Whatever your role, whether you work in a team or not, interaction with stakeholders is inevitable. Success of any initiative you undertake is linked to the experience of the stakeholders involved. Especially when you are in a leadership role, stakeholder engagement becomes a key responsibility of yours. Effective stakeholder engagement can lead to greater trust, collaboration, confidence and buy-in for your initiatives. An ideal outcome of stakeholder engagement is that your stakeholders become advocates of your vision and your work.
On the other hand, there are so many instances where stakeholders aren’t happy- which results in plenty of friction and misalignment. That can cause anxiety- not just for you and your stakeholders, but for people in your team as well. Trust is lacking, and you often experience resistance to change as well as lack of support towards your initiatives. As a leader, you want to set your team up for success. Rubbing stakeholders off the wrong way can be a huge barrier to that. Hence engaging stakeholders effectively goes a long way towards building your impact as a leader.
In this newsletter, we look at a key aspect of stakeholder engagement: Analysing your stakeholders. Stakeholder analysis is important because it helps you identify who your stakeholders are, understand their level of power and influence, and understand what their perceptions and expectations are about your work, so you can work with them accordingly and come up with a strategy to engage with them and build their support. Often, leaders do not give due importance to understanding their stakeholders well enough. That’s where their stakeholder engagement strategy starts to fall apart. Here’s the thing- the key to engaging people you work with is to know them better. If stakeholder engagement is important for you, you might find these 3 steps of stakeholder analysis highly valuable.
Identify your stakeholders:
If you haven’t done this already, a useful exercise would be to brainstorm who your stakeholders are. If it helps, here’s a simplified definition of stakeholder: A Stakeholder is a person, group or organisation that can affect or are affected by your team’s actions and results. Literally everyone who you liaise with can be a stakeholder! These can be people within your organisation (internal stakeholders) or outside your organisation (external stakeholders). Some of the people who typically can be stakeholders in your work are as follows:
- Your leader
- Senior executive team
- Clients
- Team members
- Prospective clients
- Shareholders
- Suppliers
- Product users
- Government
- Trade Associations
- Your family (Probably the most underrated ones of them all :))
…Anyone else who could be your stakeholder? If you haven’t done this exercise yet, I suggest you do this. It might be very insightful and give you clarity on everyone who is closely linked to your work.
Understand stakeholder power and interest:
Different stakeholders have different level of involvement with your work. Some of these may have the power to block your work or advance it. Some may be very interested in what you do, while others may not care. Having understood who your stakeholders are, you need to prioritise your stakeholders. This helps you understand how you can spend your efforts with different stakeholders to engage with them. Some may need more efforts, some less. A power-interest grid is a very useful tool that maps stakeholders according to their power and interest to influence your work. You can place your stakeholders across the grid, based on their power and influence.
Image Credit: Forbes Advisor
The position you allocate to a stakeholder on the grid shows you the actions you need to take with them:
- High power, highly interested people (Manage Closely): You must fully engage these people, and make the greatest efforts to satisfy them. Your clients and senior management executives would fall under this category.
- High power, less interested people (Keep Satisfied): Put enough work in with these people to keep them satisfied, but do not over communicate with them. Examples of such stakeholders may include any governing or regulatory bodies. Sometimes, steering committees in an organisation would fall under this category.
- Low power, highly interested people (Keep Informed): Adequately inform these people, and talk to them to ensure that no major issues are arising. People in this category can often be very helpful with the detail of your initiative. Examples of stakeholders here could be employees, suppliers and vendors
- Low power, less interested people (Monitor): Again, monitor these people, excessive information/reporting is not required. Examples of stakeholders could be communities that your organisation might be operate in, such as trade associations or professional bodies.
Where would you would you place your stakeholders in this grid, in terms of their power and interest?
Understand your stakeholders:
The thing to consider is that whether they are an individual or a group, stakeholders are eventually people who you liaise with. So it’s always important to connect and build relationships with them. Every stakeholder would have a perception or expectation about you and your work. So it’s really worthwhile to understand what they are and manage them, so you can work with your stakeholders seamlessly.
Some of the questions that help you understand your stakeholders are as below:
- What financial or emotional interest do they have in your work?
- What drives/motivates them?
- What is their success criteria of the work you are doing?
- What problems of theirs do you solve?
- How would they be impacted if you did not deliver your work?
- How do they depend on you?
- What sort of information do they like to receive?
- How often do they like to communicate?
In most cases, a really effective way to find answers to these is to ask your stakeholders directly, especially when you’ve just started to interact with them. What are some of the ways in which you understand stakeholder expectations?
How well do you engage your stakeholders? Do you often find working with them to be a seamless experience, or do you feel it’s mostly a bumpy ride? In most cases, the key to your stakeholder experience comes down to how well you understand your stakeholders.