24 September 2021

Stakeholder engagement and why your business needs it

What is Stakeholder Engagement?

The term stakeholder is used to determine individuals or groups of people who have an impact or can impact a business or organisation.

R. Edward Freeman first used the phrase in 1984, in his text Strategic Management: A Stakeholder Approach, when he described stakeholders as:

“…any group or individual who can affect or is affected by the achievement of the organization’s objectives.” 

Stakeholder engagement should be viewed as a positive opportunity to inform, consult, influence, learn from. To analyse information from people surrounding your business, and to help you gain the best outcome on how you share your communications.

Identifying Your Stakeholders

So how do we work out the impactful people surrounding our business or organisation? A good place to begin is with a brainstorm of all of the people who are impacted by your project or business, or who might hold influence over the outcome – good or bad. This could be co-workers, community groups, customers, shareholders, residents, regulators, politicians…the list could be varied depending on your business.

Once you have generated your list, you’ll need to work out the priority of your stakeholders, by deciding on the power and interest that they have in your work

We can do this by stakeholder mapping. Quite literally, making a map of who they are and at what level they interact with our business. Only then can we address how we can engage with the relevant people in a human, respectful and engaging way.

Aubrey Mendelow (1991) created a power-interest matrix to help identify the importance of stakeholders within and beyond an organisation. Stakeholders can be both internal and external and both groups should be considered.

Here are the four levels of power-interest and a general breakdown of meaning:

  1. High power, high interested stakeholders (ENGAGE and CONSULT) = fully engage with these people and groups, paying close attention to expectations.
  2. High power, less interested stakeholders (KEEP SATISFIED) = maintain contact and messaging without excess.
  3. Low power, highly interested stakeholders (KEEP INFORMED) = engage, inform and ensure smooth communications.
  4. Low power, less interested stakeholders (MONITOR) = monitor with low-level communications

Why You Should Have a Stakeholder Engagement Strategy

For projects, campaigns and launches, it’s crucial to analyse, understand and strategically reach the people who can support your endeavours. And conversely, who negatively impacts what you’re trying to achieve. By laying the good groundwork in identifying and engaging with all of your relevant stakeholders, you’re more likely to succeed in your project and messaging mission.

If you need help determining your stakeholder engagement strategy, Limitless can help you with a clean and clear process. Contact Michael Gregory for an informal chat on 0845 625 0820 or you can message us here.

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