Cultivating Relationships For Results: What is Stakeholder Management?
Cultivating Relationships For Results: What is Stakeholder Management?
Stakeholder management is the process of nurturing reciprocally favorable relationships between an organization and its stakeholders.
A proactive plan, this is done systematically by identifying and analysing their needs and expectations; and followed with a prioritized approach to planning and engaging with them. A robust stakeholder management system will be integrative to the organization’s broader vision and the intentional and coordinated interactions are designed to strengthen the status and quality of your relationship with various stakeholders.
Identifying and assessing the priorities and interests of your stakeholders provides a higher probability for success based on the in-depth understanding of your stakeholders and determining the best approach to invest in the relationship building.
1: Starting with a Strategic Lens
Be strategic and clear when designing your stakeholder plan to reduce time wastage and unproductive outcomes. This will enable you to optimize and dedicate resources to cultivating the right relationship for the right outcome.
Before you identify your stakeholders, there are some questions that might help you find the answers you are looking for -
- Who are the stakeholders who have a vested interest in the project or initiative?
- What are the roles and responsibilities of the stakeholders, formally and informally?
- How would the success of the initiative impact them, their performance and reputation?
Having a strategic lens can help you come up with different strategies when working on a stakeholder identification strategy. It can also help you with examining the flow of information to meet your goals and objectives.
2: Understanding Your Stakeholder
The key to a successful stakeholder engagement is to start with a good understanding of your stakeholders.Invest in time to have an in depth dialogue to understand their premise, principles and purpose.
Make a comprehensive list of the potential stakeholders and begin assessing them.
Step - 1: Determining Your Stakeholders
Beyond working titles, see beyond hierarchy or formal titles to determine the possible stakeholders to be involved. In some organization that are flat and informal, junior levels personnel may have high decision making power compared to a large, traditional or hierarchical organization.
Brainstorm alongside your team with an enlistment of possible stakeholders for the project.
Step - 2: Mapping the Stakeholders Profiles
When stakeholders are mapped, it creates a prioritization and validates the type of engagement needed. Stakeholders should be managed as per their mapping. It’s a risky mistake to engage and manage all the stakeholders in the same manner. For example, a stakeholder with high influence requires a different strategy for engagement than one with low influence.
Categorizing stakeholders can be beneficial with holistic insight because-
- You will know what amount of time you have to spend with each stakeholder.
- Which stakeholder is more interested in your project and why.
- The issues the stakeholders are currently dealing with.
Usually, a visual depiction of the range of stakeholders, typically using power or influence and interest, there are four quadrants grid comprising the following profiles:
- High Power, Low Interest: Due to their power, they have a strong influence in the organization. So, it's best to find a way to keep them satisfied. With little interest in your project, refrain from engaging them or over-pitching your ideas
- High Power, High Interest: Focus on stakeholders because they can be a positive influence for the company and their high interest their high interest level demands your fullest attention to calibrate and manage expectations.
- Low Power, High Interest: These people have a lower level of experience but show a higher level of interest in your project. Enlist their support because of their interest so they become your voice and feedback loop in the organization.
- Low Power, Low Interest: Maintain this relationship at a minimal level by providing updates electronically and minimise direct face to face engagement. Talking to them once a month about the project might be helpful. You may also de-prioritize your engagement as they are least interested.
This is a useful way to understand your stakeholders and ensure that your strategy and engagement plan appropriately addresses the various levels of stakeholders’ needs.
Step - 3: Adopting a stakeholder-centric lens
Think strategically about how you can earn the ongoing support of the people you've chosen to be your stakeholders.
Develop a persona or a profile of your stakeholder before planning your communications intentions. Key questions to address in the following.
- What is motivating this particular stakeholder?
- What are their priorities and how do you align it with yours?
- Will the stakeholder have a positive view of your project?
After you've established these profiles, you're ready to start the next phase of your evaluation - the SWOT analysis of the stakeholders.
Stakeholder SWOT Analysis
Conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) evaluation is going to be crucial for risk assessment and strategic planning.
Here is how it can be done:
Stakeholder SWOT Analysis
What’s the primary strength of your stakeholder?
Will these help your initiative or hinder it somehow?
How can you use it to improve your success rate?
What are the weaknesses of the stakeholder?
Will it be a liability for you?
What positive connections, expertise, and influence does the stakeholder have?
Will they be useful for you?
What threats the stakeholder might pose to your organization?
Could they put the entire initiative at risk?
How can these issues be monitored or reduced?
Stakeholder Planning: Designing For Management and Engagement
The stakeholder planning segment of the management process is classified into two distinct categories which are: stakeholder management and stakeholder engagement
Here, we start to determine how your team is organized to proactively manage and meet the expectations, needs and goals of your key stakeholders. Here are 5 tips to create an effective plan aligned to all parties -
1: Focus On Tangible Value Contribution
Create a plan that primarily focuses on the critical aspects of your initiative and what all your stakeholders will care about the most. Avoid jargon,use easy-to-understand terms, and opt for a detailed approach while communicating your plan in front of everyone.
2: Maintain Honesty and Transparency
Stakeholder management is done through two-way communication. This way,it will promote transparency across your stakeholders and continue through open communications to create interdependence and cooperation. Poor communication leads to misinformation and uncertainty. The intention and meaning can also be misconstrued, which can be damaging to your relationship with the stakeholder.
3: Establish Your Initiative's Priorities
Create a visual representation that categorises your stakeholders based on their influences and interests. It can simplify the entire process of establishing your focal point and ensure the overall success of your initiative.
4: Anticipate Conflicts and Disagreements
Be proactive when you are creating a stakeholder management plan and consider the potential conflicts that might arrive alongside it. Have a plan A and a Plan B to manage potential and avoidable disputes and help everyone understand the procedural steps.
5: Use a Well-Defined Template With Key Milestones
Adopting a standardized template can help you establish your stakeholder management plan in a cohesive and logical manner. It, in turn, can seamlessly integrate into your plan and curated centrally for all key account leaders involved.
The second aspect of stakeholder planning,stakeholder engagement addresses the operationalization of the plan, i.e. how would you turn the plan into an action-based approach that incrementally strengthens the relational value for all parties?
A stakeholder management plan can document the influence and involvement of your initiative's stakeholders and help with how you're communicating with the stakeholder base.
1: Identify the Key Components of the Stakeholder Engagement Plan
To focus on what matters most, direct your energy on the most important stakeholders by segmenting them based on their impact. Segment your stakeholders based on their level of influence, interest and impact. Then you can easily see who’s most important, and how well you’re engaging with them.
- The Interest Level: Place a label on a stakeholder on the basis of their current engagement or interest level.
- The Influence Level: The higher the influence of the stakeholder is, the more important they will be for your initiative.So, it may be best to engage and cultivate the relationship with them to strengthen the bonds and credibility.
- The Impact Level: Identify what and how the stakeholders voice causes a ripple effect on others around him. Knowing his circle will help you understand how best to leverage and support his network and connections.
2: Learn about the Engagement Level of Your Stakeholders
There are a total of five different engagement levels when it comes to assessing a stakeholder.
- Supporting: A supporting stakeholder will perceive the core impact of the initiative and support it by sponsoring the initiative with confidence.
- Leading: A leading stakeholder is aware of the impact of the initiative and will try to be involved in the same actively.
- Neutral: A neutral stakeholder, despite having a clear idea regarding the level of impact of your initiative. However, they'll neither support nor resist it.
- Resistant: A resistant stakeholder, even after understanding the positive impact, resists the initiative's development with reasons known or unknown to us.
- Unaware: An unaware stakeholder has no idea about the initiative and demonstrates little knowledge or participation.
When it comes to engaging your stakeholders, finding people who fall under the leading and supporting category should be your primary focus.
For the neutral stakeholder, it’ll be better to keep updating them about the initiative. This way, you might be able to get them onboard with your plan.
The resistant stakeholder has to be taken care of properly depending on their influence level. If he or she falls under the low-influence category, it might be best not to communicate too much.
influencing people in your organization, you have to be more active and let them know about the impact of the change. Finally, an unaware stakeholder does not require too much information, as they are not too invested in your initiative.
3: Establish a Consistent Communication Plan
A consistent communication plan is required to reduce the sense of confusion among your stakeholders. So, you can take care of this issue through stakeholder mapping. It can guide you on how you can communicate with stakeholders on the basis of their interest and influence level. There are two steps involved in it, including -
- Identify Your Communication Channels: Which type of communication channel do you regularly use? What do you use it for? How much information can they convey?
- Identify the Type of Communication: Do you want to focus on updates online or prefer face-to-face communication? What is the ideal frequency and goals of your purpose of communication and desired outcome?
What Are the Benefits of Effective Stakeholder Management?
Some of the benefits of effective stakeholder management may include the following -
1: Increase Focus and Role Clarity
Having a stakeholder plan can help a project manager and set realistic expectations in any given initiative. This can improve the clarity regarding their roles and improve the focus and productivity of the stakeholders, as they can get more involved in the initiative.
2: Boost Curiosity and Interest
Stakeholders will always seek the benefits of an initiative before getting engaged in it. Thus, having a well-thought-out plan which can explain how the initiative will impact their business and the way it might benefit them in their role.
3: Decrease Risks and Conflicts
Increased engagement and role clarity can decrease the frequency of preventable conflicts while reducing resistance. This can also unite stakeholders’ openness to understand one another’s views and make them better prepared for challenges and mitigate the risks effectively.
Stakeholder Management Challenges
Some of the challenges that you may experience while managing stakeholders are -
Problem - 1: Aligning More Than One Stakeholder
Working through a multi stakeholder scenario can delay and divide the alignment and cohesion of your group decision making and cause unproductive oppositions. Here, managing the interpersonal relationships across stakeholders and acting as a strong mediator can galvanize the members to be integrative in their approach.
Solution: Encourage diversity of thought and openness to embrace differences but establish clear ground rules for engagement. Additional investment in pre-meetings can help you to clear obstacles and address concerns ahead of time. Alignment takes time and is best worked through in smaller groups or one person at a time.
Problem - 2: Resource And Inevitable Constraints
Working now with change and complexity, limitations and obstacles are challenges that will constantly distract, divert or dilute the intentions of all parties. The principles and practicalities are real paradoxes in stakeholder relationships.
Solution: Prioritizing and allocating the resources properly can also prevent the quick depletion of your organizational assets and efforts. Building transparency and anticipating constraints early will increase the stakeholders readiness to embrace the change and trade offs needed.
Problem - 3: Communications And Misinterpretation
Sometimes, due to the continuous pressure of work or the different job roles, miscommunication and misunderstanding with everyone, including the stakeholders, may occur. Communication breakdown when left unattended can spark a sense of resistance and opposition.
Solution: Consider the attitudes and status of stakeholders focused on those who have the power and influence to impact your goal. Communicate early and encourage transparency by making the project milestones visible to all. Apply a stakeholder-centric lens when speaking to gain their support, identify their requirements and align to their expectations.
Stakeholder management is a critical corporate practice that can take a lot of practice and a well-thought-out strategic approach, when viewed with a stakeholders’ lens.
A well-conducted stakeholder management process can enable an organization to identify individuals who are interested in your initiative and track them accordingly. So all in all, it will ensure the growth of the organization and succeed in its endeavors.
Stakeholder management helps you identify, profile and appreciate your stakeholders’ goals,needs and expectations. Strategically, when you analyse their connections with other stakeholders, the risks and opportunities that you uncover will offer you and your team insights. Thus enabling you to know how best to reach and engage your stakeholders.