Everything you need to know about stakeholder management

'Stakeholder management' is a term we hear a lot in the workplace and the corporate world. But is its meaning clear? Why is it so important? What skills does it involve? Does it take priority in your business agenda?

In an increasingly interconnected, virtual world, the importance of a clear strategy underpinning stakeholder management is vital. Who receives information, when they receive it, and how they receive it, has never been so integral to business; companies need to ensure the flow of information in a timely and precise manner to avoid miscommunication in the public sphere.

This article defines stakeholder management, explains why it is essential, and highlights the required skills needed to boost your CV in this area.

What does stakeholder management mean?

A stakeholder is an individual with a vested interest in a company or project; its success or continuation is important to them. Stakeholder management is the interaction with stakeholders and overseeing that relationship for the benefit of your business.

There are many ways to define a stakeholder:

• Internal stakeholders are actively involved in the activities of a business or own shares in the company", such as employees or business owners
• External stakeholders: these stakeholders are "outside parties that are connected to a company due to their shared interest", such as customers or business competitor 
• Directly affected stakeholders: those who are part of the company's day-to-day functioning, such as employees
• Indirectly affected stakeholders: those not directly involved in the company but who are interested in the outcome, such as customers

"From a business perspective, stakeholder management is critical to the success and longevity of an account".

          Amy Sheppard, Senior Account Manager, The Childcare Company and Impact Futures.

"Stakeholder management is building professional relationships with key contacts, in order to improve their service and, in education, work with them to develop a strong skilled workforce."

          Megan Collins, Junior Account Executive, The Childcare Company and Impact Futures.

What is the importance of stakeholder management?

It's difficult to overestimate the importance of stakeholders to a business; there are several significant ways that expert stakeholder management will benefit you and your organisation:

Influence and value

A stakeholder's negative perception of a business has the potential to cause reputational harm, while a positive and engaged stakeholder will act as a conduit for business success.

"The more you invest in them, the more they will invest in you."

          Amy Sheppard, Senior Account Manager, The Childcare Company and Impact Futures

By paying attention to the requirements and desires of clients and "genuinely delivering on those", Megan believes stakeholders will convey their good experience to others. This creates free advertising, with stakeholders acting as brand spokespeople.

It's a career-developing skill

At every stage of a career, stakeholder management is vital to master. Identifying key stakeholders and engaging with them correctly is a required skill at all levels in numerous professions, leading to careers such as Account Manager and Investor Relations Officer.

A candidate who can demonstrate they have stakeholder management skills will stand out in interviews as someone a business can trust to interact on its behalf. If you do not have stakeholder management skills, promotions will not be easy; you have not demonstrated you can be relied upon to undertake interactions which have the potential to make or break a business’s reputation.

Successful stakeholder management demonstrates good communication and organisational skills, alongside a strong grasp of the business's goals. In interviews, candidates will often be asked how they would navigate stakeholder management, as it is crucial to the success of a business and team member performance.

"Working well with stakeholders can increase your profitability, engagement, exposure and reputation all at once."

          Megan Collins, Junior Account Executive, The Childcare Company and Impact Futures

What skills does good stakeholder management require?

• Organisation: Set realistic goals for engagement at the beginning of a project. Agree upon the most appropriate ways of contacting the stakeholders to streamline and target your engagement
• Observation: Observe who your stakeholders are on a rolling basis to ensure all are correctly identified and included
• Communication: Must be undertaken regularly, informing stakeholders of key strategic decisions diplomatically and honestly

What are the key takeaways for good stakeholder management?

• Step one: Observe who your stakeholders are
• Step two: Organise how you will engage, when you will engage, and what will you engage about
• Step three: Hone your stakeholder management skills
• Step four: Watch your workplace performance, professional skills, and business relationships grow.