Stakeholders are the people that, individually or together, control a substantial portion of a company or activity. In a simple definition, a stakeholder is someone whose support makes a product or activity successful. In a more complex definition, a stakeholder may be someone who has direct influence over the product or activity, or his value depends on the success of the product or activity. In more current usage, the term stakeholder refers to anyone who has an interest in, or knowledge of, the business. Sometimes this knowledge or interest is used in the context of financial or business matters.
stakeholder – An individual or group of individuals who have an interest in or a direct experience of a business or organization. Stakeholders are also known as associates, suppliers, customers and consumers. Stakeholders are designed around activities such as managing customer relations, customer service, brand building and other areas.
Stakeholders are difficult to identify at times. A common approach for managers is to use surveys or focus groups to identify “key” stakeholders. These can be categorized as people who have an interest in, or know about, the product, but not necessarily ownership of it. Another approach uses value extraction from data sources to identify unmet needs. Yet, another way to categorize stakeholders is by assigning points, often based on financial metrics, for each level of a project and asking what actions would best benefit the stakeholders or their companies.
The challenge is there is no perfect formula for defining and identifying stakeholders. It can be a tricky task to get across to businesses how their interests are best served by the business. There are some companies that use surveys to identify customers or potential customers. Other companies use data to evaluate stakeholder representation in organizations. Yet another approach that can be used for getting stakeholders to participate in stakeholder management software is for the stakeholders to “lend” their support to the software development team. Through this process, the team will identify areas of strength where the stakeholder can be a positive contributor.
Stakeholder management software provides a valuable tool for evaluating and managing stakeholder involvement. Through the use of web based tools and software engineering, stakeholder engagement can be easily measured, tracked and analyzed. This means that when the business needs to make changes to the ways they engage with their stakeholders, stakeholder involvement can be closely monitored. Stakeholders are easier to identify and measure, and the steps taken to gain stakeholder approval of any changes can be easily tracked and evaluated.
Effective management of stakeholder relationships is necessary if the business needs to grow and remain competitive. The key is in developing a strong and effective stakeholder management plan. Stakeholder engagement activities must be supported by a strong stakeholder management plan. A stakeholder management plan can address the various issues concerning stakeholder relations, and it can lay down the foundation for future stakeholder relations activities. It is very important for businesses to have a stakeholder management plan in place, because without one, it’s possible that the business will lose stakeholders to competitors who are better at managing stakeholder relations.
Another benefit of having a stakeholder management plan is that stakeholder relations may be improved through legislative changes. For instance, some stakeholder groups may feel that they are being ignored by a company because no action has been taken to address their concerns. Stakeholders can also become mavericks if a legislative change is effective. They may decide to somehow increase their stake in a company by taking a direct action or making a speech to the shareholders. Such initiatives are often perceived as illegitimate because of the fear of losing their membership in the company. By having a stakeholder management plan, such incidents can be prevented and therefore avoided.
Another advantage of a stakeholder management plan is that it can lead to a self-sustaining engagement strategy. If the stakeholders in an organization become used to a particular activity, there is a high chance that they will continue to engage in that activity even when there are changes in the company’s direction. If the stakeholders in an organization are not used to receiving some form of feedback, they might not be receptive to a change in direction, even if the change is very beneficial to them. In such cases, a stakeholders’ committee might be useful because it could guide the stakeholders to maintain their relationships with the company.