Cross-Border Stakeholder Management (the Last 5 Percent)

Recently I was walking in Patna, the main city of Bihar, India, on my way to a meeting with a departmental secretary in the state government. I walked on the side of the road, against the flow of traffic. And just because I was walking against the traffic did not mean I had only to watch out for oncoming traffic. Far from it. I had a reasonable chance of being run over from behind as cars and motorbikes frequently drove the wrong way up the road. Day-to-day life was definitely different to what I knew from living in Australia.

Having spent a year in Bihar, I had come to feel at home in India. I found India similar to South Africa, the country I grew up in. Both countries have a “can-do, make-do” attitude, and people are allowed to do their own thing. If you get hurt or killed because you’re being stupid, then that is on you and you don’t get to sue everybody that you can think of.  Australia is different. It is a world where the government tries to legislate safety into every facet of life. Folks are often heard referring to Australia as a nanny state or a nation of headmasters. This quality does not make Australia an unpleasant place to live. On the contrary, it is very safe country with a great social safety net. A calm, well-structured, predictable society.

And importantly, for me, Australia represented “normal.” It was my yardstick.

Somewhere along my walk I realised that Australia was the odd one out. Australia does not represent normal. If anything, it represents abnormal. It belongs to a minority group of countries, each of which has an advanced social and physical infrastructure. A common characteristic of these countries is that day-to-day life is stable and predictable. Stability provides a secure platform for business and allows change and business managers the luxury of worrying about the smaller things—the cohesiveness of a stakeholder message, the quality of a PowerPoint pack, dress codes, whether staff should take the train or a cab to the airport when travelling, and if staff crossed at the traffic lights in accordance with the safety policy. Or in other words—the last 5 percent.

As an example, working in Australia, I was critiqued in my role as a change manager because a senior stakeholder was given the same briefing from two different change champions. Ideally, you don’t want this to happen, but in the greater scheme of things it is a small issue, a first world problem—the last 5 percent.

By comparison, countries like India are in the majority. These countries are still wrestling with how to develop the basics of their social and physical infrastructures. They are characterised by inadequate sanitation, limited access to clean water, poor heating, questionable health services, excessive bureaucracy, corruption, and an inefficient legal system. For the sake of a label, I term these countries the first 50 percent. For countries in the first 50 percent, day-to-day life is neither predicable nor stable. A bus trip to work could take one hour or six hours. There is no way to know except to take the bus and find out. When you cannot rely on the social and physical infrastructure, you live with a high degree of uncertainty. In Australia, I could travel for business, confident in the knowledge that if a family member needed emergency medical treatment, it would be readily available. The infrastructure would mobilise and my family would receive excellent medical attention. In the first 50 percent, this support is not readily available. Families rely on each other, and in an emergency, it is the family that must immediately respond. It could have disastrous consequences to leave the emergency in the hands of the social infrastructure.

I re-examined a question I had been asked twice in my consulting career: how would you deal with cultural differences with respect to stakeholder management on an international business improvement program? In each case, my answer was strong enough for me to get the role, but with hindsight, I recognise that the question and my answer were both off-target. The question should have been: using the simple definition of culture as “the way we do things around here” and applying it at a state or country level, how would you deal with the operational differences arising in each country as they impact the transformation program?

This wider definition recognises that “the way we do things around here” is largely defined by the (un)predictability of the social and physical infrastructure and that consequential business operating models cater for the degree in variability in either the last 5 percent or the first 50 percent.

What this means for cross-border stakeholder management is that the standard issues of cultural awareness such as presenting a business card with two hands, whether you sit women next to men, whether you wear a head scarf or hat, or if you use formal titles for people you know well, are of lesser concern. What is more important is to understand and respond to how things operate in each market—the physical aspect of “the way we do things around here.”

Any consideration that individuals from the first 50 percent cannot perform at the highest levels expected by the last 5 percent is completely unwarranted. That notion is fully debunked by the performance of almost every person who has physically moved to a last 5 percent working environment. Equally, the impact of the local constraints is often evidenced when a last 5 percent manager moves to a first 50 percent market and is unable to perform at the same level as they achieved in the first 5 percent market.

Consider, two countries, two companies. For the sake of the discussion, country A represents a last 5 percent company and country B, a first 50 percent company.

Country A, Company A                                                   Country B, Company B

Pie-G      Pie-G

The companies are part of a market. Each market has its own culture and each company works effectively within that market. For me, the markets are loosely characterised as follows:

Pie-Cgrey        Pie-Agrey

These cultural norms are reinforced as each company interacts with other companies in the market. I define “market” as any business community working with the same constraints as your own.

Pie-Dgrey      Pie-Bgrey

Market A                                                                  Market B

Each company understands the rules of the local market and the constraints of the local operating environment. This includes tender processes, logistics, payment terms, corruption, and what is generally acceptable behaviour.

The two markets work well when independent of each other. Issues only arise when the two environments are forced to operate as if they were the same business, as is often the case when a company outsources a business function.

Pie-Fgrey

In this example, company B is contracted to act as if it is company A. Staff based in the last 50 percent are expected to think and behave as if they are working and living in a last 5 percent country. This expectation is unrealistic. How does a person who deals with two or three power failures a year understand a person working in an environment where they can be a daily occurrence? Can a person who has only ever lived in the last 5 percent understand the priorities of a person who may work in a modern city, but has an ancestral home that has no running water or flush toilets? How does a first 50 percent person understand why a last 5 percent person gets upset because the closest printer to them is not working?

Differences in the social and operational infrastructure in each country have a material impact on how easily staff engage with the nuances of a business improvement project. It is easy to understand why a person who has just caught three buses to work because (once again) their train never showed up, or (once again) they had no breakfast because their water tank failed to fill overnight or because their suburb was (once again) hit with a rolling blackout, would be less concerned with a conversation on whether a manager should have seven or eight direct reports. You can hear them screaming—let’s deal with real issues.

The most significant consequence of working with either an advanced or developing physical and social infrastructure is how each community respects time. The last 5 percent are driven by time. Meetings are expected to start on time; action plans are agreed with an anticipation that the actions will be executed as agreed. Month-end runs to a schedule and the quarterly reporting cycle is predictable.  Conversely, the last 50 percent do not hold time in such high esteem. It is not because they don’t want to, but rather because, as much as they might want to be punctual, business has learnt that the inadequacies of the infrastructure mean that life is not always predicable. A phrase frequently heard in India is IST, Indian standard time, actually means “Indian stretchable time,” as a disparaging comment on the frequent lack of punctuality. Other examples include, “there is no rush in Africa,” or “it’s Island time.” For these markets, there is always a negative impact on productivity.

For a program manager, having a team that has a degree of indifference to the clock is frightening. The most basic requirement for effective stakeholder management is:

Do what you say you will do, when you said you would do it.

In other words, be reliable and consistent.

When a change program loses faith in time, then everything begins to drift. When the senior stakeholder group loses confidence in the business improvement team’s ability to manage to schedule, the change program loses credibility.

The interview question remains unanswered: how do you manage stakeholders when working with or in the first 50 percent?

A better answer to the question would be that first 5 percent should take the time to build relationships based on trust, respect, and a firsthand understanding of the local conditions.

I am quite confident that any program manager would quickly argue that they are a team player and that they respect relationships. I am not talking about being extra polite to each other, or having a sharing session at the start of a workshop. Rather, I am talking about taking one or two months to build a team that fully understands the constraints and pressures experienced in each market and then resource the team appropriately.  The phrase “walk in their shoes” is highly relevant. It takes time to understand the local market.

The last 5 percent tend to treat everyone equally and adopt a highly professional approach to business: “you don’t have to be my friend, just do your job.” This approach works well when working within the same market, but is unlikely to work with the first 50 percent.

For the first 50 percent, strong relationships are the glue that holds everything together as the operational difficulties ebb and flow. When you can’t rely on the local infrastructure then all you have left are relationships. Strong relationships build the confidence to rely on each other to help as needed. To go the extra mile when time slips.

My recommendation is that the program manager rents an apartment in the local city for a month and lives as a local. This will earn the respect of the local team and establish insights that cannot be gained from the safe cocoon of a hotel. A firsthand understanding of the local challenges, combined with the ensuing deeper relationships, will mitigate many of the risks facing the change program. Firsthand experience will be invaluable when reviewing issues with the program timeline or budget with senior stakeholders. The reverse applies for the key staff working in the last 50 percent. They need to spend a month in the last 5 percent working environment to understand why managers from that market demand the level of “finish” that they do.

By way of simple example, a company operating in a first 5 percent market was engaged for a project in Saudi Arabia. Despite all the best practice followed when putting the budget and timeline together, they failed to realise that they would frequently encounter situations where the project team could not easily meet with many of the stakeholders as they worked in female-only rooms. When the original project plan was put together, the team evaluated the standard project risks, but did not consider that they would not have free access to the stakeholders. When the client reviewed the plan, they did not call out this restriction as it is such a normal part of their work environment it was not worth mentioning. The consequence was that both extra time and budget were required.

This is a simple example, but it does illustrate the value of in-country experience when establishing a new international business improvement project.

I close with the observation that international projects are generally led from last 5 percent countries. Investing time to build strong relationships founded on a proper understanding of each market, at the start of the change program, will build trust and mutual respect. Trust allows teams who are suffering the “tyranny of distance” that is common in international projects to raise issues earlier and more honestly. This, in turn, will more than compensate the additional costs invested at the start.

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