Stakeholder Engagement and Management

Because the Bid or Proposal Manager is the primary source of communication, the first thing he or she must do is decide what needs to be communicated and to whom. This principle is embodied in stakeholder management, in which a great deal of time is spent seeking to understand who needs to have what information and when.

Introduction

The Bid or Proposal Manager must lead the stakeholder community—a unique audience that’s often separate from the team and to whom delegation is rarely appropriate. When dealing with stakeholders, influence and negotiation are important. If the stakeholders are particularly senior or vital to the achievement of objectives, the Bid or Proposal Manager will inevitably need the support of a sponsor.

Whether delegating work to a team or influencing stakeholders, conflict will inevitably arise in some form during the proposal lifecycle. The Bid or Proposal Manager will need to have conflict management skills no matter how well-honed his or her other interpersonal skills may be.

In most proposal development situations, the Bid or Proposal Manager is the source of information and the receiver is a stakeholder. This is why stakeholder management places so much emphasis on understanding stakeholders. The Bid or Proposal Manager must understand the stakeholders to be able to encode messages correctly and use appropriate channels to maximize the effectiveness of any communication.

Without effective communication between the proposal team and its stakeholders, there’s little chance that the proposal development process will succeed. This is why the communication plan is such an important document.

Best Practices

1. Influence behaviors and activities that support the team’s objectives.

Often, Bid or Proposal Managers are in a position where direct authority is inappropriate or impossible. In these situations, the Bid or Proposal Manager must seek to affect the behaviors and actions of others through influence rather than authority. The goals of influencing are to persuade stakeholders to:

  • Support the objectives
  • Support the achievement of the objectives

While influencing is a useful skill to back up authority, it’s an essential skill when the Bid or Proposal Manager doesn’t have the necessary authority.

Stakeholder management identifies people the Bid or Proposal Manager needs to influence. This influence may be required to overcome objections, secure resources, or even to help influence others.

Models for the nature and practice of influencing have many common features and emphasize two common themes:

  • Understand the people you wish to influence
  • Understand what you can do for them in return (reciprocity)

To achieve this, successful influencers will:

  • Understand their own behavior and how it relates to others
  • Have a clear vision of what the work involves and how it affects others
  • Communicate effectively using all appropriate means
  • Negotiate to find mutually acceptable solutions to issues
  • Understand context, including cultural, social, and political factors
  • Behave ethically at all times

A Bid or Proposal Manager’s ability to influence often is based on different sources of power as described by Patrick Montana and Bruce Charnov. Managers must understand their sources and levels of power so they can be used constructively and not abused.

1.1. Montana and Charnov’s Seven Forms of Power

Montana and Charnov outlined seven forms of power involved in leadership and influencing in an organizational setting:

Legitimate power is gained through position or rank in the organization. A Bid or Proposal Manager has legitimate power with respect to the management and contributions of teams working in proposal development. Keep in mind that internal resources (and power) may be shared with line managers in a matrix organization. When necessary, a manager may have to call on the support of a sponsor to provide a higher level of legitimate power.

Reward power arises from administrative control over rewards. Most Bid or Proposal Managers have limited reward power with regard to internal resources, because this is primarily delegated to the line managers. However, depending on the payment methods in a contract, a Bid or Proposal Manager may have significant reward power over external resources.

Coercive power is concerned with a manager’s ability to punish. This is the opposite of reward power and is usually affected by the same factors in the proposal management context.

Expert power is attained through a Bid or Proposal Manager’s personal knowledge, skills, and abilities. Someone who has a strong reputation for good bid or proposal management will have expert power. There’s often much debate about whether Bid or Proposal Managers need to be knowledgeable and skilled in the project’s primary domain (e.g., whether the manager of an IT proposal needs to be an ex-programmer or former business analyst). If Bid or Proposal Managers don’t have a technical background in the work of the project, they must rely on their profile as an expert Bid or Proposal Manager to achieve expert power.

Charisma power is a personal characteristic that depends on the subjective views of the team being led or the stakeholders being influenced. In a complex proposal environment, the Bid or Proposal Manager is more likely to be detached from expert power and must use charisma to promote the vision for the work.

Referent power is gained through association. When Bid or Proposal Managers draw on the support of a powerful sponsor, they are using referent power.

Information power is gained by anyone who has information that others need to do their work. This must be used with caution as it implies holding back information to gain power, which rarely is in the interest of effective proposal management.

If influencing is successful, it will change the attitudes and behaviors of others. The result will be acceptance of and support for the objectives of the work.

1.2. Cialdini’s Six Principles of Influence

Robert Cialdini set out six principles of influence in his book Influence: The Psychology of Persuasion. He identified these principles by observing people who work in in sales, advertising, fundraising, and other similar careers to see how experienced professionals influenced their target audience.

Stakeholder Engagement Figure 1

Figure 1. Cialdini’s Six Principles of Influence. The Bid or Proposal Manager usually doesn’t have authority over stakeholders and must use influencing skills to gain support for the work.

Cialdini’s principles of influence, which follow, are not limited to stakeholder management.

  • Reciprocity. To use a more colloquial term, “give and take” is a powerful human motivator. We don’t like being indebted to others, and we generally treat others as they treat us. Someone is more likely to give you something you want if you have given them something in return. If a proposal could benefit a stakeholder, he or she is more likely to support it. In this situation, the stakeholder management plan must concentrate on explaining the benefits to relevant stakeholders.
  • Commitment. People like consistency. Once they take a position, they tend to stick with it, even if this means shortcutting new information as a previous decision is recalled. The moral for the Bid or Proposal Manager here is to seek support early.
  • Social proof. This could be negatively expressed as peer pressure. It doesn’t have to be explicit pressure because people are naturally influenced by those around them. This is another reason to start positive stakeholder communication as early as possible to build momentum.
  • Liking. People are more likely to be influenced by people they know or like. This doesn’t mean a Bid or Proposal Manager has to be universally liked to influence stakeholders, but it does mean that a Bid or Proposal Manager can carefully select how messages are conveyed. Supportive stakeholders may be more willing to help others if there’s a good existing relationship.
  • Authority. This isn’t a reference to line authority; the fact is, we respect authority in others (e.g., doctors or police officers). To gain authority, a Bid or Proposal Manager must have a clear vision for the work’s outputs and benefits and how to achieve them. A Bid or Proposal Manager who can speak authoritatively will find it easier to influence others.
  • Scarcity. Things in short supply often are more attractive; this can apply to the scarcity of opportunities rather than objects. For example, if a proposal isn’t prepared now, the opportunity or benefits may disappear.

One downside of Cialdini’s universal truths is that they can sound manipulative or aggressive. Although it’s important to be able to influence others, it’s also important to always act professionally and ethically.

1.3 Cohen and Bradford’s Influence Model

Many of Cialdini’s truths are embodied in the model that Allan Cohen and David Bradford created for their book, Influence Without Authority. Their model comprises six steps:

Stakeholder Engagement Figure 2
Figure 2. Cohen and Bradford’s Influence Model. The model has six steps that can help the Bid or Proposal Manager influence key stakeholders.

 

The first step is to assume that all parties are potential allies. Although this may be a reasonable assumption in some contexts, a Bid or Proposal Manager must assess each stakeholder. It can be useful to assume that an unsupportive or openly antagonistic stakeholder can be turned into a supporter with the right information.

Secondly, the model advises people to clarify their goals and objectives. This is fundamental to proposal management—it’s what functions such as requirements management and solutions development are all about.

The third step harks back to stakeholder management and to stakeholder analysis in particular. The Bid or Proposal Manager needs to understand how stakeholders developed their attitude toward the work and then act on that understanding.

Currency is what someone values. For some, currency may literally be financial compensation for providing a service; others may value the experience gained from being involved in the work. Work to understand your stakeholders’ currencies, as well as your own, keeping in mind that currencies are very personal. Even if something doesn’t seem valuable to you, don’t underestimate its value to others.

The next step is about knowing the person you wish to influence and developing a relationship of mutual trust.

And the final step uses what many believe is the most powerful of Cialdini’s six universal truths—reciprocity. Ultimately, most stakeholders are influenced to support or oppose a project or program based on how it will affect them. If someone’s support is needed, they typically hope to receive something in return.

This model faces a common problem in any discussion about influencing—it can sound manipulative. Again, while it’s important to be able to influence others, it’s also important to act professionally and ethically.

2. Use negotiation to resolve differences.

Negotiation is a collective term for various mechanisms that seek to resolve differences between individuals, groups, or companies. Its goals are to:

  • Find solutions to issues involving two or more parties
  • Develop beneficial relationships between two or more parties

The principles of negotiation are used in many different contexts. Two obvious applications are in conflict management and procurement. These two examples illustrate the breadth of situations where negotiation skills need to be applied. Addressing personal conflict often involves emotional and cultural issues, whereas procurement negotiation is usually about contractual terms and conditions.

Whatever the context, there are common factors that exemplify a good negotiator. They include:

  • The ability to describe common goals and boundaries
  • Emotional control
  • Equal treatment of all parties
  • Good listening and communication skills
  • Thorough knowledge of bargaining tactics
  • An ability to close a negotiation in a way that secures the outcome

A negotiation is often described as having one of two flavors: competitive or collaborative.

Competitive negotiation is about getting the best deal for one party, regardless of the needs and interests of the other. This can easily become a battle where the winner takes all. Although you should avoid competitive negotiation, you might not always be able to.

Collaborative negotiation seeks to create a scenario in which all parties involved get part or all of what they want. This approach tends to produce longer-term solutions and minimize the opportunity for future conflict.

Every individual has a natural preference for negotiations. G. Richard Shell’s model of negotiation procedure combines collaborating and competing approaches with three other personal preferences based on Robert Blake and Jane Mouton’s managerial grid.

Regardless of whether a negotiation is competitive or collaborative, it usually follows a six-step procedure, as depicted in Figure 3.

Stakeholder Engagement Figure 3

Figure 3. Negotiation Procedure. Regardless of whether a negotiation is competitive or collaborative, it usually follows the same six-step procedure.

 

  • Plan. All parties should prepare thoroughly. This includes gathering as much information as possible, setting goals for the outcome, and agreeing on an escalation route if the negotiation is unsuccessful. Each party should attempt to understand the cultural, commercial, and ethical background of the other parties.
  • Discuss. Set the scene, identify the key issues, and communicate the objectives. Listen, question, and offer feedback regularly to confirm understanding.
  • Propose. Propose a clear and unambiguous solution.
  • Bargain. Discuss the proposal. Communicate personal boundaries and areas of flexibility.
  • Agree. Reach agreement on the core issues. Document what has been agreed on and record any peripheral outstanding items, with timescales for resolving them.
  • Implement. Communicate the outcome of the negotiation as necessary. Update any related proposal management documentation.

Negotiation is easy to get wrong. The cardinal sin is to enter into negotiations unprepared. This can easily lead to mistakes, such as making opening offers that are clearly unacceptable to the other parties. Pressure to conclude negotiations and to get on with the project or program can result in rushed discussions that produce difficult-to-implement outcomes.

When bargaining, it’s important to stay calm and know when to take a break. The result of a negotiation will have repercussions throughout the remainder of the lifecycle, so it’s worth the investment to get it right (or as right as reasonably possible) before moving on.

Shell identified five styles of negotiation, which are closely based on the Thomas–Kilmann conflict model, which was in turn based on the Blake–Mouton managerial grid. Shell’s model highlights the importance of negotiation in conflict management, and it also shows how one’s innate characteristics manifest differently according to context.

Shell’s interpretation of the five styles of negotiation includes:

  • Accommodating. This style indicates that one person is keen to solve the problem and preserve the personal relationship. However, if the other party doesn’t reciprocate, the accommodating person can feel taken advantage of.
  • Avoiding. Some people simply don’t like to negotiate unless (or until) absolutely necessary. They typically will dodge the confrontational aspects of a negotiation, which others may interpret as tactfulness and diplomacy.
  • Collaborating. Someone who enjoys negotiating and solving problems is said to be collaborating. The danger is that this enthusiasm can lead to simple problems being made complex.
  • Competing. A naturally competitive person will enjoy a negotiation because it’s an opportunity to win (in the context of “win-lose,” not “win-win”). This style can be viewed as dominating and can damage the bargaining process and the relationship.
  • Compromising. When an individual is motivated to conclude a negotiation in a fair and equitable way, they may rush the bargaining process and make concessions too quickly.

Individuals can demonstrate different styles in reaction to different contexts. A skilled negotiator learns to adopt his or her style to the context.

Common Pitfalls and Misconceptions

Poor communication between the proposal team and its stakeholders

Whether delegating work to a team or influencing stakeholders, conflict will inevitably arise in some form during the proposal lifecycle. The Bid or Proposal Manager will need to have conflict management skills no matter how well-honed his or her other interpersonal skills may be.

Without effective communication between the proposal team and its stakeholders, there is little chance that the proposal development process will succeed. This is why the communication plan is such an important role.

Summary

  • The Bid or Proposal Manager must lead the stakeholder community and influence behaviors and activities that support the team’s objectives.
  • Negotiation can be used to resolve differences.

Terms to Know

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