4 Biggest Advantages of Stakeholder Management

The 4 Biggest Advantages of Stakeholder Management

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As we know, business is all about relationships. But sometimes we forget the extent to which our approach to building and maintaining relationships with stakeholders can make or break a project.

Consider these scenarios:

  • Building a large-scale multi-year infrastructure project running through several communities
  • Implementing a new organisation-wide computer system to break down information silos and improve collaboration between departments
  • Embarking on a logo redesign at a well-known global consumer brand

Now ask yourself:

What’s the likelihood of any of these projects succeeding (i.e. achieving the desired outcomes) without consulting the individuals who will be affected by the changes these projects entail? What about the individuals who influence whether the project gets the green light in the first place?

This is essentially the goal of stakeholder management: To maximise the chances of project success by meaningfully engaging with those who are affected by or take interest in a business, activity or project. “Meaningfully engaging” means more than simply taking the time to listen to their needs and concerns. It means actually taking these needs and concerns into consideration throughout the project planning and implementation phase.

Let’s look at some of the main benefits of involving stakeholders in projects.

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Top 4 benefits of stakeholder engagement

1. Better understanding of project stakeholders

Any effective stakeholder management approach requires you to first identify, assess and map stakeholders according to interest and influence. This tells you who your key stakeholders are and how they are similar or different in terms of needs and opinions. These insights are used to feed your stakeholder management strategy. In other words,

  • who you need to engage with
  • via which method,
  • at which stage of the project,
  • at what frequency,
  • and with what message.

Stakeholder analysis is an ongoing process because the stakeholder landscape is forever shifting. Over the lifespan of your project, stakeholders will come and go. Their roles and connection to your project may also change, as well as their level of interest or influence. Running stakeholder analysis on a regular basis will help you keep your stakeholder list up to date and monitor changing stakeholder relationships and positions over time.

To further complicate matters, the relationships your stakeholders have with one another can also change. This, too, can potentially impact your project. A stakeholder network chart is extremely useful for understanding these evolving dynamics. This knowledge is key, because nothing is more unproductive than engaging the wrong stakeholders with the wrong message.

2. Better understanding of project risks

Every project or change brings risks. The higher the stakes of your project, the more important it is to know exactly what these risks are – ideally, going into the project. Some risks only arise mid-stream, however.

Getting the “full risk picture” can be achieved by engaging with stakeholders early on and continuously throughout the project. Don’t stick your head in the sand and hope complications won’t arise. Ask your stakeholders outright what their needs and concerns are going into the project. Keep on asking them as the project advances.

Helle Bank Jorgensen, an expert on sustainable business practices, says that rather than ignoring critics or considering them a lost cause, leaders should actively engage with them to learn from mistakes and find better solutions.

3. More effective management of stakeholder expectations

Make no mistake. All stakeholders have expectations of your company or project. These expectations may be based on truth, misinformation, rumours, or even unfounded assumptions. In this sense, stakeholder expectations can also constitute a project risk when not managed properly. By taking the time to know your stakeholders and verify their understanding of your project, you can develop an effective engagement strategy to manage their expectations.

4. Happier stakeholders and perhaps, even a competitive edge

No business or project can make all stakeholders happy all of the time, but by engaging with them early, consistently and meaningfully, you can build trust with those who influence the outcome of your project. If stakeholders see that you are open to hearing their needs and concerns, and that you’re making diligent efforts to address them, then they will be more likely to be open to hearing about your proposed project. This goodwill can also come in handy should your accepted project run into hiccups mid-stream and you need to ask stakeholders to be a little more patient or flexible than initially planned.

Best practices for improving stakeholder management

1. Improve cross-functional collaboration to align internal efforts

Now that so many processes are digital, it’s understandable that stakeholders would be frustrated if two different teams within the same organisation contacted them separately on the same topic. Even more so if the messages conveyed weren’t aligned. This type of misstep can undermine stakeholder trust and potentially jeopardise social acceptance for a project.

How to improve:

  • Make sure everyone has access to the same information (also referred to as a single source of truth).
  • Give team members an easy way to share major events and conversations so that important changes and risks can be assessed in real time. This could take the form of a monthly meeting or a daily report that’s automatically sent to team leaders.

See how the professionalisation of stakeholder engagement practices can dramatically improve stakeholder relationships, productivity, and outcomes.

2. Enable data security and continuity

Many companies and projects must now adhere to data protection laws, and local regulations might even be a major hindrance or risk to how you manage information. In long-term projects where the chance of staff turnover is higher, the risk of potential data loss or theft can be even greater.

How to improve:

  • Implement a single system for collecting data and make sure everyone enters data the same way.
  • Ensure users have the appropriate access rights to data in the system, on a “need-to-access” basis.

See how you can adhere to GDPR and other privacy laws that may apply to your project. >

3. Optimise stakeholder mapping Stakeholder analysis and mapping is often one of the first steps in building an effective engagement plan. But what comes next? How do you monitor changes in your stakeholder landscape? How to improve:
  • Use GIS technology to map the position of stakeholders to not only understand their position in terms of power and influence, but also their physical location in relation to your project.
  • Cross reference elected officials and congressional boundaries with specific project assets.
  • Archive stakeholder assessments to compare changes over time. Spot trends in stakeholder positions, rather than just having a snapshot view.

4.  Automate engagement activities

With all the powerful stakeholder management software now available, teams no longer have to sweat over creating stakeholder engagement schedules or activities falling between the cracks. Stakeholder software will automate most tasks and integrate with the other tools you use, such as a digital engagement platform.

How to improve:

  • Use a stakeholder management software that offers a wide range of functionalities. At a minimum, the software should make routine tasks such as collecting data, creating tasks for team members and reporting due diligence a piece of cake. Link your digital engagement platform (like your Contact Us form, or your feedback and grievance portal) to your stakeholder software so that all communications can be centralised and treated in the same efficient and standardised way.
  • Use the software to create notifications and reminders to complete tasks or provide feedback on activities so that nothing falls through the cracks.

How a stakeholder engagement system can help you get there

The degree and ease with which you are able to reap the above-mentioned benefits will depend on your stakeholder management approach and the tools you use.
A stakeholder engagement system (also known as a stakeholder management tool or a stakeholder relationship management software) can boost business performance and create a competitive advantage for organisations that:

  • Have many stakeholders or a large staff managing engagement activities
  • Need to create a structured corporate memory to bring insights to operations
  • Can benefit from visualisation tools that let them see the geographic location of stakeholders on a map in relation to project assets or infrastructure
  • Are required to report on corporate and social responsibility, such as community engagement, social impact, sustainability, environmental and social governance, etc.
  • Must comply with regulations & requirements relating to stakeholder relations

Curious about how stakeholder management software works?

Main benefits of implementing stakeholder relationship management software

All areas of a business should be committed to continuous improvement. Stakeholder management is no exception. Improving the methods and processes you use to manage stakeholders can lead to a number of benefits.

  1. It shows stakeholders that you’re making good on your pledge to take their opinions into consideration, by allowing you to call up the details of past conversations.
  2. It makes it easier to follow through on commitments as promised, with less risk of oversights or duplicated efforts, by letting you delegate and track all activities.
  3. It vastly simplifies reporting and compliance audits, by enabling you to access any manner of datasets and apply a wide range of filters as needed.
  4. It shortens your project’s path to social acceptance and ultimately, success, by minimising information “blind spots.”

Put the right tools in place and success will follow

All organisations have relationships with stakeholders. Managing these relationships on the offensive, rather than on the defensive, will always lead to better outcomes (think: shorter, smoother path to social acceptance for your project).

Whether your team is new to stakeholder management or seasoned pros, working with the right stakeholder management tools can be a game-changer. When all the information you need is just a click away, how could you possibly go back to scouring through old emails or hunting down spreadsheet?
Wondering how stakeholder relationship management software would fit into your current work methods? Talk to an expert.

Get started with
Borealis stakeholder engagement software today!