Stakeholder analysis should be undertaken as part of your environmental scanning activity. In addition, such analysis can play an important role in strategy execution, as you seek to align stakeholders with your strategy. Although you may take a “stakeholder management” approach when conducting environmental scanning, a different mindset is suggested for strategy execution. When possible, in strategy execution, the goal is to take a collaborative approach with stakeholders. Ultimately, a mutually defined, reciprocal relationship should be sought.
The first step is to identify your stakeholders. For purposes of a stakeholder audit, stakeholders are defined as anyone or any organization that could be affected or that could influence your organization or its outcomes. Take an expansive or divergent approach when identifying stakeholders. Early in the process, it is important to identify all of your stakeholders. It is often helpful to take a systems approach.
Once you have identified all of your stakeholders, it is time to conduct an analysis of the stakeholders. Make a determination to use either (or both) qualitative or quantitative analyses. Likewise, you will want to engage in both primary research and secondary research. The types of stakeholders and your current relationships with them, along with your ultimate research goal, will dictate the research methodology you employ. The objectives of the research are to: gain an understanding of their influence, determine their needs, determine their concerns and issues, assess their level of commitment or resistance, and understand their perceptions of your organization.
When evaluating the influence of stakeholders, take into consideration their constituencies, credibility and capacity. You will also want to consider whom they are connected to.
A complete analysis also takes an inward view. You will want to give consideration to what you want from each stakeholder. Finally, you will want to make a determination of the importance each stakeholder represents to your organization.
Relative importance and influence are two key elements generally considered when engaging in stakeholder prioritization. The following matrix can be used to map stakeholders and determine their priority level.
Protect: This quadrant contains stakeholders that are considered to be very important to your organization, but they do not have a lot of influence. As such, it will be important to pay particular attention to the group to make sure that their interests are protected and considered as strategy is developed. In fact, you may want to make sure they are well represented at any strategy development think tank.
Good Relations: You will want to make sure that you develop a close and constructive working relationship with this group. If engaged properly, these stakeholders can have a significant multiplier effect on your strategy execution and programs. They are considered to be high priority stakeholders.
Monitor: These stakeholders wield significant influence, but they are not very important to the organization. As such, they can be a source of risk to the organization. In the strategy development process, it is important that you recognize the potential risk and consider risk scenarios.
Low Priority: These stakeholders are of relatively low importance to the organization and do not carry much influence.
The priority level classification of each stakeholder is taken into consideration as strategy is developed. Priority levels are also fed into an issues management program.
In summary, the primary goal is to take a collaborative approach with stakeholders, especially those in the “protect” and “good relations” categories. This demands a mindset wherein you consider the stakeholders as sources of opportunity and competitive advantage. On the other hand, some stakeholders, such as those in the “monitor” category, could present risks and, therefore, require a stakeholder management approach to ensure that you mitigate the potential negative impact.
In today’s rapidly changing environment, it is important that you engage in a comprehensive stakeholder audit every 12 to 18 months. Most importantly, it is critical that you begin with an all-inclusive list of stakeholders; taking a systems approach to stakeholder identification can help ensure you are considering all potential stakeholders.
How do you engage stakeholders in the strategy development process?