What is Stakeholder Engagement
Engaging stakeholders is essential for any organization or business to succeed. While fundamentally different from stakeholders management, stakeholder engagement is also created for handling stakeholders. An effective stakeholders engagement strategy involves understanding and engaging with people who have a stake or interest in the organization. In this article, we will discuss what is stakeholder engagement and the importance of coming up with an effective strategy.
What is Stakeholder Engagement?
Stakeholder engagement is a process used by an organization to improve communication with their stakeholders. This process involves identifying, mapping, and prioritizing the stakeholders to identify the most effective way to communicate. An effective communication between an organization and their stakeholder is important in building trust, mitigating risk, and improving the decision making process.
Who are the stakeholders?
Stakeholder is the term used to refer to individuals or groups who have an interest in, or have an influence in, an organization’s activities. Stakeholders exist both as internal or an external part of an organization.
- Internal stakeholder
Internal stakeholders refers to people with interest in an organization through a direct relationship, such as employment, ownership, or investment. An example of internal stakeholders is shareholders who will be directly affected by the organization’s action and performance..
- External stakeholder
External stakeholders do not work for or have any direct relationship with an organization, but they are affected by the actions of the business. Some examples of external stakeholders are the suppliers, creditors, and general public who are indirectly affected by the business decisions.
How to Engage with the Stakeholders?
In order to engage with the stakeholders, there are 4 key components that you will need to implement in the process. Those components are:
- Identify
Identify all of the existing stakeholders which includes both internal and external stakeholders. Some stakeholders, like the project manager, may be more visible due to their involvement while some others, for example an investor, might be less apparent.
- Analyze
The best way to analyze your stakeholders is by creating a map to define each stakeholder based on their importance and influence to the organization. This will help your organization identify and efficiently use the available resources on stakeholders with higher interest and need for information. You can start by creating questions based on these points:
– Contribution : Does the stakeholders have the necessary information or expertise that would be helpful to your organization?
– Relevancy : Would the process be affected if the particular stakeholder is not being involved in the process?
– Influence : How large of an influence does the stakeholder have, and toward whom?
– Engagement : Is the stakeholder open to being engaged?
- Communicate
Creating a communication plan is important as it will affect how well your stakeholders are informed regarding your organization. A communication plan is an outline of how to provide your organization’s information to your stakeholders. There are two key points you need to identify in order to create an effective communication plan:
i. Available communication channels : Start by identifying which communication channels your team regularly uses and what is each communication channel used for.
ii. Type of communication each stakeholder will need : This includes figuring out how and which info you will need to communicate to the specific stakeholders.
- Feedback
The stakeholder’s behaviour might change throughout the engagement process, so remember that the key points and strategy you have come up with will need to be flexible and open to changes. You can continuously collect feedback from the stakeholders and use it to continuously improve your engagement strategies.
Benefits of an Effective Stakeholder Engagement Plan
- Better understanding: An effective stakeholder engagement plan can lead to a deeper understanding of stakeholder needs and concerns, and their understanding of your organization.
- Effective decision-making: Engaging with stakeholders can help organizations make more informed decisions with a higher success rate.
- Risk management: By identifying and addressing stakeholder concerns, organizations can mitigate risks better and improve accountability.
- Prevention of project roadblocks: An effective communication and collaboration with stakeholders can help prevent issues in a project which might cause it to be delayed and cause unnecessary waste of resources.
- Build trust: Engaging with stakeholders in a transparent and respectful manner can foster trust and strengthen two-way relationships.
- Improved sustainability: Stakeholder engagement can help organizations identify and address sustainability challenges. This will ensure your organization will be viable for a long-term.
Common Mistake in implementing stakeholder engagement
- Misidentifying or overlooking some key stakeholders: Failing to identify all of the important stakeholders can result in missed opportunities and potential disagreements further down the road.
- Misunderstanding of expectations: Misunderstanding of the stakeholder needs, concerns, and expectations can make it difficult to communicate effectively and work together.
- Failure to manage stakeholders appropriately: Failing to properly manage stakeholders based on their influence and interest levels can lead to misalignment and dissatisfaction.
- Failure to communicate: Neglecting to provide stakeholders with regular updates and information can damage trust and lead to misunderstandings.
- Ignoring risks: Failing to identify and address potential risks associated with stakeholder engagement can lead to negative outcomes.
Conclusion
An effective stakeholder engagement is essential for the success of any project or organization. By identifying, analyzing, and engaging with key stakeholders, organizations can implement an effective stakeholder engagement strategy to build trust, improve communication, and improve decision-making processes. Contact us to know how you can implement an effective stakeholder engagement strategy in your organization.