What is stakeholder management?
The first step to good stakeholder management is understanding what a stakeholder is. A stakeholder is anyone who has a vested interest in the success or failure of your project. This includes the project sponsor, the project team, senior management, customers, and anyone else who will be affected by the project’s outcome.
Once you have identified all stakeholders, the next step is to assess their level of interest and influence. This will help you to prioritize your communications and engagement with each stakeholder. For example, a project sponsor will have a high level of interest and influence. In contrast, a low-level stakeholder may have a low level of interest but a high level of influence.
Once you have identified and assessed all stakeholders, the next step is to develop a communication and engagement plan. This plan should include how you will communicate with each stakeholder, what information you will share, and how often you will engage. Stakeholder management is an important part of any project.
By taking the time to identify, assess, and engage with all stakeholders, you can ensure that everyone is aware of the project and its objectives and that everyone has a chance to provide input and contribute to the project’s success. Now that you have a basic understanding of stakeholder management let us learn more about why we shouldn’t ignore this aspect as leaders.
Why stakeholder management matters to your business
What your stakeholders say about your company directly impacts the business. Diffusing any negative perceptions of your stakeholders is necessary as it can create a virtuous cycle. If we focus on important issues for the stakeholders, we can create goodwill and expand the business. Being proactive in environmental, social, and governance issues can help grow stakeholder capital.
Committing to sustainability, good governance, and CSR (corporate social responsibility) activities by being a good force to society can redeem companies to their stakeholders. Building trust with your stakeholders is essential as falling into their bad books can cause damage to the company. However, it should not be a PR exercise as there are several reasons why stakeholder management is important for businesses, such as:
It helps businesses identify and understand the needs and expectations of their key stakeholders.
It helps businesses develop and implement strategies to effectively engage with their stakeholders.
It helps businesses build and maintain strong relationships with their stakeholders.
It helps businesses resolve conflicts and issues that may arise between them and their stakeholders.
It helps businesses ensure that their stakeholders are kept informed and updated on the latest developments within the business.
