The New Sustainable Business Development Framework – The Stakeholders

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This blog post shows that for sustainable business development it is mandatory to know and to be connected to your stakeholders, but it is even more important to understand their motivations and how you can influence them? 

In the summer of 2021, the numbers of infected COVID-19 persons were steadily declining. As a result, the restrictions for travelling and meetings went down. My long–time colleague and friend Thorsten called me and suggested to meet for dinner on Saturday evening in a typical Biergarten (beer garden) in the Nürnberg area. After more than one year with virtual meetings and serious contact restrictions, this was a great idea. And so, I happily accepted. We met around 6 p.m. and found a place to sit on a bench under and an old linden tree. In a Franconian Biergarten drinks and Food are not served, so he queued in the lines for drinks, I queued in the line for food. Back at the table we enjoyed Schäuferla (a typical Franconian dish, a baked and roasted pork shoulder with dumplings) and an alcohol-free wheat beer.  

We spoke about joint activities from the past, and after a while Matthias told me that he was stuck with a current problem. As a business development leader, of an innovative software company he wants to increase his footprint on a global large software and cloud company. As it is always a pleasure for me to listen and understand other people’s business issues, we did a step-by-step investigation of his efforts so far and concluded that he needs to leave the paved roads. 

The basic stakeholder map 

The basic tool to understand which person(s) at the alliance partner’s company will have an interest in your products and solutions is the stakeholder map. The stakeholders are grouped into four categories, according to their perceived level of interest and decision-making power. 

The stakeholder map gives you further indication of how you should care about target groups. It is the groundwork for a communication matrix, which describes the cadences and discussion topics with and between the stakeholders. 

So far so good. Thorsten said that he and his team had figured out all the various stakeholders and their potential interests and have grouped them meaningfully into the different quadrants. 

Hidden agendas 

After working more than a year with those stakeholders he figured out that in many cases the interest of various stakeholders has changed and that some of them even had hidden agendas.  

For example, one of the product managers at his partners did not seem to have a real interest in integrating Thorsten company’s technology into the partner solution to create a higher value, even it was agreed beforehand. Thorsten’ teams ran several technical enablement sessions with the partner product development team, but the adoption rate was extremely low. The partner product manager was categorized with high interest and high decision power. This stakeholder had decision power, but obviously no interest. Thorsten and his team were not able to figure out his hidden agenda, if any, but decided to not invest more time and efforts. 

Thorsten went to his executive and asked for help. He and his team created a short but comprehensive pitch to point out the value and the wins-wins for both companies. He briefed his executive very well, so that the outcome of the next cadence call was an executive agreement for intensified collaboration. 

Connecting the right dots 

Thorsten and his team started a second round of enablement and collaboration. After a while he recognized that they still did not make progress. He went back to his executive and asked him to re–enforce this topic once again in the next cadence call. In the de-brief Thorsten was told that even the partner product manager was reporting in this executive management line but got the business direction from a different dotted line Line-of-Business executive. This LoB executive was classified with strong interest and strong decision power in the stakeholder map as well. However, it turned out that the interest was still there, but the decision power was not as high as expected. 

Thorsten told me that he and his team learned the lesson painfully and reworked the stakeholder map, incorporating new insights and considering departmental boundaries and invisible strong relationships. But before wanting to start a third attempt, he asked me: “Juergen, do you think, executing on the revised stakeholder map can work now?” 

I replied: “Honestly, I do not know for sure, Thorsten. It is always a trial and error, isn’t it? But why don’t we start thinking outside the box and questioning the status quo? 

Questioning the status quo 

I asked Thorsten: “What if your partner wants to create a completely different solution, but is not willing to share this information with you?” 

Thorsten replied: “Hm, not completely impossible. Even if my partner earns a big amount of money with this solution, it is still based on old technology. Another aspect which supports that might be the announced new strategic partnership with a major Independent Software Vendor (ISV)”. 

I continued asking:” What if, your technology does not fit any longer into their new solution? Or they decided to develop the new solution completely on their own? Or even they plan to acquire a company with a similar technology stack like yours?” 

Considering the unknown unknowns 

Thorsten thought about it and responded: “I would exclude the option that my partner company might consider acquiring another company. We are the market leader by far and much too big and costly to acquire. But you may be right, if they really plan to create new future-orientated solutions, the current technology we are collaborating on is not helpful. But we have a couple of other technologies which could leverage that.” 

Me again: “Do the counterparts of your partner’s know about those other technologies?” 

Thorsten was not sure: “We have presented our complete portfolio to them at the very beginning of our partnership. But honestly, I am not sure if the current product manager were part of the session and, I am not sure if he could remember the content.” 

To illustrate our thinking, the Iceberg model is a good one. 

The Iceberg Model 

The Iceberg Model is one of my preferred problem-solving tools. It illustrates what is behind the curtain, to understand the origin of the problem. Only 10 percent of the iceberg mass lies above the water, the rest of 90 percent is hidden under the surface. Isn’t this the same with problems in real life? 

The four levels of the Iceberg Model 

Above the surface are the events. That is what is happening, that is what we are seeing. Thorsten recognized that the partner product manager he is working with, does not support current plans. 

The first level under the water surface are the patterns of behavior. Patterns are important to verify to understand if this is a trend or an isolated event. In this case the product manager was not supportive from the start. So, this is not an isolated event, this is ongoing behavior. 

The system structure level presents ‘the rules of the game’. The rules can be written or unwritten, visible, or invisible. They are norms, policies, guidelines, power structures, distribution of resources or even informal ways of work that have been institutionalized. Sometimes it is hard to recognize the structure, but it is driving the patterns. In Thorsten example, the structure of the matrix organization drives the pattern. The solid line manager of the product manager is not the one who gives the business direction. 

The bottom level, the mental models, are responsible for the creation of the structures and manifestation of the patterns. The mental models are the assumptions, morals, beliefs, expectations, and the values that ultimately drive the behavior of people and organizations, mostly unconscious.  Mental models are difficult to recognize because many of those aspects are never made explicit. 

The Iceberg Model, a system thinking discipline 

This Iceberg model is a good example of a system thinking discipline. Everything is connected, the event, the pattern, the structure, and the mental models. A change in one area will affect other ones. 

The Iceberg Model read top down (event – pattern – structure – mental model) helps you to identify the root cause. But, applied bottom up (mental model – structure – pattern – event) it can help you to transform the system for better event response. 

Thorsten and I were not able to figure out the mental models of his partner organization. But recognizing the structure which causes the problem, helped him planning and executing his next steps. 

The Iceberg Model is a sustainable business development tool which helps creating new business opportunities 

Thorsten asked for a one-to-one discussion with the product manager and discussed the issues recognized along the Iceberg Model. The product manager confirmed that the company had no interest in improving the current outdated solution with Thorsten company’s technology as other departments were already working on modern state-of-the-art solutions, which will substitute this solution soon. Thorsten took the chance to introduce other latest technologies and asked if this might be a better fit. The product manager was not sure but referred him to the product manager of the new solution and together they initiated a co-innovation initiative. 

As a result, Thorsten not only had to change his stakeholder matrix, by adding the new stakeholders, but also revised the whole business development plan and established a completely new business opportunity. 

Executive stakeholder relationships are part of the story, but they are not the full story 

I have been told many stories that connecting the companies’ executives do not always lead to joint successful business. And of course, I have experienced this a couple of times. 

If you want to do sustainable business with your partner or your network, you need to have relationships on all levels of you partner organization. From development to product management, service, sales, and executive management. 

Put yourself into the shoes of an executive. A partner manager suggests integrating his technology into your solution/business.  

What do you do?  

I would ask different business units and stakeholders in my company if this technology would fit technically and commercially. If the partner is not connected to my stakeholders, so that they are briefed and have already bought in, I would not make any decision. 

There always is a back story 

People in the industry always meet twice – at least. In different roles and/or companies. Be aware of that when you identify to your stakeholders. Listen carefully to people who held previous relationships or were involved in past engagements before you reach out to your stakeholders. That does not necessarily mean that you must be afraid, because of past misperceptions, but keep this in mind and start neutral. If your predecessor has tried to do joint business with one of the company’s solutions without any success, start with another one. If you become aware that one of your stakeholder executives had a difficult relationship with an executive of your partner company in the past, find a better match with other executives. Be transparent, tell your counterpart that you are aware of those past issues and find joint solutions to overcome them. 

The owner of the stakeholder relationships 

During my professional career, a few managers and executives forced me to push and chase my counterparts to get the indented result, at all costs. I never did that.  

First reason: If you do not understand the levels under the surface clearly, how can you find a sustainable solution? I could have a quick win by sacrificing the long run. I always resisted that, even if this had consequences for my bonus payments. But my strategy paid back manyfold in the long run. 

Second reason: You own the relationship. Companies come and go. Your reputation stays with you. A good one, but also a bad one. Especially when operating in The Grid, trust is a key success criterion. 

Companies only borrow the stakeholder relationship from you! 

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And this applies to all working levels, no matter if you a manager, individual contributor, or an executive. 

Lessons learned? 

To build a sustainable business relationship you do not have to look at the obvious only. Try to figure out the known unknows and the unknown unknowns. 

And, of course, you can apply this methodology to direct customer business, too.