Home > Forums
Topic Title: Stakeholders: Friends or Foes?
Topic Summary: Decision-making about Stakeholders in a Lean environment
Created On: 07/05/2016 03:10 PM
Linear : Threading
Send to a Friend Send to a Friend
Search Topic Search Topic
Topic Tools Topic Tools
View similar topics View similar topics
View topic in raw text format. Print this topic.
07/25/2016 10:30 AM
Print this message

Author Icon
224556
Bruce Bader



Both Lean and Stakeholder theory streams have been identified as ways to improve value of the organization. With organizations practicing Lean quality management systems eliminating waste, they have limited excess resources to meet often competing demands. Most people who embrace Stakeholder Theory talk about meeting all Stakeholder requirements. Do managers ever consider if a Stakeholder requirement will be non-value added? Specifically do First-line managers ever make decisions differently concerning a Stakeholder requirement if he/she knows that the requirement will cause waste?
09/27/2016 02:13 PM
Print this message

Author Icon
ZakkTraynor
Zakk Traynor



performing a Stakeholder Analysis can often times address these issues. Typically done in the Define or planning phases. Worth a shot.
10/03/2016 02:05 PM
Print this message

Author Icon
224556
Bruce Bader



Stakeholder analysis is good. What happens if a Stakeholder has some power but also wants the process to do something that is a waste (say over processing). What priority do give that Stakeholder and their want?
10/03/2016 02:05 PM
Print this message

Author Icon
22767
Sam Tomas



What is a stakeholder? A stakeholder is a party that has an interest in a company, and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees and customers, although there are others such as community and trade organizations for example.

If a company has a goal of satisfying its stakeholder's, needs, wants, desires demands, requirements, and/or expectations, it needs to know what they are. However, one of the problems of trying to satisfy stakeholders is that their various self-interests may not all be aligned. For example, trying to maximize shareholder profits and enhance shareholder value may necessitate controlling labor costs since they are a critical input cost. But controlling labor costs may have a negative consequence on one group of stakeholders, the employees.

So it becomes a challenge for companies to successfully manage the self-interests and expectations of their stakeholders.

Sam Tomas
10/07/2016 03:46 PM
Print this message

Author Icon
224556
Bruce Bader



What if some one could provide a model for balancing expectations with lean principles? What if that model provided satisfied critical stakeholders while keeping the business/or individual process lean? Finally, what if that model was simple enough for a first-line manager to use for day-to-day decision making?

Would that be of value to organizations?
10/07/2016 03:46 PM
Print this message

Author Icon
ChristianS
Christian Sampedro



I am not familiar with Stakeholder Theory, but at the end all the needs, wants and desires that have to be satisfied are the customer's and not necessarily the stakeholders'.

I generally find conflicting demands from stakeholders and many times those are what we call waste. Remember that waste is defined by what the customer is willing to pay for, that generally helps obtain alignment with the stakeholders on accommodating the customer's needs instead of their own.
10/12/2016 02:49 PM
Print this message

Author Icon
224556
Bruce Bader



I like your thinking. It is clean and neat. But what happens if the stakeholder is something like a community activist group, and they are demanding something that is waste (maybe over processing)? the customer is not willing to pay for it but the activists are not willing to give up their position?
More specifically, what happens if this occurs during the time senior managers are not around. What should a first-line manager do?
10/12/2016 02:49 PM
Print this message

Author Icon
224556
Bruce Bader



Generally that is true, customer first. What happens if another organization, say the federal government, requires something that the customer is not willing to pay for? Should we work at aligning the government with the customer?
10/14/2016 11:18 AM
Print this message

Author Icon
pc2
P. Cartagena



It's always a balancing act. There's no one-size-fits-all solution to every problem.

Lean doesn't give you the last word on everything all neatly giftwrapped. It gives you way of thinking to move you forward. You still have to work at it, make tough decisions, make mistakes and learn from them.


Originally posted by: 224556

.... Most people who embrace Stakeholder Theory talk about meeting all Stakeholder requirements. ...

Keep in mind there's a huge difference between meeting minimum requirements and meeting wildest dreams. And there are infinite variations in between.

When there are direct conflicts, somebody will have to settle for less than their ideal. But just because you can't give everybody a Ferrari, it doesn't mean you're screwing somebody over by giving them a Mustang.


Originally posted by: 224556

..... Do managers ever consider if a Stakeholder requirement will be non-value added...

If they're smart they will.


Originally posted by: 224556

.... Specifically do First-line managers ever make decisions differently concerning a Stakeholder requirement if he/she knows that the requirement will cause waste?

That's why it's called balancing.


Originally posted by: 224556

... What happens if a Stakeholder has some power but also wants the process to do something that is a waste (say over processing). What priority do give that Stakeholder and their want?

It depends on how much power they have.


Originally posted by: 224556

.... But what happens if the stakeholder is something like a community activist group, and they are demanding something that is waste (maybe over processing)? the customer is not willing to pay for it but the activists are not willing to give up their position?

More specifically, what happens if this occurs during the time senior managers are not around. What should a first-line manager do?

This is a good example of why there's no one way to do things. It's entirely dependent on the unique situation. Just how much power and influence to these activists have? How broad is their scope? Over what time frame? Every situation will be different and require a different solution.

Typically, community activists operate at a strategic level, working with senior management to find a mutually agreeable plan that balances everybody's needs. Then the fist-line manager takes their direction from senior management. If there's a different situation, the path forward may require a very different balance of actions.


Originally posted by: 224556

... What happens if another organization, say the federal government, requires something that the customer is not willing to pay for? Should we work at aligning the government with the customer?

Again, depends on the situation.

In many situations, it's a non-problem. Where government requirements are mandatory and unavoidable, many customers already know it and accept that the product simply doesn't exist without the government's OK. Whether they want to pay for it or not, they know they have to.

Around here, you may have a chemical compound that you think will be the greatest therapy drug ever created. But until it's cleared by the FDA it's isn't a therapy drug at all. It's just a chemical. As far as the customers (doctors in this case) are concerned, the product doesn't exist. And it won't exist until the government says it does.

Sometimes, the manufacturer, customer and government are highly interactive. In the aerospace industry you'll often find all three working together to find the balances on a given project.
10/14/2016 11:19 AM
Print this message

Author Icon
71889
Stefano Uffreduzzi



Bruce, every behavior must be aligned to the lean principles that you can find in the "toyota way" book. If a stakeholder puts a requirement that will add a waste, then his mindset is not aligned with the lean thinking principles. The senior or first line manager must correct this behavior.
Different if a requirement comes from a government agency. This is a requirement the Company must comply, no question asked. And the Company must do it with a minimum waste.
Stefano
10/14/2016 11:21 AM
Print this message

Author Icon
Robert_Simonis
Robert Simonis



Lean is customer focused. There are internal, external, and stakeholders are all customers. Rephrase the question "Customers:. Friend or Foe?"
10/14/2016 11:22 AM
Print this message

Author Icon
ChristianS
Christian Sampedro



Well, first of all let's remember that waste (or non value-adding activities) can be reduced but we may never be able to eliminate. Many times regulation is waste but is required in order to do business, that what some people call "value enabling activities". Many times you have to add waste to your process in order to continue doing business, what lean theory teaches us is, first of all, to acknowledge the waste and then find ways to reduce it.
In your example with the activist group you may want to add the waste in order to keep doing business, especially if senior management is not is not around, and then align with the executive team on how to proceed. It should be an executive decision to do what the activist group is requesting or not.
Sometimes we tend to think that lean is 'only' about removing waste, but most importantly is about meeting all the customers' expectations. The customer is not going to be happy if we close down until we figure out what to do with the activists, but if we acknowledge the waste in the system then we can figure out ways to reduce it over time.
10/28/2016 02:33 PM
Print this message

Author Icon
224556
Bruce Bader



HOW ABOUT IF...
How about if someone came up with an objective method/ model for understanding and balancing the needs of stakeholders with their requests for waste? What if senior management agreed to that model and it was made available for first-line managers to use when faced with a situation where waste and stakeholder power were at odds?
11/04/2016 01:35 PM
Print this message

Author Icon
308260
Tim Anderson



Hi all,
forgive me if I've gotten this wrong.

Are we really talking about a first-line manager altering the way things are run ( the standard work) because of pressure from an external(?) stakeholder?

And doing so without Senior Management input?

Should they( the first line leader) ever be put in such a situation?

If they are, what's wrong with A3 thinking? i.e. Context, current, future and GAP analysis- The 5 why's will lead to the root cause problem for every context( stakeholder + business)

then potential solution(s) and then an experiment and a new standard.(If one existed before or not).

My guess is it's a leadership/support/focus issue, but 50% of the time, I'm wrong.

Still figuring which half.... :-)

Regards and best wishes,

Tim Anderson
12/09/2016 10:18 AM
Print this message

Author Icon
224556
Bruce Bader



What we are talking about is mostly the gray area that standard work does not address. But is could be adjusting the standard work or even the definition of quality due to a stakeholder's request. Or it could be that some waste from a stakeholder is incorporated into the standard work.

Unfortunate, I know of organizations where this happens. For example, a sales persons called production and asked for item "A" but a little different than specified. There is no formal review or senior management approval. The first-line manager will get in trouble if he doe not follow the sales person's wishes.

the A3 would help. the problem is that there needs to be clear definition of desired outcomes and limiting criteria.
04/12/2017 10:09 PM
Print this message

Author Icon
pc2
P. Cartagena



Originally posted by: 224556...
Unfortunate, I know of organizations where this happens. For example, a sales persons called production and asked for item "A" but a little different than specified. There is no formal review or senior management approval. The first-line manager will get in trouble if he doe not follow the sales person's wishes. ...


If they follow the sales person's wishes, does senior management then say it's OK for the line manager to miss all the targets (budget, schedule, throughput, quality,.....) that this out-of-scope activity disrupts?

If not, it is absolutely a failure of senior management/leadership.


Originally posted by: 224556
..... the problem is that there needs to be clear definition of desired outcomes and limiting criteria.

Yes, you are right.

It is senior management's responsibility to provide clear definitions of everybody's roles and responsibilities. If they don't, they're failing in their primary function.
04/13/2017 07:08 AM
Print this message

Author Icon
WolfgangBaer
Wolfgang Baernthaler



You need to put in place a business system starting from your customers, following demand planning management aka SOP with rules that ensure that you can deliver what the customer wants at the right time and right quantity, quality and right place. Management need to suppport this process. Remember, always start with the customer
Note: These forums are moderated by the Lean Enterprise Institute. All posts are reviewed within 24-48 hours prior to appearing on the site. Views expressed in these forums do not necessarily represent the views of the Lean Enterprise Institute.