It’s no secret that doing business is all about building relationships. But we sometimes forget just how important the quality of the relationship we have with a project’s stakeholders can be to its success. In this article, discover the benefits of stakeholder engagement.
What is stakeholder engagement?
Stakeholder engagement refers to proactive interaction and collaboration with individuals or groups affected by a project or business activity. It involves understanding, involving and responding to expectations and concerns to ensure the success of the project or operation.
The role of stakeholder engagement in project management and business operations is essential. It involves understanding needs, open communication, managing expectations, active collaboration, risk management and continuous adaptation. Fostering an inclusive approach, it improves trust and increases the chances of project or operational success.
Consider the following scenarios:
- The construction of a large-scale, cross-community infrastructure project.
- The implementation of a new organization-wide IT system to eliminate information silos and improve collaboration between departments.
- The launch of a logo redesign for a well-known global consumer brand.
Read the Stakeholder Management Guide to find out more about the benefits of stakeholder engagement for project success.
Now ask yourself this question:
How likely is it that one of these projects will succeed (i.e. achieve the desired results) without consulting the people who will be affected by the changes it involves? And what about the people who influence the green light for the project in question?
This is essentially the aim of stakeholder engagement: To maximize a project’s chances of success by becoming meaningfully involved with those who are affected by or interested in a company, activity or project. “Meaningful involvement” doesn’t just mean taking the time to listen to their needs and concerns. It means really taking these needs and concerns into account throughout the project planning and implementation phase.
Let’s take a look at some of the key benefits of involving stakeholders in projects.
What are the 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. A better understanding of project risks
very project or change involves risks. The higher the stakes in your project, the more important it is to know exactly what those risks are – ideally, from the very start. However, some risks only become apparent along the way.
A “complete risk picture” can be achieved by engaging with stakeholders from the outset, and on an ongoing basis throughout the project. Don’t bury your head in the sand and hope that complications won’t arise. Ask your stakeholders outright what their needs and concerns are at the start of the project. Keep asking them as the project progresses.
Helle Bank Jorgensen, an expert in sustainable business practices, argues that instead of ignoring critics or seeing them as a lost cause, leaders should actively engage with them to learn from their mistakes and find better solutions.
3. More effective management of stakeholder expectations
Make no mistake about it. All stakeholders have expectations of your company or project. These expectations may be based on truth, misinformation, rumors or even unfounded assumptions. In this sense, stakeholder expectations can also pose a risk to the project if they are not managed properly. By taking the time to get to know your stakeholders and check 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 company or project can make all stakeholders happy all the time, but by establishing a dialogue with them from the outset, in a consistent and meaningful way, you can build a relationship of trust with those who influence the outcome of your project. If project stakeholders see that you’re open to their needs and concerns, and make diligent efforts to address them, they’ll be more likely to be open to it. This goodwill can also come in handy if your accepted project encounters difficulties midway through, and you need to ask stakeholders to be a little more patient or flexible than originally planned.
According to Training Creatively, to make short-term decisions and achieve long-term goals, it’s crucial that organizations develop stakeholder maps for every operational and change activity. Stakeholder engagement benefits your business or company in five key ways.
- Efficient decision-making, better relations with stakeholders
- Prevention of project delays and obstacles
- Risk management and accountability
- Trust and goodwill
Best practices for improving stakeholder management
1. Improving 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. Enabling 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.
3. Optimising 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. Automating 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.
The importance of mobilizing stakeholders
In today’s business world, the key to success lies not only in offering exceptional products or services, but also in the ability to mobilize stakeholders in a meaningful way.
Stakeholder engagement creates a powerful synergy, building strong relationships with customers, employees and communities. It’s more than just a strategy; it’s the cornerstone of modern business success.
Effective stakeholder engagement isn’t just a flash in the pan. It’s a strategy that pays off over time, fostering customer loyalty, stimulating internal innovation, and enhancing corporate reputation. Find out how this sustainable approach can propel your company to lasting success.
Concrete successes in stakeholder engagement
The benefits of stakeholder engagement are considerable. Discover our wide range of stakeholder engagement case studies with Borealis. One of our clients, The Mining and Automotive Skills Alliance, is the employment and skills council for the Australian mining and automotive industries. It needs to partner with different types of stakeholders such as governments, educators and the workforce to reform the country’s vocational education and training system. Stakeholder mobilization is needed to ensure that employers and individuals have access to the right skills at the right time.
To achieve its goal, The Mining and Automotive Skills Alliance must ensure that its stakeholders remain involved, informed and committed. These stakeholders are numerous and spread across the country, sometimes far and wide. It is difficult to identify and engage with all stakeholders. It’s even harder to keep track of the evolution of stakeholders and their changing positions.
The Mining and Automotive Skills Alliance team searched long and hard for the right solution to manage stakeholder engagement. The team considered CRMs such as Salesforce, but realized that a system designed to manage customer relationships would not be flexible enough to meet its needs. In the end, Borealis software proved to be the best solution! What sealed the deal was that the software was specifically focused on stakeholder engagement, unlike other CRMs that are sales-oriented.
Now, rapid access to quality information thanks to Boréalis has transformed the team’s dynamic, enabling them to devote more time to proactive engagement with stakeholders. Their approach has become less reactive, and Boréalis has become an essential part of their daily routine. The increased structure and organization of the team’s efforts is what makes work more efficient. Clearly defined field names in Boréalis ensure uniform understanding across the team, eliminating misunderstandings. There’s no need to scour spreadsheets for information, which greatly reduces frustration for all team members.
Find out more about concrete success stories and testimonials from the company in question, which has succeeded in effectively mobilizing stakeholders thanks to a tailored software.
Successfully navigate the challenges of stakeholder engagement
Effectively engaging stakeholders is essential to the success of a project or company. However, it’s not without its challenges. Here’s a list of common obstacles to stakeholder engagement and practical solutions for overcoming them.
Shared challenges:
- Understanding needs: Identifying divergent stakeholder expectations.
- Communication: Establish transparent and effective communication.
- Expectation management: Manage expectations and prevent misunderstandings.
- Collaboration: Encourage active and constructive participation.
Solutions and best practices:
- Preliminary analysis: Carry out a thorough stakeholder analysis at the outset of the project.
- Communication plan: Develop a clear communication plan tailored to each group.
- Proactive management: Anticipate potential problems and respond proactively.
- Ongoing participation: Maintain an open dialogue and involve stakeholders at every stage.
By proactively addressing these challenges and implementing these solutions, we can strengthen stakeholder engagement, thereby promoting the overall success of our initiatives.
Put the right tools in place and success will follow
All organizations have relationships with stakeholders. Managing these relationships proactively, rather than defensively, will always yield better results (think of it as a shorter, easier path to social acceptance for your project).
Whether your team are new to stakeholder management or seasoned professionals, using the right tools enhances the benefits of stakeholder engagement.
When all the information you need is just a click away, how can you go back to searching for old e-mails or spreadsheets?
Wondering how stakeholder relationship management software could fit into your current working methods? Talk to an expert.
