5 Tips To Creating An Effective Stakeholder Management Strategy

July 11, 2022

5 Tips To Creating An Effective Stakeholder Management Strategy

Stakeholders are a crucial component of your business operations, and good communication is key to keeping your stakeholders happy. Your stakeholders include your suppliers, industry leaders, employees, creditors, government officials, and anyone that can have an impact on your business or vice versa. Hence, your communication with your stakeholders should be conducted in a manner that takes into account their importance and status in your business. Given below are five tips that you should take into account while creating an effective stakeholder management strategy:

1. Create a stakeholder database

The first step to efficiently managing your stakeholder data is to create a stakeholder database that summarises important information for all your stakeholders. Once you summarise all data, the next step is to categorise them according to priority in terms of the most influential stakeholders being at the top of the ladder and so on. 

You may also create a Power vs. Interest grid in which you compare stakeholders according to how much power they hold over other stakeholders and how much interest they have in your organisation.

2. Use a stakeholder engagement software

By using stakeholder engagement software you will be able to maintain a registry for all your stakeholders centrally and will be able to assign organisations and projects to them, respectively. Stakeholder engagement software allows managers to map out their stakeholders and use real-time reporting to gain an understanding of their stakeholders’ current roles and responsibilities. 

It further helps management by linking assets and objectives to relevant stakeholders, delegating work, sending reminders, and creating engagement opportunities that involve all stakeholders centrally.

3. Devise a communication approach for each category

Once you have categorized your stakeholders based on their importance, power, or influence, the next ideal step would be to devise a communication approach for each category. Different stakeholders need to be treated distinctly while close and influential ones would have to be updated with all business processes, others may simply need to be informed about major operational changes. 

You can create a communication approach for each category that decides whether a category is supposed to be kept close at all times, simply informed periodically, be consulted for important decisions, or simply notified once or twice a year.

4. Create grievance management systems

A well-functioning stakeholder management strategy always makes room for grievance management systems to address any concerns or complaints that your stakeholders may have. A grievance management system ensures that all stakeholders go through a fair and just trial and that all their relevant concerns are met and addressed. Not only would a grievance management system build trust within your stakeholders, but it would also ensure transparency and aid communication. 

A grievance management system would essentially include a procedure for stakeholders to report their concerns, an impartial committee that addresses those concerns, and a module for what happens in different situations. The maximum grievance redressal time would also have to be strictly defined.

5. Learn how to deal with difficult stakeholders

An important part of your stakeholder management strategy would be to learn how to deal with difficult stakeholders. Depending on their sphere of influence and power over your firm, difficult stakeholders can prove to be a hindrance in important company projects and decisions. To have such stakeholders on your side can be a blessing since other stakeholders might see their agreement as a cue to give their approval in crucial matters.

To deal with difficult stakeholders, you should first identify them and then try to learn what makes them act a certain way when it does. You can then apply your learning to your strategy to deal with them.

Conclusion

Stakeholders are a crucial part of any business’ operations, and they should rightfully be treated similarly. Stakeholder management is an important aspect of running any given business, and hence relevant strategies should be devised with utter care and consideration.

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