Stakeholder Management Plan
Managing, engaging, and leveraging your company’s stakeholders is an essential part of building your business. Your team, investors, and partners offer input, resources, experience, and networks that will help you grow. Start a cadence with your investors and team by signing up for a free Visible trial.
What is Stakeholder Management?
Does your startup have a comprehensive stakeholder management plan? Investors, team members, and core decision makers: these are the critical stakeholders within your business, and these are the people who will influence your company's success.
Stakeholder management is the process by which you communicate with and engage your company's stakeholders, prioritizing them by importance and ensuring that all stakeholders feel valued. Through stakeholder management, you can acquire better business outcomes, while also developing long-lasting relationships.
When you manage stakeholder engagement, you increase the likelihood of raising follow-on funding from your investors, as well as accessing their knowledge, network, experiences, and resources. Stakeholder relationship management leads naturally to stronger relationships between investors, team members, and key decision makers.
Stakeholder management includes:
Every stakeholder is different, and may have different interests when interacting with and engaging with your business. To properly manage stakeholders, you need to be able to address their concerns — showing them that you understand their personal metrics of success, and taking responsibility for any issues as they arise. Building trust is important.
Stakeholders are still human, and it's important to develop a variety of soft skills when managing them. In addition to providing them with the information that they need to make critical decisions, you also must be willing to work with them and help manage their emotions. A stakeholder analysis cannot forget the fact that stakeholders are independent actors, and they may not always be perfect actors: they may not make decisions purely based on statistics or logic.
Rather, stakeholders may be worried about the company's performance and metrics, or may be anxious about new moves that the company is about to make. Managing these fears is a key part of stakeholder management.
And, of course, each individual stakeholder will have a different level of influence on the company's actions. Sometimes, the most difficult to reach stakeholders may have the least amount of influence, and consequently the management process may be more about reducing disruption.
Stakeholder relationship management is a complex skill, which needs to be developed over time. It's a part of being a successful entrepreneur and running a successful startup, and will build relationships that can carry over from business to business as an entrepreneur moves on.
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Stakeholder Management Strategy: Investors, Team, and the Board
Let's break down a classic stakeholder management strategy. Creating a relationship between investors and team members takes some time — and communication. A classic stakeholder management approach is broken into stages of assessment, communication management, and persistent engagement.
These stages can be augmented through the use of stakeholder management tools. Once stakeholders have been prioritized and analyzed, they need to be communicated with and engaged.
There are a number of strategies for improving upon stakeholder engagement:
Stakeholders want to be involved in the business. They want to feel as though their time is valued, as though they are being notified of major events, and that they are being consulted when applicable.
Investors and team members can be kept on the same page through regular communications, such as meetings and newsletters. This allows the business to present the information that it needs to present in an organized fashion.
During these communications, investors should be treated as partners rather than a source of capital. They should be engaged as colleagues and peers, and their contributions should be acknowledged. Stakeholders have responsibilities to the company, just as the company has responsibilities to them.
Too often, companies only loop their stakeholders in when the company is experiencing a disruption. This stage is too late for true involvement and engagement. Instead, stakeholders should be involved from beginning to end, as their resources may be critical to developing and stabilizing the business.
When managing stakeholders, it's important not to get too wrapped up in the idea of "management." Managing your stakeholders is about managing your relationship to your stakeholders, not managing the stakeholders themselves. If you are too rigid in developing your relationships, you may find that your stakeholders begin to resent their role in the process.
Before you begin truly engaging your stakeholders, you need to go through the process of stakeholder analysis. A stakeholder analysis investigates the role that investors and team members will play within the business, including how involved they wish to be in the business, and whether they have a significant amount of influence on the organization's initiatives.
When performing a stakeholder analysis, use the following stakeholder analysis template:
When these questions are answered, you'll have a better idea of how to prioritize and classify your investors and team members.
Of course, every stakeholder is unique, and consequently the methods used to interact with them will need to be tailored to them. It is often a business owner's role to develop personal relationships with these stakeholders, learning more about what drives them, and learning more about what they desire.
Apart from the above stakeholder analysis example, stakeholder analysis tools can be used to identify the amount of each stakeholder's engagement, while also facilitating communication between the business and key interested parties.
To make it easier to manage your stakeholders, you can develop a stakeholder matrix. You can do this manually or using stakeholder management software; either way, you'll have a better depiction of how your investors and team members fit into your stakeholder management model.
There are multiple types of stakeholder matrix, one of the most popular being the power interest matrix.
In the power interest matrix, stakeholders will be classified as follows:
But this isn't the only stakeholder management matrix. There's also a stakeholder analysis matrix, stakeholder engagement assessment matrix, and other unique matrixes that may be developed for a specific company.
Project Manager Interview Questions and Skills
What if you have enough investors and team members that you can't handle the management process on your own? It's always possible to outsource your stakeholder management to a project manager.
Consider the following project manager interview questions, when looking for a project manager to take on these responsibilities:
A project manager isn't going to develop the type of in-depth, long-lasting relationship with your team members and investors as you will. However, they will be able to take on the day-to-day communications, financial reporting, and general engagement. This frees you up to focus on developing and building out your business.