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
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
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