Research: Penta-helix stakeholder management

The way stakeholders are engaged can make a great difference in how a project is developed, in how a problem is perceived and can distinguish between on the one hand confusion, friction and frustration or on the other the alignment of views. The Penta-helix is a simple discussion tool to map interests and explore ways of keeping a project balanced. Regardless, while it may seem simple, it can help to quickly unlock or explain social complexity while allowing stakeholders to understand the importance of alliances and team playing.  In this long post, we’ll describe where the Penta-helix emerged from, how it can be used and what the five stakeholder types look like.

OSMOS penta helix-01

The ‘Penta-Helix Model’ is based on five stakeholder types: businesses, public authorities, civil society, the knowledge sector and capital (and finance). The model is very useful for managing actor-based complexity.  It firstly helps to analyse a mix of stakeholders; those that may be actively involved in the project (actors) and others that are involved due to the nature of the project (interest groups) such as public authorities or neighbours. Secondly, as this model deals with samples of stakeholders, it is not necessary to name stakeholders but rather explore the type of relevant stakeholder (for example small shop-keepers or regional environmental officers).  Each type of stakeholder can be represented at different levels: the local (or micro), the regional (or meso) and the national/international (or macro) level. This can also changes the type of interest.

Background

The Penta-helix concept builds on two previous innovation focused models: the Triple and the Quadra-Helix.

Triple Helix

The Triple Helix that can be traced back to post second World War technical innovation, noting the importance links between knowledge, industry and the public sector. This trilogy of actors are rather obvious and co-dependent: the public sector uses its tax base to fund knowledge institutions to research innovative technologies and products, the business sector commercialises them and finally the public sector reaps the rewards through tax returns. Smart-phones would have remained a caricature on Star Trek and never revolutionised the communications industry had it not been for public research investment.

“The Triple Helix thesis is that the potential for innovation and economic development in a Knowledge Society lies in a more prominent role for the university and in the hybridisation of elements from university, industry and government to generate new institutional and social formats for the production, transfer and application of knowledge.”  University of Stanford’s Triple Helix research group*.

The point is that knowledge requires firstly the public sector to support experimentation and R+D, taking an almost blind risk that businesses would never make.  Likewise it needs the public sector to develop the conditions or demands for innovation – particularly in terms of communications, transport and resources.  The military is a good example of this, that were experimenting with technology appearing decades later in ones smart-phone (yes Steve Jobs owes his gratitude to the military).  Once the conditions for experimentation and development are created, the natural remaining partner is business that can find a practical way to release the product to the market.

Quadruple Helix

The Triple Helix is rather generic however if the innovation cares about people, then users must belong to the stakeholder list.  The problem with the Triple-helix is that the trilogy assumes they know best for the market.  Not everyone wants to have the same plates, clothes or colour television. The late 70’s brought about a wave of the ‘individual collective’ that was hard for both retailers and politicians to account for.  Evidently people (consumers) matter.  This introduced an additional stream into the helix, the users, thus creating the Quadruple Helix.

The Quadruple Helix is no longer four isolated groups but rather ‘stakeholders’ each have a valuable contribution to be made within an R+D project.  “Creating Local Innovation in a Quadruple Helix” – an EU funded FP 7 project looking into local innovation (read more here*).   The Quadruple Helix brings these actors closer together and has brought the conversation down to the ground. However the fourth dimension, the users, appear to be treated as consumers/users for local business innovation and services rather than genuine partners for co-creation and to build on place based knowledge.  It is also a model that is very appealing to the IT industry rather than place-based issues where money and entrepreneurship pose quite different interests.

From business to complexity

A final step to reach the ‘penta’ is the distinction of capital and business — both represent quite different stakeholders. Business stakeholders are often agressive, competitive, take risks and are prepared to fail. Capital, including finance and ownership of resources, is much more risk averse and tends to involve small incremental change.

This has meant that the Penta Helix can go far beyond R+D, technology and science and enter into a spatial dimension involving innovative business models, social networks, wicked problems and so on. The Penta Helix is thus an ideal tool for working with complexity and economic models, rather than consumer/market driven business innovation models.

Stakeholder interest + relations

Stakeholders that are driven by too many interests can disrupt a project by not being clear about their objectives. But it is impossible to say that you are only interested a few things: we have driving interests and supporting interests. This all is relevant to context. Stakeholders generally prioritise one interest over others. Professional knowledge, career, wealth and home are generally the the strongest interests motivating stakeholders. It is useful to establish what a stakeholders’ professional motivations are and if their personal interests will play a strong role.

A second issue is stakeholder relations. It is quite normal that stakeholders bring personal or institutional friction that can stifle building positive relationship. Opportunity always creates the most effective bargaining chip — where a stakeholders have a perceived sense of gaining then personal issues can be overlooked and revised.

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Application

One can easily be overwhelmed by the possible list of interests and stakeholders.  We do not intend to map every person but rather focus on those that have a role in change. When discussing stakeholders, we use serious play to explore possible relevant alliances and relationship.  See the Porte de Ninove game (pictured above) which puts fun before business.

OSMOS stakeholders

The following scheme can be used to explore stakeholders within a group.  Sketch the scheme on a sheet of paper and use post-it notes to explore where stakeholders fit into the general picture of the project/problem/site.  It will quickly become apparent where the gaps lie or where possible conflicts may emerge through overlaps.  Later explore their level of interest, power and commitment to help gain a better picture of the main actors and those necessary to be involved.

The five stakeholder types

There are no fixed rules for who fits into each stakeholder category as this will depend entirely on the configuration of the actors within the circumstance.  For example, stakeholders may represent the local community in one context while a regional scale in another.    The following descriptions give an indication of how to distribute the stakeholders.

CAPITAL + financE

This group includes the owners of key assets (landlords, public owners of land or buildings), private investors, investment funds and banks. They are typically few in numbers, but their power and influence tends to be high: without their cooperation, even the most inspiring ideas have only a small chance of being implemented. The interests of this group of actors can vary: some are driven by long-term stability (such as most pension funds), others can be motivated by short-term returns (like hedge funds). It is also not uncommon that the owner of a building or piece of land is interested in other things than money and takes pride that his or her property contributes to the common good… 
Business community
This group refers to businesses (corner shop, butcher, bakery, etc) and their representatives; it also includes businesses like cooperatives, lawyers, accountants and other professionals. Some businesses are locally anchored; others are national or even international undertakings. In urban planning, one of the most influential type of business are building and land developers. The interests of this community will depend on how the project will affect them: will it bring new customers or new competition? Will it provide opportunities to grow, or obstacles for their future development?
Practitioner community
With this term we refer to practitioners with knowledge and experience that is relevant for the development of the project. This can be a local resident with expertise in innovation and knowledge (architects, engineers, scientists, doctors and health practitioners, geographers, educators…) or the staff of schools, universities or research organisations interested in development or a local food cooperatives interested in innovation. In addition to place-based practitioners, there is also a series of national and international actors who can contribute knowledge and experience, such as research organisations, lobbying and advocacy groups or consultants. While members of this group often express strong opinions towards a new project, it is not uncommon that the opinions of different practitioners diverge…
PUBLIC AGENCIES

This group includes municipal administrations, publicly funded cultural organisations, police, hospitals and other public services. In bigger cities it also refers to public development agencies and utilities. At national level there is the national government and its agencies and administrations that are relevant for the project at hand. These public agencies are typically interested that existing rules and regulations are respected, but their political heads will also have an interest that developments are in line with their visions, strategies and agendas…
CIVIL SOCIETY & COMMUNITIES OF INTEREST

Actors in this group include local community groups (social, health, cultural, religious etc), sporting and social clubs, NGOs based on community issues, trade unions and international NGOs. Their interests will be driven by what is important to the residents, like a healthy and safe environment that provides the services and amenities that residents value. It can be challenging to take the interests and motivations of residential communities into account: often these interests are articulated by a handful of outspoken individuals that act as community leaders, but do they always correctly reflect what the other people in the community want?