How To Create An Effective Stakeholder Engagement Plan

Stakeholders have varying levels of sway over your organisation. Whether they are an employee working 9 to 5 creating goods, or the person buying the goods for delivery miles away, both must be considered for smooth operation. Sometimes, however, powerful stakeholders enter the fray that may threaten the organisation at different levels. When this happens, it is paramount to react with proactivity via a stakeholder engagement plan.

But how do we create a stakeholder engagement plan, and what is it? RealBusiness has created this article to illustrate how best to analyse and construct a goal to build relationships with your stakeholders and create sustainable plans.

What is a stakeholder?

As the name implies, a stakeholder is simply an individual or group who has a stake in either the organisation or project in question. This means that it can be within the business and without.

It is for that reason that whenever you identify a stake within an individual or group, you have also found a stakeholder:

• Shareholder/Investor – People who have put money into the organisation or project in question, or even own part of it, typically want the organisation not only to exist – but to perform well
• Employees of your organisation – The people working for your organisation want, primarily, to receive their wages and continue in that manner. Additional wants can include safe working conditions, job security etc.
• Customers – Yes, even customers who buy goods or services from you are interested in its quality and value. Selling rotten bread, for example, may result in a return or loss of customer trust.
• Communities – Let’s say you want to build something in a town that the townspeople don’t want built for certain stated reasons. This would make them a stakeholder of a different kind, as they hold stakes against you.

Organisational Stakeholder vs Project Stakeholder

A stakeholder can have a stake in an organisation, or simply the project that the organisation is working on:

• Organisational Stakeholders – These can be anybody from staff members seeking fair compensation to shareholders/investors looking to make a return on the money they’re put in. These people require a sense of security, as well as results.
• Project Stakeholders – Project stakeholders are people primarily concerned with specific outcomes of a project. For example, the construction of new real estate. Stakeholders of this type typically will alter in concerns/priorities as the project phase continues to develop.

The difference between the two does not change the approach by a massive degree but rather sets a context and time frame.

What is the purpose of a stakeholder engagement plan?

The Project Management Institute (PMI) are a globally recognised organisation for project management, and they created a study from their 2013 report titled “The High Cost of Low Performance – The Essential Role of Communications”. They found that 35% of all projects fail due to poor communication strategy and lack of stakeholder engagement.

• Establish trust and transparency – A simple yet undeniable part of an effective communication strategy is to ensure that the person you speak to trusts you and can see where you stand. Stakeholder relationships are bound to the success of the project/organisation as a rule, meaning the best practice is to remove shame or consequences for making enquiries or having questions. Proactively address and raise questions and concerns, demonstrate a commitment to honesty and accountability, and you will find that people become comfortable around you fairly fast.
• Facilitate informed decision–making – Provide your stakeholders with the necessary information to understand organisational or project requirements, engage in discussion, and take their points of view into account.
• Proactively address concerns – Make an effort to identify and address potential concerns, demonstrating your ability to account for and adjust to potential issues. This will make stakeholders more likely to approach you with concerns.
• Foster positive relationships – Cultivating consistent engagement with stakeholders means they are more likely to stick it out with you and work with you even during times when things look worse.

Keeping these goals as the foundation of your engagement strategy gives your entire plan direction.

Stakeholder Mapping – Identification and Categorisation

The first step of a stakeholder engagement plan is to identify the actual stakeholders through a process known as “Stakeholder Mapping”.

This process allows you to:

• Identify Stakeholders – If you make an engagement strategy whilst missing a couple of stakeholders, you could end up missing or alienating a potential ally. Stakeholders all have some level of influence over the company, meaning you must ensure you catalogue all of them into stakeholder groups.
• Power Level – Each stakeholder has a level of power based on their interest level, their influence and their potential impact. Those that have high power levels take priority in appeasing. An example of a high-level stakeholder would be a limited company shareholder.
• Risk Management – All potential roadblocks and negative impacts of failing to appease high-risk stakeholders can immediately be identified and accounted for, minimising the potential damage of something you’d otherwise be unprepared for.

A map is outright mandatory for any comprehensive stakeholder engagement plan template, as it creates your overview of priorities, allowing you to execute an informed decision-making process.

How do you create a stakeholder map?

A stakeholder map can be created through several steps:

1. Brainstorm – Get your team together, and brainstorm a comprehensive list of all stakeholders within your organisation. Your stakeholders will be split up into two types:
   • Internal Stakeholders – As the name implies, your internal stakeholders are within your organisation. These people can be employees, managers, and even board members.
   • External Stakeholders – External stakeholders exist outside of your company and can be customers, suppliers, community groups etc.
2. Stakeholder Analysis – You must categorize stakeholders based on three things:
   • Interest level – How much interest does your stakeholder have in the organisation/project’s success?
     • High interest – Actively involved and invested in the project or organisation.
     • Medium interest – Has demonstrated awareness of the project or organisation, its goals, impact, etc.
     • Low interest – Has not demonstrated awareness and is unlikely to seek out information, predicted to have little to no impact.
   • Influence – How much power does the stakeholder have in affecting the project or organisation?
     • High Influence – Has authority in the decision-making process, or controls key resources that the project/organisation depends on.
     • Medium Influence – Has authority in specific aspects, such as having specialist skills, and/or can influence specific authoritative people.
     • Low Influence – Little control over events about the organisation/project.
   • Impact – What is the tone of the potential impact?
     • Positive – Is likely to support or advocate, can provide resources or expertise, and can build some level of functionality for the project/organisation.
     • Negative – Has opposition or criticism, and could create obstacles, delays, or poor PR.
     • Neutral – Unlikely to take a stance in either direction. Ensure you only ever assign neutral if you’re sure.
3. Map – Illustrate a visual map in any format you desire, though we recommend a simple, grid-like structure. Mind mapping and network diagrams also work.
4. Prioritise – Mark all key stakeholders. These will be the ones with high levels of both interest and influence, and they will require the most involvement.

Bear in mind that many templates of a stakeholder engagement matrix (or map) exist online.

How do we deal with high-priority stakeholders?

How you deal with these key stakeholders is the most important part of creating an effective stakeholder engagement plan.

The following sequence will serve as the format:

1. Organisation/Project – Name the organisation or project in question.
2. Stakeholder – Name the stakeholder, whether it’s a person or business.
3. Interest/Influence – Identify and name the specific who, what, when, where and why behind the interest that this stakeholder has, as well as how much influence you’re ensured that they have.
4. Impact – The tone of the potential impact is important because it outlines the general behaviours that the stakeholder is likely to take.
5. Potential problem – What is the specific problem that the stakeholder will create?
6. Measurable resolution – The resolution to the potential problem has to be one that can be measured, tracked and proven to alleviate the problem. The resolutions are usually quite formal.
7. Action Plan – The action plan will outline the steps to take to reach a measurable resolution. It is split into phases, with each phase designed to heighten the working relationship of both parties.

High-priority stakeholder engagement planning – example

The following is an example of a hypothetical scenario involving a fictional environmental advocacy group named Sierra Club:

1. Project – The construction of Green Meadows Wind Farm, a large-scale renewable energy project proposed to generate energy to replace unsustainable methods.
2. Stakeholder – Sierra Club is a national environmental organisation dedicated to protecting natural resources and pushing sustainable practices. Their main interest is in preserving the biodiversity of migratory bird populations, and they particularly pay attention to project phases during bird breeding seasons. They are an external stakeholder.
3. Interest/Influence – Sierra Club has a large membership base in the local chapter that is aware of the project, and dislikes it – this makes them a high influence. If that local chapter also has the sway to mobilise and protest against the wind farm if they want to, then that influence is also high.
4. Impact – The Sierra Club is highly morally opposed to the wind farm project, as bird life is technically at risk. It’s fair to assume, then, that the impact is going to be negative. High interest and influence with negative impact is pretty much the most opposed kind of stakeholder you will find.
5. Potential problem – The potential problem has to be specific, and not necessarily a single outcome. Based on the Sierra Club’s past, it may be possible to assume that they could manifest the following:
   • Project delay – Delays could happen as a result of protests, or the negative publicity could cause investment to suffer.
   • Regulatory hurdles – Sierra Club could make it increasingly difficult to obtain the necessary permits and approvals, either through building a case or other activist means.
   • Reputational damage – Sierra Club could convince the wider population to oppose your company, affecting business.
6. Measurable resolution – The resolution must be targeted toward ensuring the potential problems are not realised. Sierra Club campaigning against the Green Meadows Wind Farm means that their members, and those who listen and agree with their cause, could unite and mobilise against the company. This means that Sierra Club must be changed from antagonist to at least neutral:
   • Short-Term (6 Months) – Sierra Club must show both Green Meadows and the outside world that there is no bad blood between them. Furthermore, there should be some proof of collaboration and effort to come to a middle ground. This will manifest in the form of announcements from both parties, photo ops, holding certificates jointly etc.
   • Long-Term (1 Year) – Signing a Memorandum of Understanding (MOU) with Sierra Club is much like two governments signing a sort of alliance. Ultimately, it is a sharing and outlining of goals from both parties, as well as the concessions and collaborative efforts both will make. In this context, Sierra would continue renewable energy efforts whilst also minimising environmental impacts either through changing plans, or offsetting it with new rules.
7. Action Plan – Create your action plan concerning the measurable resolution goals.
   • Phase 1: Communication strategy – Direct and transparent communication between Green Meadows and Sierra Club is key. As we’ve outlined before, the best practice is empathy and understanding. Acknowledge their concerns, listen to the reasoning and emotions behind their concerns, and demonstrate a willingness to collaborate – with a key emphasis on collaboration. Collaboration is how we go from cordial relations, to friendly.
   • Phase 2: Collaboration – Both Sierra Club and Green Meadows coming to the table and working together physically will create bonds between the two organisations, so long as they are working towards the goals and values shared by both.
   • Phase 3: Lasting Partnership – Like the old saying goes – if you can’t beat them, join them. The key part of your stakeholder engagement plan is turning threats into friends and keeping them that way. This can be done through long-standing, sustainable partnerships, such as establishing a joint task force to monitor the wind farm’s ecological impact or collaborating on research initiatives to minimise the impact of wind energy on avian populations.

Conclusion

In the end, a successful stakeholder engagement plan requires consistency. With consistent communication frequency and providing paths for both parties to get what they want, you can ensure different stakeholder groups will reduce in threat over time. Above all else, make sure you consistently update the stakeholder engagement plan map with new stakeholders as you discover them.

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