Stakeholders are directly affected by the actions and results of a company and can have a major impact on the overall success of a company. Because of this, knowing who a company’s stakeholders are, how they impact and are affected by the company, and how to properly communicate with them is extremely important to the overall success of a company. In this article, we discuss what a stakeholder is, how to identify different types of key stakeholders and how to effectively communicate with your stakeholders.
What is a stakeholder?
A stakeholder is an individual, group or organization that has an interest in the success of a company or a project. A stakeholder can be both internal or external to the company and different stakeholders may have varying levels of interest and priorities. A stakeholder can both be impacted by and affect the outcome of a project or company’s success.
Different types of stakeholders
There are several types of stakeholders but they typically fall into one of two categories: internal or external stakeholders.
Internal stakeholders work within the company and include people like employees, supervisors, managers and directors. Regardless of where someone falls within your organization, they can have a major impact on the success of your company. Properly communicating the mission and values of your company and the purpose of the responsibilities of each employee helps assure everyone is working together for the success of the company.
External stakeholders are individuals who do not work within the company but who still have an interest or impact on the success of the company. They include people like investors, shareholders, customers, partners, labor unions, government agencies and the local community.
Investors are the individuals or organizations who help financially fund your company. Because they have a financial investment in your company’s success, they may have the right to review financial statements and approve or turn down major business decisions. Shareholders are individuals or organizations who own at least one share of stock in your company. The amount of interest and influence a shareholder has in your company is usually determined by the percentage of shares they own.
Customers are the individuals or organizations who purchase the goods or services your company offers. Customers impact the success of your company because they choose whether or not to buy the products or services you are offering. Partners are the companies or organizations your business relies on to be successful, such as distribution partners and suppliers.
Labor unions are organizations formed with the intent of protecting and furthering the rights and interests of trade workers and professionals. Such organizations may be stakeholders within your company if your employees are members of the labor union or you need to consult with them regarding topics such as workplace safety. Government agencies may impact your company when there are regulatory agencies within your field, such as with insurance and medical industries.
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Questions to help you identify key stakeholders
Properly identifying and prioritizing your organization’s key stakeholders is important because it helps you understand who you need to communicate with when making decisions or changes that impact the success of the business. Here are a few questions you can ask yourself to identify the key stakeholders in your organization:
Who has a direct impact on the success of a project or of the company?
Who has the authority to make financial decisions that impact the company?
Who has an interest in the success of the company?
Can the company continue to exist and succeed without the individual, group or organization?
Who is responsible for testing and using the end product or service?
Who performs the work that makes your company or organization successful?
Answering these questions can help you determine whether someone is a stakeholder and can help you analyze which stakeholders are more important than others.
Why effective communication with stakeholders is important
Proper communication with stakeholders is important to your organization because it ensures they have the information that is relevant to their interests and needs and helps build a positive relationship between you and your stakeholders. Effective communication with stakeholders includes an open dialogue that helps you make more informed decisions, manages stakeholder expectations and improves your company’s chance for success.
How to properly communicate with stakeholders
Follow these steps to communicate effectively with your company’s stakeholders:
Identify your target audience.
Establish goals and make a plan prior to communicating.
Listen to and acknowledge the views of your stakeholders.
Set and clarify stakeholder expectations.
Follow-up on promises and ask for feedback.
1. Identify your target audience
The first step to any successful communication is to know who your target audience is and the right way to speak to them. It is important to use the tone and style appropriate for the audience you are communicating with. For example, the way you communicate with your employees will likely be very different from the manner in which you communicate with your customers. These two different groups of stakeholders will also likely have very different areas of interest within your company.
2. Establish goals and make a plan prior to communicating
The next step is to establish what your goals are and create a clear plan for how you will achieve those goals. Think about what issues need to be resolved or what topics you want to address and then make a plan for how you will discuss these topics with your audience. For example, is the purpose of your communication to inform stakeholders of something or to persuade them to do something? While you are planning what topics you want to communicate with your stakeholders, try to think about what you can do to engage them in a dialogue.
3. Listen to and acknowledge the views of your stakeholders
When you are communicating with stakeholders the conversation should be a dialogue rather than a lecture. It is important to actively listen to the views and concerns of your stakeholders and make sure you acknowledge and address those concerns. Doing this will help you maintain a positive, long-term relationship between you and your stakeholders.
4. Set and clarify stakeholder expectations
Transparency is important to assuring both you and your stakeholders are well-informed and maintain a happy working relationship. When communicating with stakeholders, you should make sure any promises you make are clear and also ensure you clearly understand the expectations your stakeholders have of you and your company. Doing this helps minimize misunderstandings.
5. Follow-up on promises and ask for feedback
Finally, after you have finished communicating with your stakeholders it is important to follow-through on the promises you made to them, follow-up to make sure they keep any promises made to you, and ask them to provide any feedback they have.