There are some words that I dislike greatly, but that I find myself using because I can’t think of a better alternative. ‘Incentivise’ is one. ‘Disbenefits’ is another. But my all-time least favourite is far more commonplace: ‘stakeholders’. Yet while I cringe inwardly just typing the word, the concept is an important one. Indeed, your understanding of your organisation’s stakeholders could mean the difference between success and failure.
Stakeholders are the individuals, groups and organisations that have in interest in what our own organisations do. They may be affected by what we do. Or, more critically, they may themselves have the power to affect our activities or our ability to achieve our goals.
For public sector bodies, for example, stakeholders can include service users, the families of service users, funders, employees, volunteers, the Government, councillors, board members, other agencies and many more.
Stakeholders are important
In many cases, we rely on our stakeholders to help us to do whatever it is we do. Many organisations rely on volunteers to provide services, for example, or on their employees to go above and beyond what is written in their contracts. Others rely on external funders to keep the cash coming in and the wolf from the door.
Understanding and responding to the needs of our stakeholders is important. Because this is how we will gain – and maintain – their support for whatever it is we are doing.
The first step in engaging with our organisation’s stakeholders is to know who they are. The easiest way to do this is to make a list of (a) everyone (be it individuals, groups or organisations) who is affected by what we do, (b) everyone who has an influence on what we do, and (c) anyone else whose support is important to us or who has an interest in how well we do what we do. These are our stakeholders.
In an ideal world, we’d be able to have an engaged and personalised relationship with each of our stakeholders. It is more likely, however, that we have many stakeholders and limited resources to engage with them. In such cases, we need to prioritise.
The power / interest matrix
There are many ways to prioritise and inform engagement with our stakeholders, but my favourite is also one of the most straightforward. And, to be honest, one of the most useful. It’s called the ‘power / interest matrix’ and, like many useful tools, it takes the form two axes and four boxes.
The power / interest matrix asks us to categorise each of our stakeholders in two ways, each of which features on one of the axes of the matrix:
- the stakeholder’s power to influence our activities; and
- the stakeholder’s interest in influencing our activities.
If we allocate a ‘high’ and a ‘low’ option to each of these criteria, we end up with a two-by-two matrix like this:
We can then use the matrix to decide how – and how much – we should engage with each of our stakeholders.
- Low power / Low interest – Monitor these stakeholders, in case their level of power or interest changes, but don’t spend too much time on them or subject them to unnecessary communications.
- Low power / High interest – Keep these stakeholders informed and draw on their expertise when you can, but don’t let them boss you around.
- High power / Low interest – These stakeholders can cause you problems if you get on the wrong side of them, so keep them satisfied and try not to ruffle their feathers.
- High power / High interest – These are very much your key stakeholders. Engage with them, manage your relationship with them carefully and do everything you can to keep them on board.
Informing our engagement
It is not enough, though, to simply work through the analysis above, nod sagely and leave it at that. We need to actually use our findings to inform how we engage with different stakeholders and stakeholder groups.
In engaging with these stakeholders and stakeholder groups, we need to think about two things: content and form.
The content of our engagement will depend very much on what it is we are doing and what interest our stakeholders have in our activities. The form of our engagement will be influenced heavily by (a) the results of our power / interest analysis and (b) the communications preferences of our stakeholders.
In both of these cases, we need a good understanding of our stakeholders. We need to know about their specific interest in what we are doing, as well as about how they would like us to communicate with them.
Planning our engagement
Once we know these things, we can plan our engagement with our stakeholders.
Obviously, your own stakeholder engagement plan will – or, at least, should – be individual to your organisation. And depending on the nature and number of your stakeholders, it might be quite complicated. But a reasonably simple version could look like this:
Once you have a stakeholder engagement plan in place, it’s ‘simply’ a matter of engaging with your stakeholders in accordance with your plan, confident that you’re directing your efforts where they can have most impact.
I would, however, encourage you to revisit your power / interest analysis every once in a while, to check that none of your stakeholders have slipped into a different ‘box’ without you noticing. This is especially important if anything significant changes either in how your organisation works or in the external environment in which it operates.
Please bear in mind also that you don’t have to follow your engagement plan too slavishly. Its aim is simply to help you to engage with your stakeholders effectively and in a way that is proportionate to their role in helping you to achieve your goals. It’s no substitute for actually listing to your stakeholders and responding to their needs.
Because much as I dislike the word, stakeholders are important. And we would all do well to engage with and listen to them a little more than we do at the moment.