Stakeholders and Risk

One of the interesting similarities between stakeholder management and risk management is the challenge of knowing what we know and more importantly understanding what we don’t or can’t know.

An enduring part of Donald H. Rumsfeld’s legacy will be his somewhat garbled comment at a DoD news briefing in 2002: “as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” Despite the wide spread ridicule these comments have attracted, Rumsfeld was right!

The challenge in both risk and stakeholder management is to identify the things we don’t know. This is made more important because what we don’t know about key stakeholders may constitute a significant risk to the project or business.

Plotting what we know in terms of our knowledge of the person’s wants expectations and attitudes in one dimension and how aware we are of that knowledge in another offers four possibilities.

The Knowledge / Awareness Matrix

The consequences of the four quadrents are:

• Management Zone: When we are aware of our knowledge proactive management is possible. We know we know and can take appropriate actions. This is where tools such as the Stakeholder Circle® are at their most useful.
• Risk Zone: When we are aware that we don’t know something, we can assess the implications and invest effort as needed. This is the zone traditional risk management works best in and we can use risk management techniques to asses the probable impact of our lack of knowledge and take appropriate actions to mitigate any undesirable consequences.
• Research Zone: We don’t know we have access to knowledge that we could use ‘if we ask the right questions’. This zone is created by amnesia, inexperience and false assumptions (eg, assuming you cannot ask someone a question). Research and experience minimise this quadrant. Facilitated processes such as brainstorming, affinity diagrams and focus groups can help to unlock the knowledge that exists and allow it to be used effectively.
• Reactive Zone: We don’t know we need to know. Particularly with people, there can be many issues problems and opportunities that you are simply unaware of. This area cannot be managed, you have no knowledge you need to be managing something. When issues and opportunities arise you need to be ready to react quickly and there needs to be processes in place to regularly scan the overall stakeholder environment to identify emerging opportunities and issues as early as possible.

Effective stakeholder management is focused on moving all of the key and important stakeholders into the Management Zone. However, you can never be 100% certain you know everything about everyone that matters and need to regularly review the other three quadrants to identify opportunities and minimise issues.

Several thousand years before Rumsfeld, Confucius said: To know that we know what we know and that we do not know what we do not know – that is true knowledge. Given the continually evolving nature of the stakeholder community surrounding any endeavour, achieving true knowledge is always going to be a major challenge.