5 things you should know about your stakeholders

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5 things you should know about your stakeholders

· Julie Buxton,Stakeholder,Analysis

Whilst the significance of stakeholders is widely acknowledged across all sectors, effective stakeholder analysis and engagement is more complex than a mere acknowledgment of their importance. In addition, it can also be valuable to take a ‘business inputs’ approach as opposed to a communications approach to assessing stakeholders and here are five matters to consider.

1. Understand what “stakeholder” means

The meaning of the word stakeholder has expanded over the last 80 years. Early conceptions of stakeholders tended to be commodified into four distinct categories: customers, suppliers, employees and shareholders, and was largely the domain of business management in the corporate sector. However, the modern notion of stakeholder goes beyond that original conception, principally due to the development of stakeholder theory in the 1960s and ‘70s and the incorporation of the term into the field of politics. Today, the term is widely used to refer to myriad of groups and individuals across a variety of sectors, and should be understood by asking: who has an interest in, can be affected by, or can affect the delivery or outcome of your core function?
2. Know where your stakeholders fit

Stakeholders can be classified into broad categories, such as governance, community, consumers, associations, citizens, non-for-profit and so on. These categories will depend on your core function and the sector you belong to, or the project you are seeking to deliver. Within each of those categories will be key stakeholder groups. For example, if one of your categories is governance, then you’ll need to identify the departments, ministers and regulators included in that group that are your stakeholders. Another way to look at it is in terms of sectors and industries: manufacturing is a large sector but contained within that are many different industries, so in this case the sector is the stakeholder category and the industries are the stakeholder groups.
 
3. Distinguish between direct and indirect stakeholders

It’s important to understand the difference between direct and indirect stakeholders. Direct stakeholders often have priority consideration because they have a visible role in the organisation, regulation, operation and delivery or outcome of your activities. Indirect stakeholders are more difficult to identify, because although they may be affected, they may not be direct users or directly involved. Their interest, however, should not be overlooked. Indirect stakeholders have been influential in affecting government policy and business activity through direct action and public campaigns, particularly when it relates to issues indirect stakeholders view as ethical.
 
4. Recognise that stakeholder identification is an ongoing process

Many factors, both internal and external influence who your stakeholders are. Factors such as changes to organisational structures or staffing, new projects coming online, or a change of government will not only affect who your stakeholders are but will determine how to prioritise your interactions with them. So, it’s essential to view your identification of stakeholders as an ongoing process.

5. Don’t apply a “one size fits all” approach

Stakeholder analysis, engagement and management involves a lot more than just identifying and communicating. Whether it’s a new project or policy, or ongoing product management, effective stakeholder engagement is not a one size fits all plan. Many strategies for stakeholder management fail because the complexity of stakeholder relationships are underestimated, or the potential and opportunities strong relationships and meaningful, considered engagement can bring are overlooked.

FPL Advisory is a team of specialists resolving risks and creating opportunities with respect to government. We work with public sector and corporate clients to execute strategies for owning and managing change