Stansburys Blog

Now that the election is behind us I have found myself surprised by just how alien the concept of coalition is to so many people.  Luckily for the country the two relevant (i.e. Lib Dem and Conservative) leadership teams seem to “get it”.  By this I am not saying whether or not it is the “right” coalition but merely thinking about what it takes to make and maintain an effective coalition.

Then it occurred to me that I should not be surprised.  This lack of understanding is a fundamental blocker to successful business change.  Thinking back to Kotter’s approach to successful change the second stage is build the “powerful guiding coalition”.  So this set me thinking about lessons we might take from this recent coalition forming process.

The word “coalition” comes from the Latin coalescere, meaning to join or grow together.  Typically we think of a coalition as an alliance that forms in political or commercial contexts.  This can be approached from so many angles, but one interesting approach is proposed by Steven Brams and he has looked at the importance of the formation process.  He has proposed two broad coalition types:

Fallback (FB): Players seek coalition partners by descending lower and lower in their preference rankings until some majority coalition, all of whose members consider each other mutually acceptable, forms.

Build-up (BU): Differs from FB, in that only majorities whose members rank each other highest form coalitions.

They conclude that the Built-Up coalitions tend to be more stable since people tend to be with the partner they really want to be with rather than ending up with other partners (second best or worse).  In many examples it appears the final stable coalition starts with smaller BU coalitions who subsequently coalesce into a larger, majority coalition.

In the case of the general election it is interesting.  It would seem that for the party leaders the current coalition is a BU alliance (with first choice partner) and that negotiations with Labour were the start of an FB coalition – or perhaps just a negotiating ploy.  However it appears there are very many Lib Dems and Tories who see the current alliance very much as FB (each preferring a Labour/rainbow coalition and no coalition but minority government respectively).  Whatever the intentions behind the Labour negotiations it certainly made it clear that Labour did not want to talk, and that those who preferred Labour were left facing an FB coalition or no coalition at all.

There is the sense that the Lib Dems are in fact the initial BU coalition, albeit formed many years back.  This further coalition with the Conservatives does put some pressure on the initial coalition.  It would appear that there were several opportunities for opponents to have a say, the Lib Dem MPs, the Federal Executive and even a special party conference (which I understand was not technically necessary, but held nonetheless).  So the engagement has been wide and effective, though hurried through as a change many people have had the opportunity to scupper the deal and so far Clegg has carried his party with him.

What can we take away from a management perspective?  Companies implementing change will often try to brow-beat people into a grand coalition.  Additionally they often won’t open things up to key stakeholder groups thus denying them a chance to air their objections and concerns publicly.  As a result many managers and teams will see themselves forced into an FB position, which would appear at best a semi-stable arrangement and probably worse than that when many stakeholders are disgruntled.  Much better, from this analysis, is to build small, but stable BU coalitions and then work on developing real common ground between the smaller coalitions until you have the majority support you need for a successful transformation.  Remember, too, that with stakeholder mapping it is often worth plotting groups as well as individuals.

This might take a little longer in the early stages, but is the route to effective and lasting change.  While so much of the press was haranguing Clegg and Cameron for taking so long I couldn’t help but wonder at how quickly the coalition seemed to be pulled together.

There is a further interesting perspective.  In business senior managers often take the “burning platform” for granted and assume everyone will be swept along with the new transformation.  Even as the press and the markets seemed to be fanning the flames into inferno proportions, many players in both parties saw no pressing need for coalition and would have preferred to go it alone – doing the same as they had always done.   Creating that “sense of urgency” (Kotter step 1) can also take longer than first expected, but is key to “making it essential”.  Maybe it was the prospect of the Queen flipping a coin that made the difference………

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Previously we have looked at the power interest matrix for helping you map and manage your stakeholders.  Now we will turn our attention to an Energy vs. Commitment matrix.   Now you plot the individual stakeholders and stakeholder groups against these criteria – their commitment to you change / programme and their natural energy for communicating and acting – which gives us four groups:

Blockers – to watch as their high energy makes them likely to communicate widely and act vigourously.  Their low commitment to your change affects what they say and do, which makes them likely to land up standing in your way.

Champions - why do we never seem to have enough of these?  The same high energy as your Blockers but committed to your change.  Look after these stakeholders when you find them.

Preachers - are committed to your change and also may talk a lot, but their low energy means they are unlikely to take much other action.

Sleepers - well the hint is in the name.  They are not really committed to your change and don’t have the energy to do anything about it or talk about it.  Unless you know they are because they don’t understand what is coming (and therefore might move to another quadrant when they find out) you don’t need to exert too much time or effort looking after them.

As we often say, the key to using these models is not just doing the analysis, but actually doing something active with the results.  When you find Blockers it may be their low commitment is based on misunderstandings or fear and uncertainty.  We have found many cases where it’s possible to engage these people and turn them into Champions.  If not, it is important to find ways to counteract the communications and actions of these people (particularly if they have positions of power and/or influence).

Stakeholder communication links back effectively to Kotter’s 8 step approach – in particular, step 1 of “creating a sense of urgency” and step 2 “building a powerful guiding coalition”.  And don’t forget, the earlier you start these activities the better!

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We love this model – created by Harvard Business School professor James Heskett and developed by the likes of Jones, Sasser, Xerox and Intuit. This can be used in so many situations including projects where you may not appear to be selling anything. In this approach you represent customers graphically plotting satisfaction against loyalty:

Terrorists - at the very bottom of the scale you have customers who are extremely dissatisfied and have very low loyalty. They can do great damage to your business – particularly in the Internet age – just take a look at this website orangeproblems to see this sort of action, though blogs, emails and word of mouth are the more likely outlets.

Apostles - at the other end of the scale the highly loyal and highly satisfied customers.  What sets them apart is the fact they actively go out and spread the good word. Some interesting research carried out by Xerox found that customers rating “extremely satisfied” were 6 times more likely to repurchase than those ranking “satisfied” the very next option down.  These are your company’s best friends.

Hostages - with medium to high loyalty and satisfaction these customers tend be to “stuck”  – think of contracts where you are locked in for 12-18 months, not very happy but no easy way out or where other “costs of switching” keep you locked in to your current supplier.  Monopoly / oligopoly supply situations create hostages too.

Mercenaries - often the bulk of your customer base. Apparently satisfied and loyal these people tend to switch to the best deal as they see it.   In industries with a low cost of switching they are likely to change supplier quickly and without warning. For example where there are plenty of reasonable “me too” products then price / special offer is often the differentiator.  Many Mercenaries have the behaviour to deeply ingrained to change, but others would willingly become Loyalists when they receive the right product and service combination from a supplier.

Defectors - neither particularly loyal nor particularly satisfied.  If they haven’t already left they are likely to.  However they tend not be as vocal as the Terrorists in expressing their dissatisfaction.  They are often one trigger away from leaving.  As with Mercenaries many would willingly become Loyalists when they receive the right product and service combination from a supplier.

Loyalists - High satisfaction and high loyalty but do not spread the word that much. What separates loyalists from apostles is really how they spread the word. As well as being active Apostles need to be very well connected and typically influential – i.e. they are able to spread the word to lots of people and those people are likely to listen.  However the loyalists can be thought of as the bedrock of your company, they keep on coming back.

As with all such models the key lies not so much with the analysis, but what you actively do to improve things for your business. How do you win over the terrorists or increase the number of apostles, for example.  It would be wrong to stand idly by and watch all your defectors defect, though it may be the case that not all of them could be cost effectively satisfied and retained.

One area to look at is ensuring the dissatisfied have plenty of places to express their frustration – if they can’t vent at you then they will vent to others even more vigourously.  Of course it goes further than just listening, you need to make amends too.  Look out for cheap, unempowered, “customer service ” help desks, I typically put down the phone even more frustrated than when I first called in.

Remember, one shoddy product or one bad piece of service could tip a Loyalist into the Defector zone – however effectively and rapidly addressing the problem can really increase loyalty and even create an Apostle.

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There are few things that are more important than understanding and managing your stakeholders.  There is too much to cover in one post – the hint might be in the title – I plan to return to this topic…………  Let me introduce the first tool I recommend to you – the Power-Interest grid:

Stakeholder map - power interest

Map all your stakeholders against this grid.  Basically you are looking at their interest in what you are doing (e.g. project, programme or business change initiative) and their power to influence what you are doing.  According to their position you can start to select the appropriate actions:

Minimal Effort - phew, the people with a low interest in your initiative combined with their low power places few demands on your comms and stakeholder management teams.

Keep Informed – a bit more required here, particularly on the communications front.  These people have a high interest in what you are doing, but relatively low power.  Don’t become complacent though, the combined effect of many disgruntled individuals can grow.  Additionally the opinion of one individual may feed up into more powerful bodies such as unions or the press.

Keep Satisfied – these people need to be kept happy!!  Those with a high level of power but low level of interest need to be kept satisfied.  Bear in mind the level of interest can change rapidly when a stakeholder becomes dis-satisfied.

Manage Closely – here come your “key players” who should be the key focus of your stakeholder management time and effort.  We will come back in to this in other posts, looking at ways to manage these people.  Above all don’t forget to give them a really good listening to from time to time.

Remember this map may not remain static over time. In a long and complex programme a stakeholder might have a low interest initially with increasing interest as the change came closer to them.  Also external changes, scope changes and role changes might all move people from one box to another.

This approach links back effectively to Kotter’s 8 step approach – in particular, step 1 of “creating a sense of urgency” requires effective working with all stakeholders and step 2 “building a powerful guiding coalition” means working effectively with your key players.  And don’t forget, the earlier you start these activities the better!

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