One of the things that we’ve learned throughout our years in the procurement industry is the importance of properly managing your relationship with your stakeholders. And yet, we’ve seen how companies struggle to devise an effective management strategy, and the impact that this has on their bottom line.
If you are looking for some tips that help you manage your stakeholders, this article will be exactly what you need.
What’s the importance of proper stakeholder management?
Stakeholders can have a significant impact on the well-being of your project or organization. They aim to influence the decisions that are made so that they fit their own individual interests. This influence is a type of power and it can help make, or break, your goals.
How to have effective stakeholder management
There are 4 five key elements to a great stakeholder management strategy. It’s important that you know who they are, what are their needs, which ones have the most power, and how to communicate with them effectively to maintain a good relationship. Let’s break down each point:
Know your stakeholders
Overall, you’ll have three types of stakeholders: Internal, connected, and external.
Internal stakeholders are those within your organization, such as the company’s owner and the staff. Connected stakeholders are those that aren’t part of your company but have a contractual or legal connection. For example, your customers, lenders, or suppliers. Finally, you have external stakeholders, those who have no connection to you but still can influence your operations. Examples of this last group are government institutions, regulators, and the community.
Knowing what stakeholder you are working with will be crucial to developing your relationship and management strategy.
Prioritize your key players
Not all stakeholders need the same level of focus and knowing who to prioritize will be crucial to your success. That means you should map which ones require the most attention, and which ones you can afford to pay less mind to.
A great way to do this is by using Mendelow’s matrix for stakeholder mapping. This model suggests analyzing your stakeholders based on the power that they have to influence decisions, and their interest in what the organization does.
Stakeholders with low power but high interest should be kept updated on any relevant information of your interactions, even if they can’t make decisions on their own.
Your true focus should lie on those with high interest and power, as they are the ones calling the shots. Carefully consider which position each stakeholder holds in the model.
You want to be transparent with your expectations and what your goals are. Stakeholders appreciate being informed about the goings of the company. You also want them to feel like you understand their wants and needs, so showing them that you also see things from their perspective will help with negotiations.
Align their interests with your goals
At the end of the day, you are looking to align the position of your stakeholders with your goals. The interests of a stakeholder are not always flexible, but their positions are. There is more than one way to reach a goal and finding common ground between their needs and your wants is a good way to foster good long-term collaboration.
This requires that you stay on top of your partnership. As you work together, keep an eye for improvements that can be made to better the process. Review your engagement strategies to show that you are mindful of changes that need to be made as time goes.
Working with your stakeholders requires a deep understanding of who they are and what they want. You also need to consider the balance between their interests and your goals. At procurement Express, we provide you with the tools you need to help you evaluate your stakeholder management strategy.
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