We can classify an organization’s stakeholders into Primary and Secondary. The primary stakeholders are those without whose continuing participation a firm cannot exist. They include shareholders & investors, employees, contractors, customers & suppliers. On the other hand, secondary stakeholders are those who influence or affect or are influenced by, the corporation, but they are not engaged in transactions with the corporation or essential for its survival. They include media, action groups, government agencies, trade unions, regulatory authorities.
Stakeholder management is the process of managing the expectation of anyone that has an interest in a project or will be effected by its deliverables or outputs. Any company which aims to achieve long term success has to chalk out a strategy for managing its stakeholders. There are two major elements to Stakeholder Management: Stakeholder Analysis and Stakeholder Planning. Stakeholder Analysis is the technique used to identify the key people who have to be won over by the company. Then Stakeholder Planning is used to build the support that helps the company succeed. Following or during a Stakeholder Analysis process, it is often useful to categorize the various stakeholders by drawing further pictures of what the stakeholder groups are, which interests they represent, the amount of power they possess, whether they represent inhibiting or supporting factors for the organization to realize its objectives, or methods in which they should be dealt with. Stakeholder Mapping is the process of creating such pictures to clarify the position of the stakeholders of the organization.
A type of Stakeholder Mapping is the Power / Interest Matrix. This stakeholder map classifies stakeholders in relation to the power that they hold and the extent to which they are likely to show interest in the strategies of the organization. The Power / Interest Map can be used to indicate what type of relationship the organization should have with each of the groups.
From the drawing above you can see there are four types of stakeholders, those of:
- High power/high interest — these are your most important stakeholders that you should keep informed and close to your project. For us this would be our Directors and Managers.
- High power/low interest — these stakeholders are to be kept satisfied, their power is high so they can influence your project but their interest is low so this is unlikely.
- Low power/high interest — keep these people informed as this can support your project. For us this would be our employees and customers.
- Low power/low interest — to be monitored with little effort as these stakeholders cant influence your project and are unlikely to be involved.
This analytical tool will help you better understand where to focus your energy and time. It is important to spend a lot of strategic effort thinking about where your real power is held and knowing how to keep our key stakeholders engaged. In relation to keeping them engaged we need to ensure we are communicating with them using the right channels and tools of communication. The disadvantage of this tool is that unless you really know your stakeholders well you can place them incorrectly on your grid. A common mistake is by putting a stakeholder where you want them to be not where they really should be. That’s why it is important to know who they are, meet them, interview them and understand their values and beliefs, this knowledge will help place them in the correct position on the grid and will really give us a clear picture of who to focus on.