A stakeholder is anyone who has an interest in how your business performs. That means investors or shareholders, but it also includes employees, families of employees, vendors, contractors, customers, the community and a landlord. Each type of stakeholder has a different influence on your decisions, and an analysis ranks stakeholders by their status, influence and power. This helps you understand their concerns and address those concerns fairly.
It’s important to understand that not all stakeholders can hold you accountable. For example, while a vendor may be a stakeholder, you certainly have a right to change vendors if you find more favorable terms. Other stakeholders, such as the community, can hold you accountable for actions. If you damage the appearance of the neighborhood or introduce discriminatory practices, community leaders may take you to task. Managers who have staked their own reputations on working for you can question decisions that could make them look bad. An example of this would be a chief financial officer who objects to your insistence on accumulating excessive debt when he is trying to make fiscally responsible business decisions.
A stakeholder analysis can help you anticipate conflicts. Some stakeholders may desire a course of action that others oppose. For example, investors may want you to cut back on the number of employees on your payroll, whereas your employees naturally would want to remain employed. An analysis can reveal the relative harm of keeping or laying off employees in this situation. You could list the benefits and disadvantages of either course of action and determine which one best serves your company.
Public Relations Needs
A stakeholder analysis can become a template for your PR needs. As your company grows, you need to notify different stakeholder groups. Your plans to expand might be of interest to the community, your lender, investors and employees, but you don’t have to notify stakeholders such as supply companies and service providers about expansion plans. Your stakeholder analysis helps you determine who needs to receive news promptly and who can wait.
Stakeholders are not simply spectators. In fact, you may have several items you need to deliver to various stakeholders, such as reports, news releases, accounting summaries, product samples, expansion plans and sales projections. If you are diligent about delivering necessary items to stakeholders, you send the signal that you consider them important to your business. This also opens the door to constructive feedback from stakeholders. Your stakeholder analysis can help you identify the deliverables you need to schedule for each type of stakeholder.
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