Listening to stakeholders is your important first step
Determining the attitudes of stakeholders and their likely reactions to organizational policies and projects is a vital part of establishing constructive stakeholder relationships. This information will enable you to calculate the importance of each stakeholder. Even better is involving the main stakeholders in the planning and development of organizational activities. A stakeholder is any person, group or organization who can place a claim on an organization’s attention, resources or output, or is affected by that output. They have a stake in the organization, something at risk, and therefore something to gain or lose as a result of corporate activity.
When you are determining the importance of each stakeholder, you need to find out what their attitudes and potential actions might be in response to your organization’s initiatives. However, a study published in 2019 of how well organizations in the US, UK and Australia listened to their stakeholders found that 80%, on average, of the communication-related resources of organizations was devoted to disseminating their messages, rather than genuinely listening to their stakeholders. In the study, Australian Professor Jim Macnamara said:
…organizations have the resources to engage with their stakeholders. It is also fair to say that organizations expect that their stakeholders listen to them via their media advertising, publicity, websites, speeches, brochures, reports, social media posts, and other channels of communication.
Macnamara observes that in organizational communication, those who listen may not be the ones who speak in response, and those who speak may not be the ones primarily responsible for listening [because of the issues of the size of the project or organization and who is representing the organization in stakeholder interactions.]
Stakeholder engagement best practice
Stakeholder engagement best practice is to adopt an ‘upstream’ focus – building and maintaining working relationships in advance of announcements and activities for which cooperation or support is sought and giving stakeholders a chance to influence decisions, not simply communicating unilateral decisions to them. It also should include proactive contact to listen to stakeholders’ views and concerns. Organizations can be risk-averse in relation to contacting major stakeholder groups in advance of specific initiatives for fear of “stirring up an issue”. However, relationships and partnerships only work if they are two-way and built on mutual trust and engagement. Organizations need to enter into activities with transparent communication and genuine trust of key stakeholders to produce a positive result for all parties.
Some of the more common stakeholder consultation techniques include personal interviews, workshops, focus groups, forums, public or ‘town hall’ meetings, surveys, stakeholder panels, and participatory tools to engage stakeholders in the development of a project or policy. Macnamara’s views on stakeholder consultation:
Listening systems in organizations need to progress beyond polling…and structured surveys, which are the most widely used research method overall. Polling provides little more than a faint whisper of voice by limiting participants to a few “tick a box” questions and ratings. Surveys are also limited in enabling voice, with most predominantly made up of closed-end questions. Also, organizational listening needs to be much more than tokenistic feedback forms on websites and net promoter score (NPS) ratings—a widely overused method that asks people to rate the likelihood that they would recommend an organization, product, or service to friends or colleagues on a 0–10 scale.
How to calculate the importance of each stakeholder
You can numerically calculate the importance of your stakeholders. In another of my articles, “Stakeholder relations management creates best outcomes,” I mention that you can determine your most important stakeholders by developing a matrix to calculate a numerical value or rating for each stakeholder. The overall rating of each stakeholder is simply the aggregate of numbers calculated by rating the stakeholder against several criteria or attributes, as in the example matrix below.
Obviously, the stakeholders with the highest scores are the most important to your organization. Even the type of items in a list of “desirable stakeholder attributes,” as in the left hand column below, are useful to help clarify which attributes you consider the most important. In developing this type of matrix, you will impress top management with the systematic way you have been able to prioritize various stakeholders. This becomes especially useful if someone questions why a particular stakeholder has been included or excluded in the priority list.
We can make the prioritizing of stakeholders more sophisticated when we allocate a numerical weighting to the criteria themselves. For instance, if ‘Access to key decision makers’ is considered the most important attribute in stakeholders, that category could be allocated a numerical weighting, say 10.
If ‘Access to the media’ is considered important, but not quite as important as ‘Access to key decision makers,’ it could be allocated a numerical weighting to reflect that, say 8.
The third attribute, ‘Access to key information,’ might be considered to be the same importance as factor two, and therefore would be given a numerical weighting of 8.
The fourth attribute, ‘Able to influence other stakeholders,’ might be given a weighting of 6, and the fifth attribute a weighting of 5.
Then for each stakeholder, you simply multiply the attribute importance by the stakeholder rating on that attribute to reach a number. For instance, ‘Access to decision makers’ is given 10 for its importance, and the stakeholder in this example is given a rating of 4. Multiplying 10 by 4 gives a total of 40 for that stakeholder on that attribute. A different stakeholder might only have a rating of 2 or 3 on that attribute and therefore the resultant figure would be considerably less than the first stakeholder, ie 20 or 30 points in total.
You can work through all the important attributes and can add up all the totals to reach an aggregate for each key individual stakeholder or group. Then you can simply prioritize each stakeholder according to their total score.
Finally, you can use this approach to add or delete criteria. For instance, if a stakeholder is actually a decision maker whose decision (or they represent a group) who are a major factor in the approval process, you can insert a line at the top of the spread saying something like, ‘Decision maker’ or ‘Decision maker in their own right.’ Clearly they would be the most important stakeholder of all. Remember that the criteria need to be the same for evaluating all the stakeholders.
Action plans after you calculate the importance of each stakeholder
The amount of time you should allocate to stakeholder relations management depends on the importance, size, difficulty and timing of your projects.
After you calculate the importance of each stakeholder, you can embark on stakeholder relations management for a particular issue. This involves drawing up a table action in your action plan which shows each stakeholder and several factors that can be considered.
For instance, for each stakeholder in the table you can outline:
- their importance and relevance to you
- their current attitude towards the issue, matter, or your organization
- the desired attitude you are seeking from them
- the extent to which you believe you can influence their opinions and actions
- what you can offer them in return
- any active role and actions they can take
- the messages you intend to communicate to them
- intended timing of messages.
It is important to consider carefully what you can offer them in return, because each stakeholder needs to gain something from the relationship or they may be reluctant to act as you wish them to do.
Then you can initiate a tailored program of two-way communication with every significant stakeholder. The result is likely to be a much more efficient and beneficial relationship for your organization and your stakeholders than if you don’t do it.
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