Stakeholders are defined as anyone who is interested in, and/or affected by, your activities. The list of stakeholders of any business or organisation is therefore often extensive. It includes employees, customers, suppliers, and competitors. It also includes the owners of the business, including shareholders, especially if the business is publicly traded.
However, it also includes people who live near your facilities, or the facilities of your suppliers and customers, and anyone else with an interest, such as journalists, commentators and analysts.
Stakeholders are important because of the power they hold over your organisation. They may be able to prevent you from doing certain activities. They may also have the power to make things possible—for example, by investing in your business, or breaking down barriers to trade. Businesses and other organisations therefore need to find ways to engage with and manage their stakeholders to limit ‘blocking’ and maximise support.
The first step in this process of stakeholder management is to understand your stakeholders through a process known as stakeholder analysis.
Identifying Your Stakeholders
The first step in stakeholder analysis is to identify all your stakeholders.
Many businesses choose to use a process such as brainstorming to identify stakeholders.
You can find out more about brainstorming and similar techniques in our page on Creative Thinking Techniques.
However, the precise technique you choose is not as important as making sure that you identify everyone—and that means involving plenty of people from within your company.
People from the marketing department will have a different list of contacts than those in sales, or operations—but all these contacts are stakeholders. Similarly, the board may have a very different view of who matters to the business. Make sure your list is as complete as possible.
At this stage, you are not looking for who is important, only who is interested in the organisation.
It is better to include people at this stage, and later discard them, than to exclude them now.
You can and should therefore include anyone with an interest, however small.
It is also a good idea to use a considerable degree of detail. For example, you might identify ‘customers’ as a group of stakeholders. However, not all of your customers are equal in their impact on the business. If you have some that are particularly important, you should list them separately—or at least separate them out by size or impact on the business.
There is more about separating groups of customers in our page on Customer Segmentation.
It is also a good idea to identify your key contact within any organisation. This is because ultimately, stakeholder management requires communication—and you need to communicate with individuals, not whole organisations.
Segregating Your Stakeholders
The next step in stakeholder analysis is to segregate your stakeholders by looking at two factors:
Their power or influence over you and your activities; and
Their level of interest in you and your activities.
You can do this using a matrix like this:
Place your stakeholders within the grid according to their level of interest and influence.
Someone (or an organisation) with high influence and high interest will be in the top right grid. For a high profile but internal project, this might be your board member.
Those with high influence but little interest are in the top left. This might be, for example, other members of the board, or local or national media for non-controversial projects.
Those with high interest but little influence are in the bottom right. They might include individual customers for a big company.
Those with low interest and low influence are in the bottom left.
Remember that both influence and interest are relative.
‘Low’ does not mean ‘no’. It only means ‘less than someone else’.
It is a good idea to start by identifying
- your most important stakeholder
- your most interested stakeholder
- your least important stakeholder
- your least interested stakeholder
(and remember that these categories are not exclusive—the same person may be both your most influential and least interested stakeholder).
You can then assess all other stakeholders against those four to decide where to place them in the grid.
Do not consider any placing as final. Be prepared to move people around the grid as it develops, and as you assess and reassess influence and interest.
Once you have placed all your stakeholders, review the grid to make sure it makes sense as a whole.
If not, move people around again until you are satisfied.
WARNING! Check with others
Like your list of stakeholders, your grid needs to be checked with everyone in the organisation to make sure that they agree.
No single department will understand the complexities of all the organisational relationships, so you need to check with everyone.
Agree Your Strategies
Broadly speaking, there are four main strategies used for managing stakeholders, based on this matrix:
High interest, high influence: Manage closely
This is the group with the biggest say in your project, so you need to engage them fully, and ensure that they are kept both up-to-date and satisfied at all times.
High interest, low influence: Keep informed
This group may have fairly low influence, but they can almost certainly make a noise if they are unhappy. Keep them fully informed about what you are doing, and make sure that there are no major issues arising. This group is often extremely helpful in working through detail, so may actually be really good to engage very closely.
Low interest, high influence: Keep satisfied
You need to provide this group with enough information that they remain happy, but not so much that they get bored, and switch off. You want them to know what you are doing, and be comfortable with it.
Low interest, low influence: Monitor
Keep in touch, but light touch, and make sure that they have what they need, but no more.
At this stage, take another look at your grid, and make sure that you agree that everyone is in the right category—that is, that you are going to apply the correct strategy.
It is at this point that disagreements about influence and interest may emerge between departments.
For example, individuals may disagree about the information requirements of a particular stakeholder.
At this stage, you can go with the majority view, or err on the side of caution and provide more information.
Alternatively, you could actually ask the stakeholder about their wants or needs—which may turn out to be a much better idea.
Understanding Your Stakeholders
The final step is to understand more about the views of each of your stakeholders.
In particular, you want to know who supports your project, and who is a potential opponent to progress. You also want to know what, if anything, would persuade those opposing the project to change their mind, and how your supporters might be able to help you.
It is also useful to know on a general level who wants more information—and on what subjects—and who is generally happy with less.
To find out, it is useful to:
Ask around within your organisation, especially among those who have a lot of contact with each stakeholder; and
Ask the stakeholders themselves. Most people are happy to talk about what they want from you, including whether they support your project, or would like more information about particular issues. This will also help you to understand if there are particular interests among your stakeholders, and if so, how to manage those.
Once you have this information, add it to your grid. One good way is to colour-code people (for example, green for supporters, red for opponents, and black for neutral). You can then see where your supporters and blockers ‘sit’. This will give you useful information about what you might need to do to get your project moving.
For example, if all your supporters are low interest and low influence, and all those wanting to block the project are in the top right of the grid, you can see that you will have trouble.
However, this is a very unlikely scenario.
You are more likely to see that some of your potential supporters need more information before they are fully able to back you, and/or that some of your ‘blockers’ may be persuaded by more information, or a minor change to the project. This will enable you to remove some of the barriers to progress.
You may also be able to see which of your supporters may be effective in persuading some of the project’s opponents to change their stance.
This will therefore give you useful first steps in moving your project forward.
Updating Your Analysis
The final step in any stakeholder analysis is to keep it up to date. People’s opinions and views change over time—and especially as projects change and develop.
Influence and interest can also change over the course of a project. For example, some people may have more interest in a particular stage, or their influence may wane if a key stakeholder moves on within the organisation.
Keep in touch with your stakeholders, and make sure that you are providing the necessary information at all stages, and that nothing has changed.