Understanding what a stakeholder is is essential for anyone managing projects, leading teams, or driving organizational change. Stakeholders can have a powerful impact on your goals, whether they support your vision or present unique challenges.
In this blog, we'll explore what a stakeholder is, different types of stakeholders, why they matter, and how identifying the right stakeholders can set your project up for success. We'll also explain how you can start engaging your stakeholders to build better relationships, which is the cornerstone of successful business operations.
What is 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 can heavily influence whether your project is smooth sailing or encounters friction along the way. 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 lead to a seamless path to 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 mining and energy production sectors. Communicating and developing relationships ensure organizations comply with regulatory requirements to achieve project permits or development licenses. If stakeholders feel 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. These days, stakeholders can easily tarnish a company's reputation. 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 with them effectively. To identify your stakeholders, we recommend performing a stakeholder analysis.
What is stakeholder analysis?
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 to stakeholder analysis to help you identify your key stakeholders and prioritize them by their influence.
Once you understand your key stakeholders, you can allocate resources accordingly. This includes your time, budget, and communication resources for the most effective engagement.
Download the free stakeholder analysis template to understand your stakeholders better →
How to engage with your stakeholders
Developing and implementing a comprehensive stakeholder engagement plan is essential to effectively communicating with and engaging your stakeholders. 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, ensures 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.
Stakeholder Relationship Management (SRM) tools like Jambo provide an easy way to track all data related to stakeholder communications, expectations, next steps, and more. An SRM removes the hassle of using multiple spreadsheets and enhances transparency among team members and stakeholders.
Delve into stakeholder engagement software and what it can do for your team →
