What is the most important aspect of any project in the business world?
From building a new business to launching a new product line, the most important element is people. Does that surprise you?
Think about it this way, what happens if you lose your funding sources or your staff, or your customers? It doesn't matter how amazing your product is if you can't make it, market it, or sell it.
How can you ensure all people involved in your project remain engaged? Build and execute a stakeholder management strategy.
The Benefits of Stakeholder Management Strategy
Everything in the business world relies on relationships. Connecting with the important people in and around your business can be the difference between success and failure.
From employees to partners, customers to vendors, your business is more effective if each relationship functions well. When these people are invested in your success, they tend to stay engaged, and you ultimately stand a better chance of success.
Engaging the people involved at every level of your project (and keeping them that way) is crucial, but where do you start and how do you keep it on track? Following the four stages of stakeholder management strategy is the first step toward successfully completing your next project.
Stage 1: Identify Your Stakeholders
Today, more than ever before, businesses need to meet the needs of all stakeholders, not just the financial ones. For example, choosing a vendor who only uses ethically-sourced materials could mean more for your business than you realize.
A stakeholder by definition is anybody invested in or affected by a project. It’s a broad term that can make it seem impossible to reach everybody, which is why stakeholder management strategy is so critical.
Start by creating a detailed list of everybody who could qualify as a stakeholder. Ask yourself who could be affected by the project, who’s interested in it, and who has power over the outcome.
Tips for Building Your Stakeholder List
Are you feeling stuck at step one? It may seem like a lot at first, but this step is crucial in building a successful stakeholder management system, and a skill every manager needs to learn.
- Try breaking this step into manageable chunks. Start with some basic groups of people – investors, management, employees, vendors and suppliers, and customers.
- Consider all the positive influences involved in the project. Include everyone who supports your cause.
- Don’t forget about the negative influences. Even stakeholders who could have a negative impact on your project should be included.
Stage 2: Categorize Your Stakeholders
Once you have a complete list, it's time to categorize everybody by the amount of power they have over the project. That sounds ominous, but it's more about the level of information you need to provide to each stakeholder throughout the process.
How do you know who needs to be “in the know?"
Though everybody on your list has some level of involvement over your project, some have more power than others. Further, some stakeholders have more interest in your project's day to day operations than others.
How to Determine Stakeholder Priority
A Power-Interest grid is one of the more helpful stakeholder management techniques for deciding how to prioritize the people on your list. On one axis, consider the amount of power somebody has over your project. The other side of the grid is the level of interest.
Every person should fall in one of four quadrants, which then allows you to determine how you engage with them.
High Power and High Interest Stakeholders
People who fall in this quadrant are your most important stakeholders. You need to manage them closely to keep them satisfied and highly engaged in your project.
High Power but Limited Interest Stakeholders
Satisfaction is key for people in this section of the grid. They can shut you down if they don't like the direction of the project, but the daily issues don't matter as much.
Low Power Stakeholders with High Interest
These stakeholders want to be aware of what's happening at each step, but they lack the power to make major changes. Keep them informed to allow them the opportunity to assist with details and keep things moving in the right direction.
Low Power and Low Interest Stakeholders
Don't ignore the stakeholders in this quadrant, but don't overload them with information.
Stage 3: Establish Expectations
This stage is a two-part process. Establishing expectations means understanding the needs of all stakeholders and then determining how to meet them.
What Do Your Stakeholders Need?
What do your stakeholders require to remain engaged in the project? From daily reports to short monthly check-ins, you need to determine the best way to keep each person satisfied and invested.
- Step into your stakeholder’s perspective. What would you want from the project?
- Understand every level of the business, including vendor and supplier systems. Learning how your partners operate and their typical constraints can help you meet their needs.
- Focus on building solid working relationships to establish trust and a better understanding of each stakeholder.
- Surround yourself with a talented, reliable team who understands your goals and works toward solutions instead of focusing on the problems.
- Develop management skills for yourself and every member of your team. Strong managerial skills mean more confidence and a better understanding of how to handle your stakeholders.
It’s necessary to understand that your stakeholders may say they want things one way, but in reality, there are several more layers of information they need. Listen to your stakeholders and focus on what they don’t say as much as what they tell you.
Setting Expectations for Communication
Once you determine what your stakeholders need, you have to determine how to meet those needs. Providing the information your stakeholders need helps you build trust and create a cooperative environment.
At this part of the stakeholder management process, it’s helpful to create a system for communications.
- Establish a calendar so that stakeholders know when to expect updates, like a monthly report.
- For email communication, create mailing lists for each level to make the process easier going forward.
- Create templates that appeal to different personalities. Include a concise list of bullet-point items, diagrams and other visuals, and more detailed descriptions.
- Don’t forget about face-to-face meetings. Though it may be easier for your internal stakeholders, some external stakeholders might prefer personal attention.
Bonus tip: If you can’t give your stakeholders certain information it’s best to be transparent about why you can’t provide it.
Stage 4: Engage With Your Stakeholders
The final stage of a successful stakeholder management strategy is the most important because it determines the success of your project. Continued engagement and meeting established expectations is essential because it builds trust and loyalty.
Whenever you communicate with your stakeholders, you reinforce your commitment to the project and them. Here are some tips for engaging stakeholders at every step of the process.
- Show empathy and awareness when stakeholders bring forth concerns or input.
- Early in your process is an excellent time to consult stakeholders and gather suggestions.
- When people disagree, find ways to compromise. Try to give more weight to those high power-high interest individuals.
- Reevaluate your communication system throughout the process to make sure it continues to meet everyone’s needs.
- Take responsibility for your role and provide clear guidelines and expectations for each stakeholder.
- Make the plan accessible to your stakeholders. For larger and geographically diverse groups, you can create a stakeholder engagement page like this one by Nike.
Remember, your goal is to make your stakeholders feel heard, represented, and necessary. Even the low power, low interest stakeholders need some level of engagement.
Tips for Dealing with Challenging Stakeholders
If you worked your plan properly, you included those stakeholders who could have a negative impact on your business. Difficult stakeholders may be obvious from the beginning or crop up along the way, but they cannot be ignored at any point.
- Watch difficult stakeholders and identify their motivations as soon as possible. Knowing who they are and what drives them is your responsibility as the project manager.
- No matter how challenging they are, listen to your difficult stakeholders. Try to step into their shoes, empathize, and do your best to make them feel heard.
- Arrange a face-to-face. Giving a difficult stakeholder your undivided attention lifts the pressure of an audience. It also limits the effects of negative opinions on others.
Building Your Stakeholder Management Strategy
It takes time and effort to build and execute a plan, but with the right stakeholder management tools, you can succeed. Take things one step at a time, but don't be afraid to backtrack and reevaluate at any stage.
Stakeholder management strategy is a skill you can develop with proper support. If you want to take your management skills to the next level, the team at Executive Coaching Now can help. Contact us today to get started!