take an interest in them as people; care about how they feel; and support their health and well-being. Much rests on a manager's ability to build strong individual relationships as well as strong team interactions and lead in a “person-centered” way in order to foster the right environment for a level of engagement that will lead to either innovation or acceptance of change.

In accordance with the more mechanistic approach to communication (sender-receiver and encoding-decoding), Blair (1995) suggested that, to ensure efficient and effective communication, one must start with the three basic considerations of making your message understood, receiving/understanding the intended message and exerting some control over the flow of the communication. In this framework, it is felt that communication is best achieved through simple planning and control. However, the past two decades have witnessed a great deal of scholarly attention to transformational leadership behavior and it is currently the most widely accepted leadership paradigm (Tejeda, 2001), more particularly since creating stakeholder engagement has become an increasingly linked to creating value in organizations. With transformational leadership, authors take us far beyond our older concepts of communication, suggesting that “emotions” are more important than the “information dissemination” that was often the focus of communication skills of the past (Rubin & al., 2005; Ashkanasy and Tse, 2000). For these authors, leaders must be insightful in order to understand how different stakeholders might feel and anticipate their wants and needs. What was traditionally understood as “the best” communication skills of the past such as clarity, logical formulation, and a professional delivery of information may not be fitting to create stakeholder excitement and enthusiasm (Bass, 1990).

The Towers Watson (2012) study that surveyed over 30,000 workers revealed the same results as the Dale Carnegie study in terms of number of highly engaged (1/3) and totally disengaged (1/3) individuals in the workplace, the other (1/3) being neutral. These recent results and their demographics, show an incredible similarity to what had been suggested by the stewardship theory developed many years earlier. Unfortunately, these results also outline the fact that stewards still seem at a loss or are still having a great deal of difficulty engaging lower level employees. On top of this important role that managers might have in the area of engagement, the studies also suggest that in order to enhance employee engagement, the organizations need to fill two important gaps, which are: 1) enabling workers with internal support, resources, and tools, and 2) creating an environment that is energizing to work in because it promotes physical, emotional and social well-being. The conclusions point to the fact that when engagement declines, companies become vulnerable not only to lower productivity, but also to poor customer service, higher absenteeism, and turnover. Nonetheless, leader characteristics still remained the top drivers to engagement and, more particularly, when they are effective at growing the business, show sincere interest in employees’ well-being, behave consistently with the organization's core values, and earn employees’ trust and confidence.

Another area of stakeholder engagement that has been extensively studied and can come in useful when managing stakeholder expectations is “customer engagement.” This area of research has come to us via Customer Relationship Management (CRM), a trend that became popular in the late 1990s. CRM marked the first attempts to move away from one-way mass marketing to a two-way dialogue with customers and more recently, with the development of new technologies, the power of consumers in this dialogue has grown considerably. They can seek advice from other consumers, are more informed, and can express themselves. Organizations and brands have little or no influence over parts of the larger community of stakeholders’ conversation. Although the focus of CRM has always been involvement and interaction, engagement seems to differ in terms of the level of intimacy and influence within the stakeholder relationship. The depth of this relationship can only evolve through the creation of true two-way conversations. It is no longer sufficient for customers to simply react to company news, views, and bulletins; they must now be able to proactively engage with a brand (Myles, 2011). Similarly, it is no longer sufficient for employees to be informed about the organization's mission, vision and strategic goals. Employees need to feel that this is a two-way conversation and that they are part of the decision-making process.

This move from CRM to customer engagement (CE) was prompted by the fact that research has shown that high customer satisfaction alone was not sufficient to guarantee the customer's business. Results to the order of 60% – 80% of customers who defect to a competitor said they were satisfied or very satisfied just before defecting. It has now become accepted that an “engaged” relationship is probably the only guarantee for a return on you or your clients’ objectives (Eisenberg et al., 2006). When results of similar research are exported to employee behaviors, it is possible that a defecting employee might be satisfied with their present job.

Whether it be employee focused or customer focused, the main difference between what was traditionally understood as communication and the ongoing shift towards engagement seems marked by more customized individual interactions that prompt stakeholders to act on the content. The participation in product development, customer services and other aspects of the organization's experience are of utmost importance as well as moving away from a top-down formal interaction to a continuing, dialogic, decentralized, and personalized experience initiated and led by either party.

As we can see from the numerous studies, one of the key factors in stakeholder engagement is the ability to develop a trusting relationship with employees and customers. This is an area that needs considerable attention when it comes to project management (and many other professional circles) that tends to develop its “own language.” When other stakeholders are not trained in project management lingo, this can actually create distrust. One can no longer minimize the importance of relationships with stakeholders at large and the necessity of spending additional time with individuals thoroughly discussing the issues and providing guidance. This has not been made easier in the last decade with several important factors affecting the context of communication, such as the progressive popularity of distance work, with individuals and teams that are no longer co-located, remote clients, and other stakeholders with whom communication might remain on a virtual level for the length of the project or program.

For the last 10 years, the overall message to project managers has been clear: “Communicate, communicate, communicate…” However, to this day, most project management trainings still provide little knowledge on the subject of communication, leaving many project managers at a loss when it comes to creating and sustaining meaningful communications with a diverse group of stakeholders. Although human communication has been studied widely in the fields of business, anthropology, sociology, and psychology, it remains an ongoing issue for which very few tools have been developed to help managers communicate (Mead, 2001). It is all very well to tell project managers to engage with stakeholders, but how they demonstrate that they care and how they create “meaningful two-way communications” still remains a mystery in some environments.

Answers to some of these questions have been relatively well documented in the fields of psychology and social sciences. These can provide valuable guidance in terms of how one develops meaningful relationships at different levels and in different contexts, but more often than not, the knowledge is not always user-friendly for the non-initiated, who are themselves confronted with a “field specific lingo.”


In a previous article (Deguire, 2013), I have suggested a number of interesting short-cuts to develop meaningful stakeholder relationships that are more pertinent to the project management field such as developing transformational leadership behavior, which is currently the most widely accepted leadership paradigm (Tejeda, 2001) and most probably the best suited to create and develop stakeholder engagement. According to Rubin et al. (2005), transformational leadership behaviors represent the most active/effective form of leadership. Here, contrarily to the mechanistic approach, managers are closely engaged with followers, motivating them to perform beyond their transactional agreements and Ashkanasy and Tse (2000) describe transformational leadership behavior as the, management of leader and follower emotion. For these authors, emotional abilities are critical in accomplishing this task: “Transformational leaders are sensitive to followers’ needs […] they show empathy to followers, making them understand how others feel” (p.232).

Bass (1990) went so far as to argue that transformational leaders “meet the emotional needs of each employee” (p.21) and a number of authors have since added that creation of follower excitement and enthusiasm stems from appraisal of followers’ authentic feelings (George, 2000). Creating stakeholder engagement is about more than buy-in, it is about excitement and enthusiasm, terms that are not readily used or exported to the business milieu. As a prerequisite for meeting followers’ emotional needs, one needs to have an accurate assessment of how followers feel, a competency often seen (in the frameworks of the past) as reserved to psychologists, close friends, or therapists. Unfortunately, many managers may still feel uncomfortable and incompetent about taking on such roles both in their private and professional lives, even more so, in today's politically correct environment. It is the role of the organization through its governance model to create a culture that promotes these values if it wants to create and nurture an environment conducive to change and innovation.

According to the literature on emotional intelligence, authentic feelings are primarily communicated through facial expressions and nonverbal behavior (Ekman & Friesen, 1974; Mayer & al., 2001). For Rubin et al. (2005), a leader's ability to accurately recognize emotions in followers involves the ability to accurately decode others’ expressions of emotions communicated through their nonverbal communications (i.e., the face, body, and voice). Research findings have demonstrated that emotion recognition is the most reliably validated component of emotional intelligence and that it is linked to a variety of positive organizational outcomes (Elfenbein & al., 2002). Managerial derailment is heavily influenced by a manager's inability to understand others’ perspectives, a limitation that makes them insensitive to others (Lombardo & al., 1987). Mayer and Gavin (2005) take this concept even further when investigating trust relationships in the workplace and provide evidence of how trust also affects performance. These authors point to the fact that managers who have developed these abilities engage their people more, which results in a higher capability to focus attention and better business results. Organizations need to recognize the importance of the manager's role in employee engagement and how difficult it is to manage change when one-third of the workforce is totally disengaged, not to mention the negative effect on the overall group of stakeholders.

As life experience teaches most of us, meaningful relationships usually take time to develop and are the product of a number of communications, of which, many have simply drifted from light superficial to more meaningful content. In business, the preoccupation for efficiency together with time constraints have made us consider this kind of unplanned chatter as wasteful.


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© 2014, Manon Deguire, MSc, PMP
Originally published as a part of the 2014 PMI Global Congress Proceedings – Dubai, UAE



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