What is stakeholder management and how do you get started?
What is stakeholder management and how do you get started?
Are you running a project, organisation or initiative that impacts a lot of different people and groups? If so, you’ll probably need to do stakeholder management.
So, what is stakeholder management and how do you do it?
What is stakeholder management?
Stakeholder management is the process of identifying and understanding all the people, businesses, governments, internal stakeholders, shareholders and other groups of people that are involved in, or affected by, your organisation or project.
Stakeholder management involves:
- Building trust
- Understanding stakeholders’ needs, concerns and priorities
- Giving them opportunities to provide feedback and participate in decisions
- Ensuring stakeholder feedback and needs are reflected in decisions
- Fulfilling statutory obligations (to keep people informed or seek their feedback)
Ultimately, stakeholder management (done properly) should result in better decision making and overall better outcomes for all parties.
Stakeholder management isn’t just for big organisations
Stakeholder management used to be a practice you’d mainly see in larger organisations. But nearly every organisation manages stakeholders, even if they don’t call it “stakeholder management”.
These days, an increasing number of small-medium organisations are becoming more aware of the benefits of stakeholder engagement. They’re asking the all-important question, “what is stakeholder management?” then putting in the effort to manage and engage their stakeholders.
So in case you’re just starting to jump onboard with stakeholder management, keep reading to learn more about what stakeholder management plans look like, examples of where you’d apply stakeholder management practices and the best place to start.
Examples of stakeholder management
One of the best ways to understand what stakeholder management involves is to look at some examples of it in practice.
A state or federal government agency will need to consider stakeholder management any time they develop a new policy. There will always be vested and competing interests around new policies. For example:
- Some community or environment groups might be completely opposed
- Some businesses might be very supportive of the changes
- Some local councils won’t know how it will affect them
- Academics and senior professionals in the field may have opinions they’d like to voice
A situation like this could quickly escalate and become a political or media issue without effective stakeholder management.
Stakeholder management looks at all of these groups of people and anticipates how they’re likely to respond to the changes. It’s normal for some people and groups to be quite happy, while others might feel threatened.
Through effective stakeholder management you can look for areas of common ground between the various interested parties, and identify the key areas of dissent. This gives you the ability to refine and adapt your policy to try and address these key areas.
From there, you can make a plan to make the process as smooth as possible for everyone involved, including what you need to communicate, what actions you’ll need to take and what outcomes you want to see. Once you have key people and groups onboard, it’ll be a lot easier to manage the relationships and stakeholders through the changes that need to occur.
What is stakeholder management for?
Stakeholder management helps explore the perspectives of different groups of people, anticipate what they’ll think and do, and what might trigger them. It seeks to smooth out any changes and transitions by fostering better understanding, relationships and engagement.
Stakeholder management is for any organisation – whether you’re a small business, larger business, government department, not-for-profit, educational institution or something else entirely. And you can benefit from stakeholder management in just about any activity or project you undertake.
But stakeholder management is most often put into practice when you’re planning a significant change, new project or event that might affect a lot of different people (particularly in a negative way). Or if you need to manage certain stakeholder relationships that could become a significant risk for your organisation.
What’s a stakeholder management plan?
Your stakeholder management plan is a written strategy that includes what you know about the stakeholder landscape, your project and what you’ll need to do to achieve your objectives. While stakeholder management plans vary depending on your organisation and industry, here are some aspects your plan will need to cover:
- Know your stakeholders – Who is affected by your organisation or project? What’s their level of influence? What are their interests? Are they advocates, supporters, neutral, critics or blockers?
- Set your objectives – What result do you want to see from each stakeholder group? How much support do you need from them? What specifically do you want them to say or do?
- Strategy and tactics – What’s the strategy and approach best suited to each stakeholder group? If you are using stakeholder mapping to segment your stakeholders by Influence, Interest and Impact, do you have a strategy for engaging with each of these groups?
- Resources – What resources do you have? What resources will you need to enact your strategy (including budget, time, advice, expertise, people and sponsorships)?
- Messages – What messages do you need to communicate?
- Actions – What actions will you need to take to increase support from your stakeholders and achieve your objectives?
- Evaluation – How will you evaluate the success of your plan, know if you’re managing it well and achieving your objectives?
What’s a stakeholder management system?
Once you’ve created your stakeholder management plan, you’ll need to put it into action.
A lot of organisations invest in stakeholder management systems when they’re planning a new project or they find that they’ve outgrown their current practices. Perhaps the excel spreadsheets just aren’t cutting it anymore, or they’ve expanded their team. In any case, they realise a pressing need to develop their understanding of who all the stakeholders are and who is speaking to who.
So, if you’re feeling overwhelmed by the volume of tasks and information you need to coordinate, you’ll want to create a system to make your stakeholder management process simpler. In some organisations, that system might start in a spreadsheet, although (as we’ll discuss), most find they outgrow spreadsheets very quickly.
Can I do stakeholder management in spreadsheets?
If you’re just getting started, you could manage all the info you need in spreadsheets. And many businesses do, especially since spreadsheets are relatively easy to use (most people have basic spreadsheet skills) and are low to no cost. In fact, 69% of small businesses still use spreadsheets for planning budgets and tracking spending, and 49% still hand-write records around managing their spending. But that doesn’t mean it’s a good idea.
Spreadsheets (both for accounting and stakeholder management) quickly become annoying and hard to manage. Here are some reasons why you might want to reconsider using spreadsheets:
- User limitations – Depending on your software, only one person can work in your spreadsheets at a time (this quickly becomes a problem if you have a larger team).
- Version control – It’s inevitable that you’ll end up with multiple versions of your spreadsheet. This can make it hard to keep track of which version is the latest.
- Data security – With a spreadsheet, you’ll be storing stakeholders’ personal information on individual computers. This means greater potential for data breaches. And it could be illegal – GDPR legislation in the EU requires data to be securely stored, with a record of exactly where the data is stored and used, which is impossible to do with spreadsheets.
- Skills – Not everyone knows their way around a spreadsheet, so they might struggle to analyse the data.
- Data silos – There’ll be data in spreadsheets, word documents (like meeting minutes), survey systems, and so on. It means you’ll miss out on a comprehensive view of your stakeholder interactions across all channels that you can report on and analyse.
To sum it up, spreadsheets slow things down, lead to errors and may risk legal ramifications depending on where your organisation and stakeholders are located. So if you’ve tried spreadsheets and they’re not working for you, you probably need to upgrade to stakeholder management software.
Stakeholder management software features and costs
So, what stakeholder management software should you invest in?
The answer depends on a range of factors, like budget, how much time your team can invest in learning the software and the types of features you need. For most small-medium businesses, big, fancy software won’t be the right answer.
Most of this software is complex and hard to use, especially if you don’t need all the features. In most cases, your team will probably need at least a few weeks to properly train and onboard before they can even start using the software. Plus, it’s expensive. Many of the big stakeholder management software companies don’t advertise their pricing transparently, but it’s normal for costs to start at $25-45K per year. Some stakeholder management software can be up to $100K per year (and even higher).
That’s why my team and I developed Simply Stakeholders. It’s still powerful but a lot simpler to use, with quick onboarding and flexible pricing that starts from just $99AUD per month.
Cheaper stakeholder management software doesn’t mean you have to miss out, though. Simply Stakeholders includes stakeholder mapping, reporting, and communication all in one place – it’s all the stuff you really need to do for best practice stakeholder management.
Importantly, it’s much more than a CRM, which is typically designed for tracking customers through a sales process. By contrast, a stakeholder management tool is a system specifically designed to help you partner with stakeholders, in an ongoing fashion, to reduce risk and achieve outcomes for your organisation.
You can do cool things like integrate your stakeholder database with social media, email lists, Microsoft Office and other systems. So you can see what channels your stakeholders are using the most). This means you can pull together information and communication from all sorts of places so you’ve got a single source of truth for your team.
Your stakeholder management software should help identify who’s high-value, their level of impact/interest and where they stand with your organisation or initiative. Plus, get info on the topics and issues you’re tracking and how people feel about them. That way, you can prioritise what stakeholder management activities you need to do for maximum impact.
Want to learn more about stakeholder management systems? Check out these essential stakeholder management system features and find out what to look for when investing in community and stakeholder management software.
What’s the best way to get started with stakeholder management?
Save time and effort and do things properly from the start. Skip the spreadsheets and implement your stakeholder management plan with a great software package. You can get started today with a free trial of our powerful (but simple and affordable) stakeholder management software.
And if you’ve got questions about what stakeholder management might look like in your organisation, please reach out and contact us. We’re here to help.