Stakeholder relationships are the connections organizations build with individuals or groups that are affected by or can affect their activities, such as employees, communities, investors, and governments. Building strong relationships fosters trust, improves decision-making, and increases project support, while poor engagement can lead to delays, resistance, or reputational risks.
Because stakeholder trust is central to long-term success, effective stakeholder relationship management is essential. In this blog, we'll explore the definition of stakeholder relationships, why they matter and why you need to manage them, and provide some key examples of ways to improve your stakeholder relationships.
Stakeholder relationships are the professional connections that organizations cultivate with individuals or groups with a vested interest in their projects, decisions, operations, and outcomes. These relationships form the foundation of the organization's trust, reputation, and long-term success.
Stakeholders include both internal and external parties:
It's important to note that while shareholders are a specific stakeholder with financial ownership and voting rights, the stakeholder model encompasses a wider group whose interests extend beyond financial returns.
Learn more about stakeholders and how to identify them →
Every organization has stakeholders, but not every organization manages them effectively. Passively acknowledging stakeholders without engaging them exposes you to numerous risks. On the other hand, active stakeholder relationship management means building trust, aligning interests, and maintaining consistent communication to keep your relationships healthy. Organizations that adopt an active stakeholder engagement approach are better equipped to adapt to change, secure support, and sustain long-term growth.
The following are some of the reasons why fostering strong relationships with stakeholders is essential:
Compliance and accountability: Many industries require meaningful engagement to meet consultation, environmental, safety, or quality standards. Strong stakeholder relationship management reduces errors that can trigger challenges or penalties.
Trust and reputation: Transparent and inclusive engagement builds credibility. When people understand goals and trade-offs, they're more likely to accept outcomes even if they disagree with parts of them.
More informed and aligned decisions: Stakeholders contribute practical knowledge that improves scope, siting, safety, usability, and mitigation. Early input from key stakeholders can help lower the need for redesign, rework, and reduce costs.
Risk reduction and issue resolution: By engaging with stakeholders, early identification of concerns, constraints, and dependencies can happen, which allows teams to address them before they escalate. Structured engagement reduces misinformation and late-stage surprises.
Schedule and cost control: Coordination with regulators, suppliers, partners, and internal functions prevents bottlenecks and unnecessary changes. Setting clear expectations and documenting and addressing commitments protects budgets and risks to timelines.
Inclusion and fairness: Proactive outreach to underrepresented or less vocal groups helps identify differential impacts and produces fairer outcomes, strengthening organizational credibility. To ensure all groups are engaged, it's important to have a way to analyze engagement data to identify identity gaps or missing groups.
Funding and approvals/permitting readiness: Funders, investors, customers, and regulators often look for evidence of adequate or credible stakeholder engagement, which includes demonstrated transparency and support, as well as ease of approvals and collaboration.
Operational continuity and resilience: Stakeholder relationships formed during the planning phase continue during delivery and operations, enabling faster incident response, better asset stewardship, and stronger readiness during disruptions.
A clear example of an organization or government's stakeholder relationships is a Canadian city engaging residents during a new transportation project, like a metro line expansion. Cities like Vancouver, Edmonton, and Halifax need to build relationships with the residents affected by the project. Engagement methods like open houses, online surveys, and information packages are used to gather input on the project objectives, such as street design. These civic engagement programs engage residents to collect their opinions, map community priorities, bring equity concerns to the surface, and feed public feedback directly into planning decisions and policy documents. Successful engagement with residents focuses on building positive relationships with them that will increase project legitimacy, reduce public resistance, and produce design choices that reflect local needs.
Why it matters: Transportation projects touch daily life (commuting, safety, business access). Early, structured stakeholder engagement prioritizes relationship building that helps secure buy-in, anticipate conflicts, and produce more equitable and durable outcomes. Research on transit project engagement participation shows continuous, transparent engagement with residents reduces opposition and improves project delivery.
Stakeholder relationships are continuous and adaptive. Effective engagement is not a single consultation or a one-off survey. It's an ongoing cycle of listening, responding, reporting (closing the loop), and adapting plans.
Discover how governments manage stakeholder engagement for large-scale infrastructure development →
Managing stakeholder relationships well requires using various methods, mindsets, and tools. Identify the stakeholders that matter, engage with them early, communicate with them often and consistently, and be transparent with them. Focus on accountability, measure relationship health, and use a process and tool to record your stakeholder interactions and log and act on feedback received.
Below are the core principles and concrete actions that help you better manage your stakeholder relationships:
Start by listing every person and group affected by or able to influence your project or organization. Use a stakeholder classification tool like the Power–Interest Grid to assess your stakeholders by influence, interest, and likely behaviour. Detailed stakeholder mapping helps you prioritize your stakeholders to focus your efforts and prevent costly blind spots.
Action: Create a living stakeholder register (lists of key stakeholders) and update it often.
Early engagement reduces surprises and resistance. Public-sector guidance recommends planning engagement as a multi-step process (plan → implement → analyze → report → evaluate), not a single consultation event. Early, structured stakeholder engagement builds legitimacy and surfaces constraints before decisions are locked in.
Action: Consider scheduling discovery sessions with the top ten priority/key stakeholders or stakeholder groups during your project initiation phases.
Clear expectations can help prevent some conflicts. Create a communication plan that defines who gets what information, when, and how (email, open house, public meeting). Keep messages short, factual, and consistent across channels so stakeholders aren't getting mixed messages or signals.
Action: Prepare and publish a one-page version of your communications plan for public consumption. Share it with stakeholders to be more open and transparent, and set expectations with them. Ensure you stick to this plan.
Transparency includes releasing documents that update stakeholders on project plans and show how stakeholder input was used and influenced decisions. Closing the loop and reporting on what changed because of stakeholder input builds trust and encourages future participation.
Action: After each project milestone, publish a short "You said / We did / Next steps" note. Accountability means logging commitments or promises made to stakeholders and following up on them.
Stakeholders differ in power, interest, and preferred communication methods. High-influence stakeholders may need one-on-one briefings, while community groups may prefer accessible open houses.
Action: Design engagement tactics to fit your stakeholder groups, not the other way around. Record each stakeholder's communication preference in your stakeholder relationship management (SRM) tool and review these preferences before engagements.
Frameworks like the 4R Analysis or the AA1000 Assurance Standard can guide engagement. Purpose-built Stakeholder Relationship Management (SRM) software centralizes contact information, engagement history, issues, commitments, sentiment, and actions or tasks, making engagement a more collaborative experience and helping ensure it is reportable and repeatable.
Action: Log every meeting, decision, and action item in your SRM; run a weekly "at-risk stakeholder" report.
Track indicators such as meeting attendance, response times, sentiment trends, and approval speed. Use those metrics to adjust your stakeholder engagement plan. Teams that measure and act on stakeholder confidence retain trust and accelerate outcomes.
Action: Choose three engagement KPIs, such as response rate, sentiment score, and closure time, and review them monthly.
Always attempt a private, face-to-face or video 1:1 to resolve issues before escalating. Escalation is a last resort and should follow documented governance, with clear decision rights and senior sponsors ready to mediate. This preserves relationships and prevents public blowups.
Action: Add an issue escalation on the flow to the communications plan (define issue levels and who to contact at each level, e.g., Level 2 vs. Level 4 conflict).
This in-depth guide explains how to manage stakeholder relationships with proven frameworks & tools→
Improving stakeholder relationships requires using the right process, people, and technology. When you close the feedback loop, adapt to stakeholder needs, and document follow-through on your promises, you can improve stakeholder trust, which reduces resistance and helps deliver better public outcomes.
Also, encourage continuous learning so teams adapt based on what works. Treat stakeholder engagement as iterative: run short post-engagement reviews, compare results to KPIs, and adjust the strategy. PMI and other industry sources highlight that organizations that measure stakeholder confidence and adapt are more likely to reach objectives and maintain long-term support. Make lessons learned part of the project close-out and the next project's kickoff.
Action: After each significant project milestone, run a retrospective session to review KPIs and outcomes and update your stakeholder engagement plan accordingly.
Jambo's Stakeholder Relationship Management platform helps your team close feedback loops, document actions, and adapt strategies based on real results, which builds trust and lasting support. Run post-project retrospectives, track KPIs, and ensure continuous improvement in every engagement.
Discover how Jambo makes stakeholder engagement more effective and accountable by booking a 15-minute demo.