Want to learn more? Check out these recent articles from the PACE blog:
Firstly, one has to define what stakeholders are. A stakeholder is a person or entity that is affected by, or affects an organisation’s products or activities. Stakeholders can be both internal and external.
Some key stakeholders of an organisation include shareholders, government agencies, vendors, the press, the community, customers, employees, colleagues, and even future employees.
Just imagine the impact caused by a key supplier who refuses to continue his or her supply, or perhaps a top-ranking customer who decides to buy from your competitor instead. Or maybe, to rub salt to the wound, what if your top talents leave to join competing firms? Or perhaps there is an impending change in governmental regulations that affects your organisation’s daily process?
The concept of stakeholder management has been around for some time now. Most organisations practise proactive stakeholder management and engage in activities such as managing conflicts between the parties and juggling multiple priorities to achieve short-term goals. While these organisations do listen to their stakeholders’ concerns, their push for closure risks overlooking some of the stakeholders’ unaddressed interests. Organisations that adopt stakeholder management tend to be defensive, and this could lead to more conflicts among the parties at times. In short, such organisations tend to focus more on their interests, rather than those of stakeholders, in their bid to achieve short-term success.
Organisations are dependent on their stakeholders to progress. However, not many have adopted or know how to practise a culture of interdependence for sustainable collective success. With that in mind, here are some helpful pointers on how to begin doing so.
Don't Manage, Engage!
Unlike stakeholder management, stakeholder engagement adopts an interactive and collective success approach. Organisations that embrace this concept are authentically keen to meet the priorities and interests of their stakeholders, and operate with a long-term strategic perspective in mind. They interact with stakeholders through regular dialogues to understand their views, making all-out effort to achieve wins for the parties involved.
Such organisations are prepared to make changes to their work processes and preferences in order to facilitate the success of all. Their inclusive actions strengthen their trust and relationships with stakeholders, who in turn reciprocate and do likewise. Over time, these positive iterations of mutual care will garner more collective success for both parties.
Thus, we see how organisations can influence their stakeholders in the process of engagement. In doing so, they are poised to shape the behaviour, and ultimately, actions of others to achieve certain outcomes.
In light of the above, organisations will be better equipped to influence their stakeholders to some extent if they know about their ‘personas’ and interact in a way that appeals most to them. To do this, a Stakeholder Analysis is necessary. Here is a helpful framework to begin with:
From the table above, we see that there are four categories of stakeholders any organisation might have. The category A stakeholders are those that provide an organisation with the much-needed resources to achieve its intended goals. At the same time, the organisation itself also has a high level of influence over these stakeholders. Whereas Category D stakeholders are those that are unlikely to provide the needed resources sought by an organisation, who probably also have little or no influence over them.
Category C stakeholders possess resources that an organisation can leverage to achieve its intended goals. However, the organisation has low influence over the actions of these stakeholders. In contrast, an organisation has high influence over the stakeholders in Category B. However, the latter might not be able to provide the necessary resources necessary for goal attainment.
From the above framework, it is apparent that category A and C are of immediate interest for any organisation. However, cultivating Category B stakeholders cannot be totally ruled out for meeting future organisational needs as well. Thus, performing a categorical analysis like this would be a good start for organisations looking to craft an engagement strategy, as it will allow them to identify the right stakeholders to target and prioritise, which is the first and crucial step to effective engagement.
To have sustainable wins and success for your organisation, you would need to engage your stakeholders not merely managing them. In my next content sharing, I will elaborate on how you can build upon this stakeholder analysis to craft an engagement strategy with stakeholders, as a first step towards influencing them and cultivating interdependence for collective success.
Want to find out if your organisation is doing well on the whole? Click below for a quick and FREE checklist to assess your organisation's performance!