The ultimate guide to stakeholder management

When it comes to running a business or managing a project, regardless of your style of leadership, you’re never truly operating alone.

Your business is part of a bigger picture, and it’s accountable to a whole bunch of people and groups. We’re talking about your employees, your customers, the manufacturers you buy stuff from, the investors who believe in you, the regulators keeping an eye on things, and sometimes even the general public.

All of these things combined become something called “stakeholder management.”

In this comprehensive guide, we’ll show you how to keep them informed along the task journey, strengthen your relationships, and manage your stakeholders effectively using key strategies and project management.

What is stakeholder management?

Stakeholder management is essentially about understanding how to keep everyone who is invested in your business informed and happy.

It’s about figuring out what all these different people want, what worries them, and what they expect from your project or business.

If you don’t have a clear plan to handle your stakeholders, you might lose their support and all the valuable insights they can offer. If you ignore them or don’t talk to them properly, it can lead to some pretty serious problems that might put your business at risk. So, it’s worth giving it some thought!

Now that we understand what it is, let’s get into the strategies.

Stakeholder management: key skills, strategies and techniques

You can never have too many skills up your sleeve as a business person, because with new skills comes more potential for the successful realisation of your goals. Below we detail a few of the most important skills to master:

• Empathy: this skill will allow you to understand the perspectives and feelings of others. Stakeholders may have different interests or concerns from yours in terms of realising a project, and empathy will help you build trust and rapport.
• Active listening: ensures you will identify the true meaning behind what is being said and take it onboard. For example, setting up a think tank with project-based consultations to garner specific and direct feedback in the development of new products and services. When you do this, you can respond appropriately to any questions or concerns.
• Assertiveness: this shows people you are confident and clear about your purpose or mission, increasing trust, credibility, respect, and buy-in with your stakeholders.
• Negotiation: enables you to find mutually beneficial solutions that meet the needs and expectations of all parties involved. Plus, respectfully communicate what is and isn’t feasible while also brainstorming alternative solutions.
• Time management: effectively planning out what parts of your project need completing and when. For example, using a project management system to ensure that the project stays on schedule. 
• Prioritisation: knowing which tasks, elements, or people are the most important. This can be accomplished by using a simple matrix to gauge their interest in your project and maximising the potential support you can garner from them.
• Accountability: clearly defining accountability is important for stakeholder management because it fosters trust and credibility with stakeholders, and ensures that you are responsible and transparent in your decision-making and actions.
• Risk assessment: identifying situations, activities, or events that may negatively impact your business or project (including assets, reputation, and profitability) is necessary for effective stakeholder management. This involves analysing the potential risks and developing solutions and business contingency plans. 
• Critical thinking: being able to analyse information, insights, and ideas from multiple sources to inform decision-making for the best outcomes. 

Step 1: Define the project scope

What is it you’re trying to achieve?

Identify the goals and objectives of your project, including the tasks that need to be completed, and the resources that will be required.

Objectives should always be SMART. By this we mean specific, measurable, achievable, relevant, and time-bound. This will help ensure that everyone involved in the project understands what needs to be achieved, why, and the timeline for completion.

Step 2: Identify key stakeholders who are relevant to the project

Next, identify your key stakeholders. This could be anyone who has a vested interest in your project; could contribute to its success or failure in some way; or may be affected by your objective, whether it’s positive or negative. These could include customers, clients, suppliers, employees, investors, government agencies, regulators, or even local or national community groups. 

To identify these stakeholders, you should consider these questions:

📝 Who will be affected by this if the project succeeds?
📝 Who will be affected by this if the project fails?
📝 Who do I WANT to be affected by this project?
📝 Who do I not want to be affected by this project? 

In any business, project, or campaign, it will be helpful to consider a portion of your stakeholders as ‘active’, and the other portion as ‘inactive’.

The main difference between them is that active stakeholders are actively involved in the project or business goal as they have a part to play in it. This includes employees or people you may need to liaise with to get your project approved, such as building owners or regulators.

Your inactive stakeholders don’t have any active responsibilities to play in the execution of the project,  including those whose sign-off is required, or who need to be kept informed out of courtesy.

Active and inactive stakeholders will, of course, need different levels of communication. For example, you’ll want to focus on the project timeline with your active stakeholders. While creating a plan to provide feedback, launch surveys, or start a PR campaign is for your inactive stakeholders and supporters. 

Project management software is an excellent tool to keep track of all these different activities and communication commitments. 

Step 3: Create a project plan

After engaging with stakeholders, it is important to develop a detailed project plan that outlines the timeline, milestones, and deliverables while still incorporating stakeholder feedback and insights at relevant points. 

An excellent tool for this is a Gantt chart.

It is a colour-coded graph that illustrates when tasks need to be completed within overall project timelines. With this, project members can easily spot where conflicts or delays might occur, or where tasks and timelines may overlap and leave employees overwhelmed. This will give you the foresight to have contingencies in place. 

There are multiple ways you can organise a Gantt chart, from different tasks and responsibilities to individuals or entire departments – you’re basically only limited by your imagination.

In our recent assessment of the best Gantt charts for small businesses, we highlighted Asana’s ‘Timeline’ chart as working well for teams that are focused on consistent output as opposed to hard deadlines, such as content production. The view is drag-and-drop, meaning business owners can change things like the due date of a task with ease.

Step 4: Communicate the plan

For this part of the management strategy, we’ll need to ensure that all active stakeholders are aware of the project plan and their respective roles and responsibilities. 

Regular communication throughout the project is an essential part of ensuring that everyone stays on track and any issues are raised and addressed in a timely manner. For this, you can use a RACI chart.

A RACI chart is a type of project management software that easily allows you to track individual, team, or departmental roles, responsibilities, and accountabilities. 

It gives you an overview of people’s strengths, skills, and time to benefit the project in the best way – and ensure delivery within the allocated time frame and budget. 

Startups’ top recommended platform for building a RACI chart is monday.com, thanks to its modern template design and a high score of 3.8 out of 5 for collaboration. It’s also one of the most affordable options for SMEs. 

Lauded for its huge library of over 200 attractive templates, these are all colour-coded with a catalogued, traffic light system so you can get an instant update on the status of a project.

The RACI chart keeps one or more of the designated stakeholders:

• Responsible for completing or fulfilling specific tasks or activities
• Accountable for the tasks or activities, ensuring they are completed to the required standard and within the agreed timeline
• Consulted for their opinion and input before a decision is made or action taken
• Informed of progress or outcomes, but are not directly involved in the task or activity

Step 5: Utilise feedback from stakeholders

Some stakeholders will have unique skill sets, expertise, or requirements that will be crucial to the successful completion of your project, so you’ll definitely need to factor in their input at key stages.

Again, project management software is the best way to record and action stakeholder ideas, insight and input. It also allows for visibility, shows everyone’s progress, and keeps them informed about the elements of the project that affect their interests. Here is a guide to the best free project management software out there right now.

Step 6: Monitor progress

This needs to happen continuously and adjusted as necessary. You’ll need to track tasks and milestones, identify and resolve issues, assess risks with each step of the plan and, you guessed it, manage the stakeholders (their questions, concerns, and feedback).

Don’t be afraid to tweak and change things. As long as you keep any changes communicated with your stakeholders, it’s an essential and productive part of moving the project forward. 

You may not always get things right the first time, but you can absolutely allow for course correction along the way.

Effective stakeholder management: the benefits

Effective stakeholder management is critical for the success of any project and leads to a range of positive outcomes, such as increased engagement, better decision-making, and improved outcomes.

Let’s elaborate on these benefits:

Benefit: improved communication and better understanding of needs

Proper stakeholder management can also improve project outcomes, as businesses can ensure that they are delivering on stakeholder needs and expectations. This can lead to higher levels of satisfaction, loyalty, and repeat business from customers, as well as reduced risks and costs. 

Conclusion

While communication, organisational and analytical skills are all essential when it comes to stakeholder management, you will also need the best project management software to help you balance competing needs, voices, and resources, prioritise essential activities, and monitor progress.

Combined, these will ensure the best chance of achieving the desired outcome as well as keep your stakeholders happy.