Asset management: How to identify your unique stakeholders

Aug. 5, 2020
Once you start involving all stakeholders, you can implement more effective asset management processes.

Although it is an essential element of asset management, the concept of an organization’s stakeholders is often overlooked or inconsistently applied. In ISO 55000 parlance, a stakeholder is any person or group who affects, is affected by, or perceives themselves to be affected by the activities of the organization. Stated more simply, anyone who impacts or is impacted by the organization is a stakeholder.

About the Author: Brian Kaiser

Every organization has a unique list of stakeholders. Some industries have common stakeholders (e.g., regulatory bodies), while other stakeholders are unique to the social, cultural, economic, and physical environment in which the organization operates. Identifying the organization’s stakeholders, particularly those connected to asset management, and understanding their needs and expectations is an important building block of the asset management policy and strategy.

Involving stakeholders in this process of discovering and documenting stakeholder needs and expectations has tremendous value. Stakeholder needs can often be misunderstood or distorted as they pass through layers of management. For example, a customer may request 99.9% availability of service, even though they can function well with 99% availability. This may occur because customers lack confidence in the organization or because they don’t understand their own needs well enough. The organization’s management then sets a target of 99.99% availability to leave some cushion before reaching the perceived minimum stakeholder needs. As a result, the customer pays the increased rates required to deliver 99.99% availability, when 99% availability would have been acceptable.

Internal stakeholders are as important as external stakeholders like customers and regulators. Internal stakeholders, such as a board of directors or maintenance department, can have unique needs and expectations that should be analyzed and addressed. In some cases, internal stakeholders are proxies for external stakeholders, such as an environmental compliance department that represents the regulations imposed by a state or national environmental agency.

When bringing stakeholders into a stakeholder analysis discussion, it is important to provide background and training on the basics of asset management. Using a common language to minimize repetition and misunderstandings will make discussions more effective. Also, it is important that all stakeholders understand the intent of documenting stakeholder needs and expectations. They should also understand how the results will be used to develop the asset management objectives so that they can provide all relevant information.

When meeting with stakeholders, emphasize the importance of open and direct discussion, as transparency in objectives is one of the key goals. An unstated or inaccurately defined need will lead to frustration and issues both for the stakeholder and for the organization, and can quickly sour a good working relationship.

As part of defining stakeholder needs, determine the full scope of any effects on the stakeholder if a need or expectation is not met. Understanding needs that are essential, needs that are helpful but not necessary, and needs that are “nice-to-have” will facilitate defining appropriate asset management objectives and prioritizing asset management efforts. A simple tool like “Five Whys” can be very useful in guiding this part of the discussion.

After defining stakeholder needs, establish quantitative and objective performance metrics for each stakeholder need or expectation. These metrics will enable performance monitoring and precise corrective action when needed, as well as connecting directly to any stakeholder needs or expectations that are related to asset management objectives.

Finally, establish a communication plan for each stakeholder that provides an update on defined performance metrics. The plan should include the method (how communication will occur), format (how communication will be structured), and cadence (how frequently communication will happen.) The communication plan should be agreed upon between the organization and each stakeholder to ensure that communication is occurring frequently and effectively.

Your Space

This article is part of our monthly Your Space column. Read more from our Your Space series.

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