Business is a game of chess

By Nilooka Dissanayake
You may not be surprised to learn that some of the skills needed to succeed in business are learnt during childhood. Think of the 10-year-old who goes to her mother and asks for something and gets a refusal. What does she do next? Go to her father of course; or to grandparents. Woe unto the parents and grandparents who do not figure out this endless game.

Now what does this have to do with business? Ah, what the little kid does in all her innocence is actually a very effective management tool, especially for managing the many forces in your business environment that we discussed last week. The potent tool is most boringly described as Stakeholder Management.

And, when I first came across it, I was placed in a most advantageous position to see it at work. I had taken on the double challenge of a management consultancy project for my MBA project. On one hand, I had to help a public sector art gallery in Scotland deal with declining state support and adapting itself to face competitive forces and revenue generation. On the other hand, I had to use conventional management tools generally used in the private sector to evaluate their applicability to the public sector for the thesis.

At the time Tony Blair was on his way into power with New Politics and an aversion to subsidies. The competitive forces were real. Galleries in UK are mostly sort after by the oldies and students who have not much by way of disposable incomes. And these services have been always given free. The galleries had to earn money to survive. And they could not charge the majority of their visitors. The gallery curators had to manage with meagre funds and grow their business or perish.

Besides the money issue, there was the need for a paradigm shift. That is, a need to change the way of thinking, looking at and dealing with the world. The curator and her staff had to "get real" and jump in the deep sea with hardly any training. Staff members were nervous and resentful.

My task was interesting. My MBA electives of Organisational Change and Development and Strategic Management helped me sleep at night - when I had the time for sleep that is. I am an art lover and a fanatic for galleries. And my client was so genuinely trying her best to bring about a change.

Among the management tools I tested on this assignment was Stakeholder Management. Actually, it is nothing more than analyzing the people who have a "stake" in your business and playing them against each other to achieve your organizational objectives. This of course is my usual irreverent interpretation.

Firstly, my client identified her stakeholders: the visitors, herself and her staff, the officials in the public sector, the regional politicians, trustees of the gallery, the Scottish Museums Council, shop owners in the area and so on.

Secondly, she carefully analysed the motivations of each of the separate shareholders in getting involved with the organization. What did they want? What are they willing to do?

Thirdly, she evaluated the extent of their power and the impact of that power individually and collectively.

There were many forces at play. The officials wanted increased admittance fees. They did not understand that visitors could not afford to pay. Their staying away because of high charges will defeat the object for which the gallery was created. The trustees were paranoid at this idea. Staff members wanted facilities and increments. My client wanted to buy more paintings for the collection and provide better quality services. They also wanted an expansion which will enable them to rent out the gallery for functions and opening up a whole new revenue stream. Politicians wanted news and to score points against each other. The Museum Council was stressing upon professional management and serving visitors and not just cash and profits.

We wanted to serve and increase the number of visitors, manage at least to break even and provide quality facilities. We did not want to increase prices. We had already defined our strategic goals and this exercise was to help us determine how to go ahead and achieve our objectives without getting caught in the whirlwinds and undercurrents.

So, we categorized stakeholders who were having high and low impacts as well as those who are with and against the achieving of objectives. The stakes were very high for most of those who were involved.

We argued that the visitors did not have a big say by themselves; nor did the neighbours. The curator and staff were also in agreement against raising prices. So were the trustees. But, trustees had influence that all others lacked. While tapping something like the "old boy networks" my client felt that influential neighbours and some of the key politicos can be brought to our side. Which politician would protest against what is good for the masses? So we were really marshalling forces to prevent a blanket price increase and still achieve sufficient revenue.

The result of the stakeholder analyses was to determine the courses of action we would take - including lobbying and persuasion, marshalling forces into petitioning, etc. - to go ahead with the developed strategies. And the situation was eternally changing. Our stakeholders were not always acting in the ways we thought they would. New developments kept cropping up all the way to the trustee meetings and until the policy decision was made to allow us more operational freedom to take entrepreneurial risks rather than raising prices.

I had been a consultant long before this experience. But, this assignment opened my eyes to the more human, psychological and exiting forces at play in the business environment. It was an experiment approved by the Museums Council where I was without any risk of personal loss. Of course, my reputation as a consultant and my conscience were at risk and so was the future of the dear little art gallery.

Things worked out eventually, but I was back in Sri Lanka by then and was not there to share the triumphs. My client still keeps in touch.

This is the story of my first experience in stakeholder management. Today, as a businessperson I do it all the time. So do all of you although we do not call it by this name. If you have not thought about this versatile tool, do think it over. I leave you to use your imagination to see how individuals and politicians etc. use this same concept everyday to further their objectives.

We welcome your comments. You can reach us on or call on 074-304112.


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