Stakeholder Management: The Most Important Skill Nobody Teaches — Bruce McCarthy

Introduction

Managing stakeholders effectively is a skill that is often overlooked but can significantly impact product success and career growth.

During his conference at La Product Conf 2023, Bruce McCarthy, the author of “Product Roadmap Relaunched” emphasized the significance of stakeholder management and highlighted practical strategies for success.

This article will delve into the key takeaways from the conference, exploring the importance of stakeholder identification, prioritization, understanding, and leadership to effective stakeholder management.

Empathy: The Foundation of Stakeholder Management

Bruce emphasized that stakeholder management is challenging but crucial.

He stressed the need for empathy towards stakeholders, and the importance of treating them like you would treat your own customers. Indeed, by understanding their goals and validating their needs, Product people can foster strong relationships and drive collaborative success.

So the key to manage stakeholders is for you to get into their heads, and understand them better, so you can make the most out of them.

Bruce McCarthy at La Product Conf 2023

How to effectively manage stakeholders

Identifying Stakeholders: The TIPS Framework

To effectively manage stakeholders, Bruce introduced the TIPS Framework, a valuable tool for stakeholder classification. This framework involves categorizing stakeholders based on two key dimensions: their interest in the product (x-axis) and their influence within the organization (y-axis). The resulting typologies include:

1. Team (high interest — high influence): These stakeholders contribute full-time or part-time to the product or initiative. Engaging with them and gaining their buy-in is crucial for success.
2. Impacted (high interest — low influence): These stakeholders are directly affected by the product’s outcomes, including customers and partners. Clear communication and transparency with this group are vital to manage their expectations.
3. Power Players (low interest — high influence): These stakeholders possess significant influence over product decisions. They can approve, fund, or impede progress. Identifying and engaging with them is essential.
4. Subject Experts (low interest — low influence): These stakeholders offer valuable information, ideas, or advice based on their expertise (e.g., HR, Security, Compliance). Leveraging their knowledge can enhance decision-making.

At Yousign, when working on a large cross-functional initiative that impacts several teams, we usually organize “Steering Committee” meetings on a regular basis, typically once a month. These meetings serve as a valuable platform to exchange information gathered from Subject Experts and the collective knowledge of the Team to the Impacted stakeholders.

Moreover, any employee with an expressed interest in the topic is encouraged to attend, ensuring that information reaches as many relevant individuals as possible.

Simultaneously, when we require validation for decisions to progress, we engage with the Power Players, coming to them with a comprehensive plan and seeking their approval.

By effectively identifying and categorizing stakeholders into the four typologies outlined in the TIPS Framework, we ensure that we include and engage all relevant parties, minimizing the risk of overlooking anyone critical to the initiative’s success.

Prioritizing Stakeholders: Focus on the Essential Few

Bruce acknowledged that almost everyone in an organization is a stakeholder to some extent (as shown by the TIPS framework above).

However, due to time constraints, it is essential to prioritize engagement with the most critical stakeholders for each specific initiative.

Determining the Power Players within an organization can help you with that. During the conference, Bruce McCarthy shared valuable insights on how to identify these key stakeholders who hold significant influence.

To gain a deeper understanding of power dynamics within your own organization, Bruce suggested asking yourself a set of thought-provoking questions. These questions serve as a fun and enlightening exercise to identify the individuals who truly hold the reins:

1. Which discipline does the CEO of the company come from? This helps gauge where the CEO’s loyalties and priorities may lie.
2. Which department faces the least difficulty in getting positive responses to their recruitment needs? This provides insights into departments that have significant influence within the organization.
3. Who asks the most questions about your roadmaps? Identifying the departments or individuals who show the most interest in your product’s direction sheds light on their level of influence.
4. Which department has a “Chief of” role rather than a “VP of” role? This distinction can highlight departments that hold more decision-making power.
5. With whom does the CEO regularly have coffee in the morning? Understanding the CEO’s close connections and trusted advisors can reveal influential stakeholders.

By posing these questions and reflecting on the answers, Bruce himself discovered that he was working in a sales-led company rather than the product-led environment he initially believed. This exercise helps uncover power dynamics and enables Product professionals to navigate stakeholder relationships more effectively.

Understanding Stakeholders: Communication and Observation

According to Bruce, face-to-face communication is irreplaceable when it comes to building relationships and gaining a deeper understanding of stakeholders.

While other forms of communication, such as email or Slack, may be necessary in certain circumstances, prioritizing face-to-face interaction helps establish rapport and clarity.

Bruce highlighted the importance of observing stakeholders to infer their motives accurately.

By starting with existing knowledge and carefully observing their behaviors, Product professionals can align their communication and address stakeholders’ needs proactively.

Leading Stakeholders: Decision Styles and Proactive Leadership

Bruce outlined four decision styles:

1. Directive: A few individuals make decisions and inform others, expecting everyone to align and support the chosen course of action.
2. Participative: One person makes the decision, but actively seeks input from stakeholders. This style encourages debate and commitment from all participants, promoting a sense of ownership. According to Bruce, this is the decision style to favor.
3. Democratic: The group gathers information and collectively votes on the decision. Stakeholders are expected to accept the majority decision.
4. Consensus: This style requires unanimous agreement among stakeholders before making a final decision. It often involves extensive discussion and debate, making it the slowest approach.

Bruce emphasized that stakeholder management is not solely about handling requests or seeking approval; it involves proactive leadership and guiding a group of people toward achieving remarkable outcomes.

As a Product Manager myself, I tend to prefer the Participative decision style as well. This approach allows to build ownership while ensuring everyone is aligned and prevents us from getting trapped in endless debates that can waste valuable time and energy.

The DRI Role: Directly Responsible Individual

Bruce introduced the concept of the Directly Responsible Individual (DRI).

The DRI demonstrates several key responsibilities, including

• aligning with authorities on objectives
• reviewing available data
• communicating decisions and rationale
• aligning with stakeholders on metrics and priorities
• seeking the best advice
• and providing regular progress updates to all stakeholders.

As you can tell from this description, this aligns closely with the role of a Product Manager!

Conclusion

Effectively managing stakeholders is a critical yet often overlooked skill, especially for Product people, who naturally have a lot of internal interactions on a daily basis.

Bruce McCarthy’s conference shed light on the importance of empathy, stakeholder identification, prioritization, understanding, and leadership.

By applying these strategies, Product people can enhance their stakeholder management abilities, driving successful product outcomes and advancing their careers, so this is definitely something to focus on!