Stakeholders are key to project success.
We know all too well that clear goals and precise planning lay the groundwork for any project. But have you ever considered the real driving force behind project success? The individuals and groups whose voices, interests, and decisions can ultimately make or break project outcomes. Whether in government, industry or non-profit sectors, ‘stakeholders’ are a part of every industry. So, who are we referring to, and why are stakeholders instrumental for success?
In this blog, we'll explore the definition of a stakeholder and look at the different types of stakeholders. We'll also explain how you can start engaging your stakeholders to build better relationships with them, which is the cornerstone of successful business operations.
What is the meaning of a stakeholder?
A stakeholder is any individual, organization, or group that has a vested interest in the success or failure of a project or organization. Stakeholders may be directly involved in or significantly affected by decisions and activities. Moreover, their actions, perspectives, and needs can heavily influence outcomes. As essential partners, they are critical in shaping and achieving organizational or project goals.
To simplify, stakeholders:
- Pursue their own priorities, goals and ambitions
- Hold the power to make decisions that can impact your project or organization
- Are impacted by your organization's choices
- Can be affected as projects evolve
What are the types of stakeholders?
There are two main types of stakeholders:
- Internal refers to stakeholders found within the business. Examples of internal stakeholders include:
- Team members
- Managers and executives
- Owners and shareholders
- External refers to those outside of the business. Examples of external stakeholders include:
- Customers, clients and subscribers
- Suppliers and contractors
- Investors and funding partners
- Local communities and business owners
- Landowners
- Indigenous communities and rightsholders
- Government officials
- Regulatory agencies and boards
- Advocacy groups and NGOs
- Media and the public
Why are stakeholders important to your project's success?
Stakeholders may heavily impact whether your project will be smooth sailing or encounter friction along its path. Fostering positive relationships with stakeholders is key to your project's success, as they:
- Influence business operations
The general sentiment of your key stakeholders counts. If they feel heard, seen and valued, they are more likely to support your initiatives, which can translate into a seamless path for success. The opposite scenario can cause costly delays, resistance and misunderstandings.
- Bring unique perspectives and insights that can improve projects
Stakeholders lend diverse perspectives and bring expertise to the table. Building a relationship with stakeholders can help organizations meet expectations, identify and address community concerns, explore new opportunities, and develop solutions that benefit everyone.
- Can stop companies from receiving regulatory approvals
Engaging with stakeholders isn’t just good practice, it’s often a legal or regulatory requirement in sectors such as mining and energy production. Communicating and developing relationships ensure organizations comply with regulatory requirements to achieve project permits or development licenses. If stakeholders feel like they weren't engaged meaningfully, they can push back on project approvals.
- Control how people see a company's reputation
Effective and open communication with stakeholders instills confidence and trust. Stakeholders can tarnish a company's reputation easily these days. As a result, organizations that build positive relationships with their stakeholders are less likely to face public opposition and poor feedback.
How to identify your stakeholders
Having gained an understanding of stakeholders in general, it’s time to identify who they are, specifically to your project, and implement a plan to engage effectively with them. To get started with identifying your stakeholders, we recommend performing a stakeholder analysis.
What is a stakeholder analysis?
A stakeholder analysis is the systematic process that involves identifying who is involved or affected by your project, evaluating their levels of interest and influence, and prioritizing engagement accordingly.
There are five main steps of stakeholder analysis to help you decipher who your key stakeholders are and prioritize them based on their influence.
To learn more about this process, check out our blog: What is stakeholder analysis, and why is it important? →
Once you understand your key stakeholders, you can use this information to devote your resources accordingly. This includes your time, budget, and communication resources for the most effective engagement.
How to engage with your stakeholders
Developing and implementing a comprehensive stakeholder engagement plan is essential to communicate and engage with your stakeholders meaningfully. With multiple team members interacting at various touchpoints, stakeholders often encounter a range of communication styles, channels, and response times. Without a structured plan, this can lead to miscommunication, overlooked correspondence, and misaligned expectations. Establishing a clear engagement plan minimizes project risks, enhances resource management, and, most importantly, can ensure you are working towards fostering lasting trust and positive relationships with your stakeholders.
How to track engagement with your stakeholders
For any effective engagement plan to work, the project team needs to provide some form of tracking and reporting. Tracking includes collecting, organizing, and analyzing all stakeholder interactions, feedback, and involvement with your stakeholders.
You might be interested in our blog, 8 steps to effectively track your stakeholder engagement. →
Stakeholder Relationship Management (SRM) tools like Jambo provide an easy solution for tracking all data related to stakeholder communications, expectations, next steps, and more. It removes the hassle of using multiple spreadsheets and enhances transparency among team members and with stakeholders.
Interested in learning more? Check out our 1-minute introduction to Jambo.
