Have you heard the word ‘stakeholder’ thrown around but you are unsure who the magic ‘stakeholder’ actually is? Maybe in your previous company, someone referred to shareholders as ‘stakeholders’ but then once you entered the new business, ‘stakeholders’ became your colleagues from another department? Are you confused by what it actually means and why different businesses can refer to different types of stakeholders? Or maybe you’re not even sure why you should even care about who your stakeholder is? Don’t worry, in this article, we will cover all these bases.
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Who are stakeholders in a business?
A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers.Investopedia, 2021
Most sources divide stakeholders into internal – the ones inside your company, such as other employees, and external such as customers and suppliers.
Let’s use an example. If you are a Project Manager supporting a launch of Product X, you might have a range of stakeholders, whose opinions you need to take into consideration.
Your internal stakeholders will vary depending on the product and the situation, but it is quite likely that these will be:
- your boss – afterall, they are interested in your performance
- internal product team – the people who designed it
- marketing team – as you work with themon the launch, they will be very invested in the process
- sales team – you might need to understand how they are going to sell the product
- operations – you might need to work with them on when the product will be available
- other teams, like HR or IT, depending on the project and the product
The internal stakeholder can be pretty much anyone employed by your company. The important part is to establish who are the actual stakeholders for these particular products and identify specific people to help you move the project forward.
For example, your internal marketing team might have a marketing director, a couple of managers, and a team of specialists. If the project you are working on is a standard launch, it is very likely it will be handled by the manager and one or two specialists. Make sure you understand who is the main person there – is one of the managers taking the ownership of the project, or is it one of the specialists? Or maybe it is a more challenging project and it is handled by the director? Speak to the team and ask them questions – you can use Stakeholder Questionnaire – 33 prompts to help you better understand your stakeholders – this will help you understand who is your number one stakeholder in this group to deal with.
Your external stakeholders might be a bit harder to navigate and question. They are not employed by your company and can consist off:
- customers – the people who are potential buyers for the product you are launching
- shareholders – the people who have invested in the company and are looking to make some money from the launch
- suppliers – you might need to develop some understanding when can they provide any missing components or what’s heir capacity during the launch
- and others – such as government bodies or society as a whole
How to categorise stakeholders?
Stakeholders are a tricky bunch. As you could see from the internal example, identifying the marketing team as stakeholders is not enough. We are interested in who the individual is and how much power do they actually hold.
If you are interested to learn more about stakeholders – drop your email below. We will be covering this topic in a couple of weeks and you will be able to access the stakeholder mapping tool to help you track your stakeholders.
The most important aspects of your stakeholders are the level of influence and level of interest they have in your project.
Level of influence
When deciding who is an important stakeholder for you and your project, it is worth considering their level of influence. This means, how much actual power to make decisions the person does have?
People with high influence are usually directors or managers responsible for the project, but can also be other people, if they were given a specific responsibility for the project.
Level of interest
The second most important thing to consider when categorising your stakeholders is their level of interest.
You might have a director who has a high level of influence, but they might not be interested at all in your project. You might still consider them as your stakeholders but you want to focus most on people who have both high level of influence and high level of interest.
Why should we care about the stakeholders?
So why are stakeholders important? As mentioned in previous paragraph, some of them might have high levels of influence over your project and make or brake it, or they might have high level of interest and might have important insights into what you are trying to achieve.
A well managed stakeholder communications can affect the success of the project. I have seen situations where the poorly managed stakeholder relationship was prolonging a project to last over a year, whereas it could have been implemented much smoother.
We often forget that our work and life are interconnected. The people you are engaging with they all have their own goals and objectives, make decisions, have lives which may be affected by the project or the company, etc. Yet very often we enagege with others as our work was a completely separate topic and had different rules to be successful. It is not. Next time you are approaching someone at work, have a think how would you approach them if you were at a friend’s party? Would you approach them straight on, tell them you credentials and ask for help? No, you would engage in a conversation to get to know them and build it from here.
You might have been in a situation before where you needed information from another co-worker. Maybe you even setup a meeting to build the relationship and discuss what you need. But weeks went by and you haven’t received the required information. You followed up with an email only to hear crickets. Sounds familiar? (this article talks in more detail about this, and how to get more traction with stakeholders). This is how most projects get delayed. If your stakeholder doesn’t see your request as of high importance to them, they will very often prioritise other request or their own projects.
Think about it, if someone drops you a message asking you to do something or provide a piece of information, which would take you 15 minutes or longer, are you likely to jump on it straight away? Probably not. You would check your own task list, prioritise and then get to work based on your priorities, not the priorities of others.
So why do we need to care about stakeholders? We need to care about them as we need them to succeed with our projects and with our roles. Communication is a highly sought after skill as surprisingly small amount of people can actually communicate effectively within work environment. The higher you are planning to move on the corporate ladder, the more likely you will be required to manage stakeholders and be proficient in communication skills.
Who are ‘stakeholders’ and why should we care about them?
I hope you have now a better understanding of who stakeholders are and why do we need them on our side to be successful not only with the projects but also with our careers.
If you are not sure where to start with engaging your stakeholders, make sure you download Stakeholder Questionnaire – 33 prompts to help you better understand your stakeholders.
I hope this have helped you to understand better who are stakeholders and how important it is to manage the relationships with them. If you have any more stakeholder-related questions, drop them below, I would love to hear from you.