Effective Stakeholder Management: The Key to Implementing Category Strategies

Effective stakeholder management is crucial for the success of procurement category management. Yet many procurement teams struggle to involve stakeholders in the strategy creation process, leading to suboptimal outcomes. This lack of engagement diminishes the effectiveness of strategies and undermines their implementation.

This blog will explore why stakeholder management remains a challenge, its critical role in category strategies, tools to enhance engagement, actionable steps to improve these skills, and how Cirtuo embeds stakeholder engagement in category strategy development.

Research shows a systematic challenge with stakeholder engagement

Category management isn’t a solo endeavor—it’s an orchestral performance requiring collaboration across diverse functions, departments, and geographies. Stakeholder management lies at the heart of this process, yet it’s often an underdeveloped skill within procurement teams. As a result, category strategies fail to deliver their full potential due to misalignment with or lacking buy-in from key stakeholders.

The 2024 Category Management Report by Future Purchasing underscores the importance of stakeholder engagement, stating, "It is the only way to access the extensive range of value levers that stakeholders manage, such as specification optimization, demand management, and supplier integration. These drive major category changes and unlock the full value available. Without stakeholder involvement, procurement teams have limited impact."

The report also reveals two very worrying statistics that demonstrate the systemic challenge procurement is facing:

Furthermore, behavioral skills—such as storytelling, strategic thinking, influencing, and active listening—are rated as only 66% embedded in procurement teams. These gaps highlight the urgent need for a deeper focus on stakeholder engagement and the soft skills required to succeed. The free 2024 Category Management Report is available for download.

Why stakeholder management remains a challenge

Effective stakeholder management requires bridging divides—between procurement and other departments, as well as within procurement itself (think global vs. local). Procurement often struggles to engage stakeholders effectively when creating category strategies for multiple reasons:

Negative perceptions of Procurement hinder collaboration: Many stakeholders see procurement as a bureaucratic roadblock, slowing down processes with rigid rules, not as a proactive function involving them in defining strategies. This is especially true if Category Management is not formally embedded or new to an organization.
Lacking business buy-in to Category Management: Strategies developed without stakeholder insights lack relevance and alignment, undermining their effectiveness. Without a formal engagement process, procurement professionals may fail to articulate the importance of stakeholder input in the strategy development process and its implications for the business. The 2024 Category Management Report found that only 21% of respondents believed stakeholders had adopted their category management process, and only 14% have an excellent understanding of Category Management.
Absence of formal business partnering framework: No consistent approach and toolkit exists for identifying, engaging, and communicating with business stakeholders. This means each Category Manager has to develop its own approach and tools for engaging stakeholders, resulting in inconsistency across the organization.
Avoiding conflict from competing priorities & objectives: Stakeholders often have goals that may not align with procurement’s objectives. However, even within stakeholder and procurement teams, objectives between global teams and local markets can differ, creating friction and a need for alignment.
Underdeveloped soft skills: While many procurement professionals excel in areas like sourcing and negotiation and are comfortable relying on data, they often fail to create compelling narratives about the strategic importance of their initiatives. Lacking soft skills like storytelling, influencing, and conflict resolution. Stand in the way to connect with stakeholders and win them over.

Strategies that fail to include stakeholder perspectives are misaligned with business priorities, lack buy-in, and most likely face resistance during implementation. The result? Wasted effort, lost value, and diminished trust in procurement. “Strategic Business Alignment is the foundation for successful category management as procurement, category, supplier, and negotiation strategies need to be derived from and aligned with them”, says Drasko Jelavic, CEO & Founder of Cirtuo. “That’s why our methodology embeds them in various ways throughout the strategy development process.”

The role of stakeholders in category strategy creation

Engaging stakeholders is essential at every stage of the category strategy lifecycle. While most steps of the strategy development process are performed by Procurement, getting input from stakeholders is crucial to give direction and validate ideas.

Internal analysis and business requirements: In the initial phase of the strategy development process, collaborating with stakeholders helps to understand needs, constraints, and business priorities. Tools like stakeholder maps help to identify key players and their influence, whereas the RAQSCI (Regulatory, Assurance of Supply, Quality, etc.) framework supports the structured capture of business requirements and priorities.
Strategy development & objectives: Incorporate stakeholder feedback and ensure alignment of appropriate value levers when creating category plans. Use storytelling to connect data, business requirements, and suggested value levers through relatable narratives.
Initiatives & implementation: Involve stakeholders in communicating defined strategies across the organization, tracking progress, and addressing challenges during execution. Establish mechanisms for continuous feedback and improvement to adapt to evolving environments.

"Without stakeholder involvement, procurement teams have limited impact," says Mark Webb, Managing Director at Future Purchasing. “Aligning strategies with stakeholder priorities is not optional—it’s critical for success.”

Practical tools to enhance stakeholder engagement

To aid Procurement teams in improving their approach to stakeholder engagement and foster better relationships, these practical tools can be leveraged:

Stakeholder Mapping: Identify stakeholders based on their influence, interest, and impact on category strategies. This visual aid will help organize voiced priorities or concerns.
Communication Needs Assessment: Understand stakeholder preferences for communication (e.g., frequency, format, and channel). Tailoring your messaging to individual preferences and needs will resonate more with their priorities.
Business Requirement Mapping: Leverage the RAQSCI framework to collect business requirements from various stakeholders and/or business units and visualize differences and commonalities. This will enable discussions around requirement alignment and help uncover different interpretations of stakeholders' needs and wants.
Stage-Gate Processes: Introduce checkpoints for stakeholder validation and approval during the strategy creation process. Gates can be defined to align with the relative importance of categories.
Storytelling Frameworks: Use narratives and stories to illustrate how category strategies address business challenges. Combine data-driven insights with compelling examples and a succinct structure to capture and keep your audience’s attention.

Developing skills for effective stakeholder management

Procurement has historically focused on training hard skills around sourcing, contracting, supplier management, or negotiations but has failed to address softer communication, influencing, and conflict resolution skills. To improve stakeholder engagement, procurement professionals must focus on developing key behavioral skills for winning over stakeholders:

Active listening: Seek to understand stakeholder concerns without interrupting. Reflect on their input and paraphrase it to demonstrate understanding. Ask clarifying questions to dive deeper into their expectations and separate needs from wants.
Storytelling: Data alone may not persuade stakeholders to engage. A compelling story connects the dots between procurement’s goals and the stakeholders' objectives, highlighting mutual benefits and creating a sense of shared purpose. The narrative needs to highlight the problem, solution, and outcomes to make strategies compelling. By using relatable examples, stakeholders can connect with the story emotionally.
Conflict resolution: Constructively address disagreements, objections, and differing objectives by focusing on shared goals and challenges. Use empathy to navigate difficult conversations and complex interpersonal dynamics.
Influencing and persuasion: Build trust by consistently delivering value. Present category strategies as solutions to stakeholder problems and build consensus that the strategy aligns with their goals.
Emotional Intelligence: Invest in learning to manage your own emotions and read others’ cues. Recognizing that different stakeholders have unique preferences and adapting your style in response will build trust and connections.

Improving these skills will help Category Managers be more confident and convincing when approaching stakeholders to gain their support and buy-in to value levers and strategies. To learn more about the effectiveness of this approach, watch our webinar with Walmart and Mars on ‘Winning over stakeholders: Achieving strategic alignment in Procurement.’

How Cirtuo embeds stakeholder engagement in Category Management

Cirtuo has stakeholder engagement in its DNA and has embedded helpful tools across the category strategy development process. This makes involving stakeholders a natural part of the process and helps category managers overcome some of the abovementioned challenges.

Cirtuo provides category managers with these stakeholder management tools and methodologies:

Stakeholder mapping: Guided Strategy Creation Pro offers a dedicated module for identifying, capturing, and prioritizing key stakeholders relevant to the category and aligning their input with strategy goals.
‍Business requirements gathering and alignment: To ensure strategies are well aligned with business objectives and stakeholder requirements, an entire module is dedicated to capturing, ranking, and aligning business requirements according to Cirtuo’s unique GRAQSCIED framework. These inputs are the foundation for recommending value levers during strategy creation later in the process.

Stage-Gate Process: Cirtuo allows companies to define approval steps that align with their expectations for approving different elements of the strategy development process. This Stage-Gate process increases the governance over the strategy development process and ensures stakeholder buy-in for the progress and direction of the strategy.

Monitoring and Accountability: Cirtuo allows the assignment of tasks and initiatives to stakeholders, ensuring engagement and accountability from strategy development through execution.
Interactive collaboration: Across Cirtuo, stakeholders are invited to co-create the strategy and actively provide input. Through features for aligning business requirements and value levers or signing off different stage gates, stakeholders are actively involved and can collaborate throughout the evolution of the strategy.
Integrated storytelling: Cirtuo supports category managers in crafting persuasive narratives in multiple ways. It uses GenAI to summarize user inputs or to structure provided content. At the end of the strategy development process, Cirtuo offers a strategy summary where category managers can select the most relevant sections of the strategy for presentation. This part can be tailored to individual target audiences and is supported by Cirtuo’s AI assistant to define the most impactful structure.

Involving stakeholders is an integral part of the strategy development process in Cirtuo. By providing tools for identifying stakeholders, collecting their requirements, and aligning value levers and options, Cirtuo simplifies stakeholder engagement. This approach ensures greater alignment and support across the organization, thereby making category strategies actionable.

Conclusion

Effective stakeholder engagement is the cornerstone of successful category management. It is more than a best practice—stakeholder management is a critical success factor for Procurement. By addressing common challenges, leveraging tools, and developing essential soft skills like storytelling and active listening, procurement teams can transform stakeholder relationships and drive better outcomes.The 2024 Category Management Report highlights the importance of co-creation and alignment and underscores the value of stakeholder engagement. Organizations that prioritize stakeholder engagement are better positioned to create category strategies that align with organizational goals and deliver value. With solutions like Cirtuo, procurement professionals can seamlessly integrate these principles into their workflows, ensuring improved relationships and sustainable success.Contact us to learn how Cirtuo can make your category strategies actionable by elevating your stakeholder management capabilities.