Stakeholder management best practices can help you prioritize your team’s time, talent, and resources. You’ll know which stakeholders are critical to your success and how to engage them.
The right amount of communication with each stakeholder is essential. For example, while some stakeholders may need weekly updates, others will need less frequent information.
1. Improved Decision-Making
Having stakeholders at the table can help companies anticipate roadblocks and avoid them. As a result, companies can complete projects on time and within budget.
Stakeholder engagement can also help boards make more informed decisions. For example, feedback gleaned from stakeholders may change your perception of a particular issue or provide new insights that will help you gain a competitive advantage.
A consistent approach to stakeholder engagement is essential for building relationships and delivering results. It can also improve engagement quality at critical moments when timelines are compressed (like a product launch or responding to a crisis). Stakeholders who are consistently informed about company activity will be more likely to support you at these important moments. This is why it’s important to map each stakeholder on your influence/interest grid and create a communication plan for them.
2. Increased Reliability
Stakeholders are people or organizations who can potentially influence a project’s outcome – either negatively or positively. They can include locally affected communities and individuals, NGOs, politicians, religious leaders, civil society organizations with special interests, and other businesses.
Developing an effective stakeholder management plan can bring quantifiable business benefits. In fact, the IO Sustainability and Babson Innovation Lab study found that companies with strong relationships saw greater licenses to operate in their local operating areas. This was a result of the increased trust, transparency, and cooperation that result from engaging with stakeholders early on.
3. Better Communication
Effective stakeholder management requires communication with both internal and external parties. Whether it’s with team members or community partners, transparency helps everyone feel more connected to the project.
When you can clearly communicate with stakeholders, it can also help educate them on new policy developments. In turn, this can result in better decision-making and even reinforcement of existing decisions.
Creating a SEP during the project planning phase will help you determine who needs to be communicated with and how often. You can separate stakeholders by their level of influence and interest to make this process more streamlined. For example, a board member with high influence but low interest would be less important to loop in on early details than a key ally who has both high influence and high interest.
4. Increased Efficiency
As a result of streamlining stakeholder engagement, teams can save time and resources by identifying what specific activities to focus on. This also allows them to better allocate resources for those stakeholders whose interests and opinions are most important for the project’s success.
Having clear communication channels also helps to limit negative press, which is costly for any company. Additionally, by listening to the opinions of stakeholders, companies can identify potential risks — reducing the risk of costly mistakes down the line. Stakeholders can also offer a unique perspective on project challenges and help prevent issues before they become a problem. By mapping stakeholders by their influence and interest levels, teams can determine what level of involvement each should have in the project, as well as what communication cadence they should follow.
5. Improved Collaboration
If a stakeholder feels that they are not being heard, they may become disengaged and less likely to collaborate in the future. It’s important to ensure that stakeholders can easily communicate their needs, opinions, and ideas to the project team.
Stakeholders also need to feel that their input is being acted upon. The SustainAbility Common Threads report notes that stakeholders will begin to lose faith if companies continue to request their feedback and don’t change their decisions based on it.
It’s a good idea to have regular check-in meetings with stakeholders, from all-hands leadership alignment sessions to quick one-on-one conversations. These can be a great way to avoid roadblocks and keep the project moving along as planned. It can also reduce risks and prevent costly surprises down the line.