How to Strategically Manage Your Stakeholder Relationships
Need to strategically manage your stakeholder relationships? Find out how you can more effectively work with each of your stakeholders!
The strategic management of stakeholder relationships is critical in nearly every organization — whether you’re a private company, government organization, or a not-for-profit.
So, let’s look at what the research says on why stakeholder relationships matter and what strategies you can put in place to manage them.
Why Manage Stakeholder Relationships?
Very few people would argue against the practice of stakeholder relationship management. But have you ever stopped to consider the reasons why you should be doing it?
Going back to the basics of stakeholder management — it’s all about identifying the people and groups that relate to the organization — and managing that relationship to ensure the best outcomes for both stakeholders and the organization. Because when you do that effectively, you can:
- Manage stakeholder perceptions
- Work through changes
- Build trust
- Report on activities and impacts
- Track emerging issues
- Encourage stakeholder involvement
- Share and gather knowledge and insights
- Access resources
- Build accountability that increases ethical and socially responsible behavior
- Increase the likelihood that your relationships with stakeholders continue, long-term
- Achieve better project outcomes for your organization and stakeholders
- And much more
Managing stakeholder relationships makes good strategic sense, especially in a highly competitive or high-stakes environment. It’s valuable for corporate governance, critical to build social capital, essential for project management, and an important part of both corporate relationship management and nonprofit relationship management.
Managing Stakeholder Relationships: 7 Strategies
Here are seven strategies you can use to better manage your stakeholder relationships — including a mixture of basic and advanced approaches you might like to try!
#1 Start With a Plan
Of course, it’s always best if you start with a stakeholder management plan. That way, you can get your strategies and objectives down on paper.
In fact, research found that developing and implementing relationship plans for key stakeholder markets could lead to valuable knowledge and insights into stakeholders’ situations, constraints, and opportunities. Planning was found to help managers gain more transparency into stakeholder interests and better plan their approach to relationships.
We’ve got plenty of resources on stakeholder planning, including a simple online tool to create a stakeholder management plan, a webinar on stakeholder plans, and a guide to create stakeholder plans in just six steps.
#2 Think Beyond Shareholders
Many organizations place a great deal of emphasis on shareholder relationships, but neglect other legitimate stakeholder groups.
Remember that your shareholders aren’t your only stakeholders — and may not even be your most important stakeholders! Consider your suppliers, customers, employees, governing groups, local media, and community groups. Who else is impacted by or has an interest in or influence on the project? Who else might you need to build and manage relationships with in order to support your goals?
Studies show that good stakeholder relationships (with a variety of stakeholder groups, not just financial stakeholders) can lead to better financial performance and help you recover from a period of poorer performance. After all, each stakeholder group can impact your knowledge, resources, and ability to get the job done in a range of ways.
#3 Map Your Relationships
If you haven’t already conducted stakeholder relationship mapping, this strategy could be a gamechanger for relationship management. Like other types of stakeholder mapping, relationship mapping helps you visualize your stakeholders — in particular, their relationships with you (and each other).
Once you know how your stakeholders relate to each other and to your organization, as well as any other relevant characteristics, you can take a more strategic approach to managing them. For example, you might prioritize a well-connected stakeholder first. Or you might prioritize an easy-to-reach stakeholder to increase your chances of success with another (harder to reach) stakeholder they are connected to.
#4 Record Everything
Data is gold when it comes to strategically managing stakeholder relationships. But not just any data: you want information on what your stakeholders think, do, and want.
The good news is that if you ask your stakeholders or pay close attention, they’ll probably tell you what you need to know at some point. Don’t let this information slip! Make sure it’s recorded in a way that’s easy for you to refer to for future conversations, planning, reporting, and analysis. Ideally, you’ll have a stakeholder relationship management system like Simply Stakeholders that allows you to easily record all your stakeholder data, linked to each individual stakeholder record.
#5 Personalize Your Approach
Strategic stakeholder management is about how you can be more effective and efficient — and one of the best ways to do that is to personalize your approach to stakeholders. Once you’ve done stakeholder analysis and stakeholder mapping, you can easily organize your stakeholder lists into groups based on shared interests, issues, level of influence/interest/impact, demographics, and other qualities. From there, you can tailor your stakeholder management activities, frequencies, communication methods, and topics to suit each group.
#6 Communicate Well
Strategic stakeholder management has a lot of similarities with strategic corporate communication. So, consider…
- Who do you want to communicate with?
- Why do you want to communicate with them
- How can you do that effectively?
When engaging with stakeholders, try to communicate based on mutual understanding — this will make your engagement more constructive (especially when you’re facing some conflict or disagreement). So, go back to your stakeholder analysis to understand what you and your stakeholders already have in common, and start there.
And of course, refer back to your stakeholder records and analysis for insights that help you engage in a way that’s relevant to each stakeholder.
#7 Get Their Participation
It might be worth shifting your mindset away from ‘managing stakeholders’ (i.e. keeping them controlled) and instead work towards participation and engagement.
This means viewing each stakeholder as a potential source of knowledge, resources, and insights — and trying to engage with them in order for you both to benefit.
You might find that engaging with stakeholders and allowing their perspectives to be heard (and have an impact) will improve your project outcomes, strengthen your relationship with stakeholders, and boost their relationships with each other, too.
Get Tools for Better Stakeholder Relationship Management
If you’re struggling to apply the above strategies to your stakeholder relationship management process, you might be due to upgrade your toolset. Simply Stakeholders’ software is designed to simplify your stakeholder relationship management with tools like:
- Stakeholder lists, recordkeeping, and tracking
- Stakeholder mapping and analysis
- Stakeholder relationship maps
- Issues tracking
- + more
If you’d like to find out more, reach out to our team for a demo!