Tips for Engaging with Stakeholders

Organisations thrive when they know how to engage with stakeholders effectively. Stakeholder engagement and stakeholder management are arguably the most important ingredients for successful project delivery. Stakeholders can make or break projects; if they feel overlooked, not listened to or ignored then your project may fail, regardless of how well you deliver in terms of budget, time and quality.

What is a stakeholder

In business, a stakeholder is any individual, party or group that has an interest in the organisation and any outcomes. Businesses often have different types of internal and external stakeholders who all have different interests and priorities, which can often conflict with each other. Internal stakeholders are people who are directly involved within a company such as owners, employees and investors.

External stakeholders are those who do not directly work with a company but are affected by the outcomes or actions of the business. These may be suppliers, creditors or public groups. Organisations can find it a difficult task to please all stakeholders equally and therefore often must prioritise stakeholders and their competing interests.

An example of this may be where shareholders in a company are highly concerned with the profit being made and earning a high return on their investment. This may mean seeking to cut labour costs which would negatively impact another group of stakeholders, its employees. The most efficient and successful companies are able to manage the interests of all of their stakeholders.

The most common types of stakeholders

• Customers are stakeholders of a business in that they are impacted by the quality of service, products, and their value. Many would argue that businesses exist to serve their customers.
• Owners are interested in how much profit the business makes.
• Employees have a direct stake in the company in that they earn an income to support themselves. They want to earn as higher wages as possible and have a stable job and income. It is important for employees to feel valued and not overworked or underpaid. Please see our knowledge base for more information about employee welfare in offices and how to reduce employee turnover.
• Investors include both shareholders and debtholders. Shareholders invest capital in the business and expect to earn a return. Within this group are also lenders and potential acquirers.
• Suppliers and vendors sell goods and/or services to a business and rely on it for revenue generation and ongoing income.
• Communities are major stakeholders in large businesses in their area. They are impacted by job creation, economic development, and health and safety. Business activity also affects the local environment, for example noise pollution or a smell coming from the factory would not be popular with local residents.
• Governments can also be considered major stakeholders in a business as they collect taxes from the company, as well as from the people who are employed by the company and from other spending the company incurs.

The 5 steps to engage with stakeholders

Engaging with stakeholders is crucial to the success of any organisation. Stakeholder engagement involves a company being responsible to all of its stakeholders by ensuring that they are involved and updated with the goings-on of the organisation. It is important to identify stakeholders early; consider getting stakeholders talking to each other, where appropriate.

You should seek to understand your stakeholders before you attempt to get them to understand you or your project; truly listening is an important part of this process. Leading with integrity will build trust, which should not be underestimated if you want your organisation to be a success. This also includes managing expectations, which are not always achievable or realistic and it is important to be clear and honest about this.

The 5 steps to engaging with stakeholders

• Identify – This involves identifying who your stakeholders are and your goals for engaging them. You will need to think about how to influence each stakeholder in different ways, according to who they are and what their interests are in your company, to achieve the results you want.
• Analyse – The better you know your stakeholders and the more you understand them, the more effective your engagement will be with them and, in turn, the more you can influence them. It is important to prioritise your time with them and allocate your resources accordingly. Take time to plan who you have to support you in the engagement process and what skills they can bring to help you. It is important to think about specific ways you can gather information from your stakeholders and gain insight into their ideas and perceptions of your project and what tools you can use to do this.
• Plan – It is important to draw up a campaign plan to communicate and engage your stakeholders. This involves thinking about who will be involved in each assignment, what approach you will take and the messages you will give about your company. You will also need to think about managing the feedback you will get, who will gather and process this, and what will be done in response to the feedback that you get.
• Act – This is where you will engage your stakeholders, understand their ideas and influence their attitudes. You may face resistance; this needs to be handled positively in order to remove it where possible. Having powerful insights will help you in managing the resistance you are facing.
• Review – Reviewing the success of the stakeholder campaign is crucial. This involves continuously monitoring and reviewing the outcomes of your communication with stakeholders and revising your plans where necessary. This also involves thinking about potential new stakeholders and how you are going to engage with them. It is vital to evaluate your activity at the end of a project and at regular intervals for longer or more complex campaigns. Through evaluation, you can ensure that you are meeting your objectives and targets and engaging with the right stakeholders. Be sure to invite further stakeholder feedback as this will improve the engagement strategy in the future. These are all good opportunities to learn.

You can further your knowledge and access some learning resources on stakeholder engagement.

Why is it important to engage with stakeholders

Stakeholder engagement is becoming more important than ever as businesses are under close scrutiny from regulators and the media. Successful projects have all engaged with stakeholders and community groups and have managed these relationships proactively rather than reactively.

When stakeholder engagement is done effectively, it improves communication channels between parties, creates and maintains support for the project, gathers information for the organisation, and reduces the potential for conflict.

This means establishing open and honest lines of communication. Stakeholders need to know what is happening and what is in it for them. It is important to put yourself in their shoes and treat them how you would want to be treated.

Internal stakeholders are important because the company is reliant upon them to work together to achieve the goals of the business. External stakeholders can affect the business indirectly. For example, customers could be lost to another competing company or they could change their buying habits in some way.

Suppliers can change the way they manufacture or distribute or the government could change a law or regulation which could have a direct impact on your company. It is vital to manage relationships with both internal and external stakeholders in order to see consistent and long-term success. For further reading and tips you may find the following guide useful gov.uk ensuring effective stakeholder engagement.

The benefits of stakeholder engagement 

• It offers those who will affect or be affected by the outcomes a chance to voice their opinion or concerns.
• It ensures that an organisation has greater clarity and a shared vision with its stakeholders.
• It enables an organisation to identify who its key stakeholders are and understand the relationship they have and what they expect from the organisation.
• It will give a better understanding of people’s needs at different levels.
• There will be increased opportunities for learning on both sides.
• It helps build relationships and partnerships that will generate value.
• It helps to reduce the level of risk within an organisation and improves governanc
• It will create more informed decision-making.
• It can identify strategies to gain a competitive advantage over other companies.

How to create effective stakeholder engagement 

People will only respond if they are engaged. Effective communication is vital, as is consulting with your stakeholders early and often. Developing meaningful relationships where the stakeholders feel valued increases trust which means that people work together more effectively. This can increase confidence, problem-solving and decision-making.

It is important to build a stakeholder engagement strategy, and there are some steps you can take in order to do this successfully.

Analyse your stakeholder

Never simply assume that you know who all of your stakeholders are; you will need to take the time to find out for certain. Cambridge dictionaries define a stakeholder as:

‘A person such as an employee, customer or citizen who is involved with an organisation and therefore has responsibilities towards it and an interest in its success.’

This can help you to identify both internal and external stakeholders. You can then map your stakeholders into four groups.

• Low interest, low influence – Those you need to keep informed. This may involve newsletters, websites, speeches, press and mailings.
• High interest, low influence – Those you need to involve and consult with. This may involve focus groups, task groups, visits and deliberative meetings.
• Low interest, high influence – Powerful stakeholders you need to engage. This may include open forums, round-table discussions, advisory groups, seminars, user panels and conferences.
• High interest, high influence – Partners you need to collaborate with, engage closely and influence actively. This may include joint planning, joint campaigning and press activities, partnership agreements, secondments and joint research.

Define your purpose

It is important to have a clear purpose in order to achieve effective stakeholder engagement. When what you want to ultimately achieve is clear for all involved, the engagement process becomes more meaningful. What you will need to achieve when engaging stakeholders will depend upon your sector and individual organisation.

Common purposes within the public sector include:

• Policy development.
• Development of shared services.
• Tourism development.
• Environmental initiatives
• Curriculum development.
• Healthcare campaigns.
• Crime reduction initiatives.

If you are in the retail sector, you may wish to engage with stakeholders to:

• Develop products.
• Refine product lines.
• Create special offers.
• Plan new retail outlets.
• Create a pricing strategy.
• Improve service levels.
• Redesign shop interiors.

By having a clear purpose you can identify relevant stakeholders and manage their involvement in the most appropriate way, working jointly with them, informing them, showing consideration or keeping them satisfied, depending on how active or influential they are.

Map available tools to identified stakeholders

Once you’ve identified your stakeholders and have a clear purpose, you can find the best tools to inform, consult or collaborate with them.

These can include things such as paper questionnaires, information roadshows, face-to-face meetings, stakeholder focus groups, stakeholder interviews, newsletter, emails, websites, podcasts and newspaper advertisements. For some further ideas on stakeholder engagement tools and how to plan and implement them, please see stakeholder map engagement tools.

Choose the most appropriate methods and technologies 

You will need to create a matrix of digital or traditional engagement tools. This doesn’t necessarily mean that you need to invest in lots of different methods and technologies which can be expensive and time consuming.

For both external and internal stakeholder collaboration you can use all of the following:

• Secure workspaces to gather information, share ideas or contribute to a common project.
• Stakeholder management allowing you to create teams, assign permissions, and tailor communications and access to each stakeholder.
• Secure file sharing with a full audit trail, document locking and notification emails.
• Team collaboration using tools such as co-authored documents, custom online databases, RSS feeds and discussion forums.
• Task and project management allowing you to manage, drive and evaluate stakeholder contributions.
• Consultation using questionnaires, polls and comment forms.

You can tailor these dependent upon your project and what you are aiming to achieve.