Who's a Stakeholder?

I've just finished a two-day course on managing stakeholders run by The Bank - another of its non-prescriptive what-does-it-mean-to-you exercises. The idea of "stakeholders" was introduced in 1963 by the Stanford Research Institute and defined to be "those groups without whom the organisation would cease to exist". It's one of those ideas that works as long as you don't get too close to it. What it can't mean is "anyone who has an interest in what the organisation does", because if the organisation is big enough, that's just about everybody and the idea becomes just about empty.

I'm going to jump to my conclusion here: a stakeholder is anyone who has a legal, economic or other substantial relationship with you or your project and stands to have their life made worse if your project fails. Take the idea of "worse" seriously here. Employees are stakeholders because if the firm fails, they lose their jobs. Customers are sometimes stakeholders, such as when they are holidaymakers with a tour operator (what happens when the operator goes broke?), and sometimes not, if all they buy is a chocolate bar. Not being able to have your favourite chocolate bar does not make your life worse, though it may make it a little less sweet. Some patients in a hospital are stakeholders (if they are in for life-saving operations) and sometimes not (if they are in for cosmetic surgery). We are all, however, stakeholders in the Water and Sewage company - you want to think about how much worse your life is going to get without potable running water and with blocked sewers? Some things don't have any stakeholders at all - like the local car boot sale or the next episode of some cheap reality TV show.

Within a company, who are your stakeholders? Your Line Manager, who will get their ass kicked if you screw up. Maybe their boss as well. How about the people who do the work? If your project fails, what happens to them? Not much, unless they were hired specifically to work on the project and are fired if it's not there anymore. The full-timers still have jobs: failed projects make work for the working man to do as much as successful ones. There may be people waiting for you to finish your project so they can do theirs, but if you fail, they will find another way of getting started. Their lives are a little more difficult, but "more difficult" does not mean "worse". So not them. The suppliers are happy-ish because they still got paid for all that stuff that no-one is going to use now. They may have to find another customer to replace the business the successful project would have given them, but having to find new business doesn't make their life worse, just a little more difficult. If the project was going to provide many new jobs to the area, those people who now won't have those jobs and can't find others, they turn our to be stakeholders.

So what are all the other people who are working on the project and / or looking forward to its success, but whose lives won't end if it fails? In the loose parlance of modern business, these are "stakeholders", but they have nothing at stake, so they aren't. They are what they always were: suppliers, contractors and employees, doing their job. You need to "manage" them: you need them to give you time and perhaps money; you need them to do the work to schedule; you need them to not obstruct you; you need to keep them informed and keep informed by them. You need to stroke egos and keep the high muck-a-mucks informed. You need to do all that stuff, but that's not "managing stakeholders", it's "dealing with the people you need to work with." Or, work, as it's otherwise known.

Does it matter? Yes. Because once you know this is really about "managing the people you need to make your project work", it all gets much more specific and, well, you could almost be prescriptive. It's also because it creates the illusion that everyone depends on everyone else - "we are all stakeholders" - when in fact your project could die a wheezing death and nobody would notice, care or be one jot worse off. Which is what actually happens.

The Joy Formidable

So there's this slightly naff ad for a Swedish pear cider (that's what it says) that makes it out to be the drink of choice of all those party people who are so cool you don't even know they're there because they're in clubs you didn't know existed behind doors you didn't know opened. Or something.  It's been playing in the cinemas for a month or more now. I didn't like it at first because it seemed to play on the idea that there's a great time to be had out there if only we knew where - and drinking their cider would help. Mmmmm. Not so much. But there's this band in the ad. And they're playing this song. Which the second time I saw the ad I got (the first time I was just like, oh, indie noise).

Listen to this twice. It's the best track you will hear this year. If you don't agree, give it another try. If you still don't get it, go back to all those English girl faux soul singers.



I get all hot and bothered when I hear it - as I'm playing it now - and not just because guitarist / singer Ritzy Brian is hot. It's been a while since a song did that. Of course I'm getting the mini-album from Amazon.

Those Darn "People Skills"

My reflex answer to "what are your weaknesses" is: a) hiring people and b) "people skills".

Yet the people I have hired over the years have all gone on to do well for themselves. I cheat, of course, because I only hire smart people - it makes my life so much easier. I have had to let people go, and in both cases I believe I did so in a manner that let them keep their self-respect and dignity.

When I'm talking about something with someone, I'm fine, even if it's a "personal" matter like behaviour or even dress. I can do that so indirectly and tactfully they don't even notice - and sometimes I don't realise I've done it until later. As long as there's a thing we're both talking about, I'm fine.

I'm not so good with dealing with people in authority, I tense up the same way I do if someone points a camera at me - and what are the odds of that for an ACoA? I am not good at being polite to people who are supposed to be helping me but clearly don't know enough to help me (most IT help desks and shop assistants): I tend to cut the conversation short. That's not unique to me.

I think I'm bad at dealing with and communicating with people because I know they don't understand me, nor me them, unless we're just exchanging practical information. I read that sharing mutual interests with another human being is supposed to give you a warm glow of belonging: I'll assume you have felt that. I haven't, or if I have then it was so faint I missed it. The thing is, the Normals don't know this about my communications with them: they think they are communicating as if with another Normal. I really should stop worrying about this.

I'm really bad at dealing a bureaucracy that's designed to make my life more difficult for no actual reward - we're talking about a large retail bank here. Its IT and data security would not stop a halfway decent Russian hacker from stripping it of valuable data at the end of a six month stint, but sure as heck stops us doing our jobs. Which is a special case of what my real weakness.

Which is dealing with people who are not actual rogues but are practicing denial, lying, misleading, obfuscating, playing games, or who are insecure in their job, or who aren't quite up to the job and have to hide it or try to bring the job down to something they can manage - to the detriment of my plans and intentions. You can be as mendaciously bureaucratic as you like if it doesn't affect me. Once you mess up my plans, you are no longer a person, but an obstacle, The Problem. You are not with me, so you must be against me, and are therefore The Enemy. You. Personally. No hiding behind job descriptions: a decent person wouldn't do a job like that, so you cannot be a decent person. In the movie Clean and Sober Morgan Freeman gets the line "You know the addict's least favourite word? It's NO". When you become an obstacle, you are saying NO and I can barely contain my anger. My father's first reply was always NO and a boy can get fed up and angry of hearing that after a while. It turns you to that Jesuit thing about being easier to ask forgiveness than permission.

This world is full of such people and I have no patience with them. That's my weakness.

Preliminary Remarks on Denial

Denial is the failure to acknowledge an unacceptable truth or emotion or to admit it into consciousness, used as a defence mechanism. If you're in denial about something, you know it's true, and you're refusing to admit it to yourself, other people and the relevant authorities, whosoever they may be. Denial is always selfish, and because it is a choice and leads to others becoming confused about how to interpret large chunks of their world correctly, it is always malicious. That malice is often the subject of its own denial: the secrets are held to be harmless or our enforced ignorance was for our own good. Hiding the truth about something that matters to someone else is always bad - though that doesn't mean you should rush into blurting it out any old way and when. You are allowed to hide the truth from your enemies. Your children, your family, your spouse, even your employees, customers, suppliers and stockholders - these are not your (official) enemies. When you hide a truth that is their business from them, you are treating them as if they are (officially) enemies. That is malice and bad faith. The fact that the denier is often themselves the victim of someone or something else does not let them off the hook: the correct way to deal with whatever it is, is to name it, shame it and if need be divorce it, not to fabricate a fairy-tale in which it doesn't exist. Weakness may be a reason, but it is not an excuse.

There are times I think that ordinary people no more listen to the words they hear and use than they do the lyrics of their favourite songs. They hear the sound and the inflections and the subject and that's all they need. They pick up the emotional markers and draw political consequences from that - "manager X thinks that project Y is a good thing, so I shouldn't make rude noises about it to her" - but do not listen to the actual words and draw substantive conclusions - "manager X thinks project Y will help us one jot? hasn't she seen it? I should explain why it sucks".

If you grew up with denial you can't do what normal people do: ignore the lyrics and listen to the song. It isn't that you can't hear the song, it's that you know that a song is just a singer's trick. You can't trust the words, you can't trust the emotional signals around the words, so you trust only the actions. You work backwards from consequences to intentions because you can't trust what anyone says about their motives. You take words at their face value, because that's all you can do, even though you know as a matter of abstract principle that what they said is not what they mean. After a while, you can recognise denial by its very manner of expression. And because you know about the malice behind it, you are upset and insulted, it triggers memories and reactions from way, way back when you were vulnerable and upset. If you grew up around denial, it's hard to handle it when you're an adult.

This is what trips me up time and time again at The Bank. I'm not going to list all the things The Bank's management is in denial about - life is too short and I'll just get upset. And all this has consequences for what I think I'm good and bad at as regards that dreaded phrase "people skills".

IT and Analytical Skills Audit

In the previous posts I described the Dreyfus model of skill levels and explained why experts are not to be found in service industries. I've worked in service industries all my life and it makes me wonder how smart I really am or how much I didn't bother learning because I didn't need to.

So here's my view of myself. I am a proficient problem-solver and decision-maker. Part of that proficiency is learning to use the tools at hand to solve the problem, to produce something that does whatever needs to be done. At work I use Excel and VBA to produce reports off Teradata and Oracle databases not because I think those are the best tools, but because until recently The Bank didn't have anything else. (That's right, one of the largest retail financial companies in human history didn't have SAS or Business Objects as standard analyst's kit. You couldn't make it up.) Those solutions do the job and the job is what I was hired to do. Now that we have SAS and Business Objects, I'll look into using those. I extend my knowledge of what those tools can do and I've tightened up my programming style since reading Code Complete a couple of years ago. Another part of that proficiency is having enough background knowledge of a lot of subjects so that I can pick up and understand what I need, covering subjects from statistical significance tests to buyer psychology.

Am I a proficient VBA programmer and Excel user? Here's where I have a problem. Probably I am, but because I've always worked in service industries where the technical requirements are very low, I've never really been pushed to learn all that I can learn. And I don't learn that stuff for the enjoyment of it - I'm a philosopher and mathematician, not a programmer who goes home and works on open-source. So maybe while I have proficient technique, my knowledge level is only competent.

If I'm a proficient problem-solver and decision-maker, how come I'm, not in management? Because except right at the top, management is not where decisions are made nor problems solved. Most management jobs are mostly administration, reporting, supervision, some light project- and process-management and people-development. A handful offer opportunities for leadership-by-example and even fewer for leadership-by-inspiration. The Bank flatters call centre team group supervisors by sending them on "leadership" courses, but that's just linguistic inflation. You want to make decisions? Seek out the trading floor my son. You want to solve problems? Go into programming, engineering or medicine.

I'm a proficient pricing analyst / manager as well. In a lot of companies, pricing is where a lot of decisions are. Just not in The Bank. The pricing I do is neither insurance nor financial instruments, but that's enough. I don't want to price CDO's thank you. You can't be good at pricing without being competent at management accounting and such related matters.

So at what do I suck?

R I P Tony Peluso

Tony Pelso is the guy who played the guitar solos on The Carpenter's Goodbye to Love and along with Richard Carpenter invented the Big Ballad Guitar Solo. He wasn't the greatest guitarist in the world, but he didn't need to be. He just needed to do this...



In Heaven as I think of it, that's enough to get you in.

Why Experts Don't (Usually) Work in Service Companies.

A service company uses stuff that other people make and design to provide a service to other people. Telcos use optical fibre and highly specialised computers ("switches" if it's a SS7 / C7 network, routers if it's a VoIP network) built by someone else running software that implements very abstract and specific standards designed by someone else. You don't need to know the innards of C7 signalling or electromagnetic theory to run an telco operation, you do need to know how to make relationships and negotiate. Banks are service companies, so are bus companies, railways (unless they are vertically-integrated), travel companies and all retailers. So are hospitals and GP's - medics don't know how drugs work, but surgeons at least know their way round their bit of the human body.

Service quality can range from a five-star hotel with a concierge paid a very high salary for his knowledge of the town to a one-star bed and breakfast with a single girl on reception who seems to be there (as far as you can see) all the hours the place is open and who can just about direct you to the local railway station. The service sector tends to drift down the skill scale: if you need a palladium widget you have to pay for palladium and that puts a minimum price on the widget, but you can always live with a little less hotel service on this trip to save some money. A sustained bout of cost-cutting customers later and none of the hotels can afford to offer good service, so they don't. Quality decrease is the other side of the inflation coin: heads we put up the prices, tails we reduce the quality and quantity.

After a certain point on the way down the price/quality slide, the senior management of a service organisation gets concerned about the organisation's ability to handle any tasks requiring specific abilities, talents and knowledge. It make sense to outsource your freight forwarding to a specialist company because you probably don't do enough to keep the people you would need busy. The same applies to advertising, as very few companies have a culture that's friendly to the kind of erratic sparks who think up good ads. The problem starts when you outsource all your creative thinking about anything to outsiders, so that all your people are doing is managing agency relationships and the internal bureaucracy. Telcos and banks are nothing more than information-processing machines, yet many outsource their serious operational IT work (The Bank doesn't run your ATM's and current accounts, EDS does.). As a result, no-one in the business actual understands the systems any more and if they ask, it costs them a fortune in fees for meetings and Work Requests. So they don't ask.

A service organisation can wind up consisting of a large number of people who graft at heavily-supervised very specific front-line tasks, a senior management with a small supporting staff, and a middle management that is little more than groups of people managing relationships between the people who actually know something. In fact, that's a pretty good description of a lot of people in the product areas of The Bank. Relationship managers, project managers, team leaders, business managers, account managers - call them what you like, they don't need and often don't have much industry knowledge or technical skills. What matters is that they can handle people, politics and bureaucracy, and they don't rock the boat.

Which is not going to produce a culture that encourages skill and knowledge development much beyond the lower end of the advanced beginner on the Dreyfus scale. Why not? Well, what kind of person gets to be really good at something? Or to ask the same question a different way: do you really think that Roger Federer, Tiger Woods, Alexander Grothendieck or for that matter Brian Kernighan and Denis Ritchie are (or were at the time they did what made them famous) well-balanced "normal" people?

Uh-huh. Normal people do many wonderful things, but only after those wonderful things have been invented by their neurotically-driven inventors. Think of the famous story about the discovery of penicillin: just how desperate for a discovery do you think Fleming was that he thought there might be something in what a normal person would have seen as a dirty Perti dish and cleaned without a further thought? Exactly.

People get to be good at anything because they push their current limits of knowledge and accomplishment a lot of the times they practice and work. There's a whole literature on this: the 10,000 hour thing and the idea of Deliberate Practice - see Geoff Colvin's Talent is Overrated. Try it at the day job: you have to read the manuals, acquire the background knowledge, find time and projects to learn on - which means you have to dodge the time-consuming routine junk work and be prepared to miss those fake deadlines so you can learn and experiment with something new rather than hack out an answer with what you know. You're going to do this how while you have a day job, a commute, a wife and children or you want a social life and to spend the weekends wind-surfing? Why bother even ascending to competent when you can get paid just as much for being an advanced beginner? Especially when that's all the company expects?

If you want to be good at anything, and you are in a large service company, you will leave for a small firm, a consultancy or private practice so you can concentrate on what it is you want to learn and work on. Which is the final part of the explanation as to why service companies don't have experts working in them, and precious few proficient people either. Now you know why governments, banks and other organisations don't have someone who Knew Better when they made that crazy decision. There was, but they left. Before they went crazy.