What is a Stakeholder?

The term shareholder is often used alongside interest groups. The shareholder concept is aimed at the economic interests and expectations of the company’s stockholders. The primary objectives are therefore maximisation of turnover and profit. This is the so-called shareholder value.

In theory, the interests of involved parties are only taken into account if a positive effect on the company’s success can be expected. However, since companies are hardly in a position to focus exclusively on the interests of shareholders or the needs of stakeholders, both approaches are usually pursued simultaneously in practice. Possible conflicts can be visualised with goal diagrams.

The following information should be recorded in the course of stakeholder documentation:

• What is the influence of the stakeholder?
• What is their attitude and motivation towards the project or undertaking?
• What goals are they pursuing?
• How influenceable are they?
• How is the stakeholder perceived and how do they express their opinion?
• What conflicts are there between them and other stakeholders?

It also makes sense to document the contact details with the appropriate communication options and communication times, as well as the conflicts with other stakeholders. Here you will find a template for creating a stakeholder list.

When working on projects and developing products, companies need to identify all relevant stakeholders and understand how their power and interest influence the success of the undertaking. Stakeholder mapping offers a solution here by creating a visual representation of stakeholders based on their importance. This method helps companies and project teams to develop targeted communication and management strategies to improve collaboration and recognise and manage potential conflicts at an early stage.

Typical forms of visual representation are matrix, circle or mind map, alternatively there is also a tabular representation.

Here you can find more details on stakeholder mapping.

The stakeholder analysis identifies the most important stakeholders with their interests, power, attitudes and influence. The stakeholder matrix visualises the findings in relation to each other in an XY diagram. Which properties are shown as organisational characteristics on which axes varies. For example,

• the influence of individual people from low to high,
• the attitude towards a defined undertaking from critical to positive,
• the opinion from fixed to open,
• influenceability from low to high or
• interest from low to high

can be visualised.

Here you can find more information on the stakeholder matrix.

The development of products, the realisation of projects or the implementation of a corporate strategy are often faced with the challenge of taking into account the different interests of stakeholder groups. The difficulty lies in coordinating these interests and achieving a common vision. A lack of stakeholder alignment can lead to delays, conflicts and the failure of undertakings. Stakeholder Alignment offers a structured approach to understand, consider and align the interests of all stakeholders and affected parties towards common goals to ensure the success of undertakings.

Here you can find more information on stakeholder alignment.

In practice, there are very different challenges to overcome. Here you will find a list of possible challenges:

• The identification process was carried out once several years ago and has been used again and again since then – without checking for correctness or completeness. Using existing stakeholder lists is not necessarily wrong, but the list should always be critically scrutinised and updated.
• Identification is not carried out at all because the owner of the company believes he knows the market. In such a situation, it would certainly be right to ask the owner where he got his knowledge from and how valid it actually is. However, this requires courage, resilience and possibly also a certain standing in the organisation.
• Product Owners and product managers are of course also stakeholders, but above all they are representatives for other stakeholders. Knowing what the Product Owner wants or believes is therefore not really enough.
• The analysis is taken lightly because, after all, “you know what the customer wants”. Unfortunately, this attitude is widespread in many organisations and can lead to products that “nobody” wants, that provide features that “nobody” understands and that “nobody” uses.
• When analysing, relationships between individuals or groups of people are often overlooked. For example, if an undertaking is supported by one person, this could lead to the other person rejecting the undertaking if the relationship between that person and another person is poor. Analytical skills, moderation and often tact are required here.
• Communication takes place without a plan. Based on the identification and analysis, the people or organisations important for a development or project should be determined with their goals, motives and wishes. The frequency of communication should, for example, be geared towards the specific importance of the stakeholder and, of course, their time and formal expectations.

Of course, the list can easily be extended, as life presents the best challenges. The important thing is that you identify your challenges, analyse them and communicate about them.

There are internal stakeholders who are critical of certain undertakings, developments or changes. Of course, there is no magic formula for dealing with critical stakeholders, but there are a few steps that can help to improve mutual understanding:

• Firstly, it is important to understand the critics’ perspectives. Open discussions and active listening often help to recognise concerns, objections or reasons for rejection.
• Every point of view deserves respect. Respect is shown when objections and personal assessments and experiences are taken seriously and responded to in substance.
• Proactive action, giving reasons for decisions, communicating goals, documenting agreements and solving problems quickly often help when dealing with critical people.

And what can organisations do if nothing changes for the better despite these steps? Then it can be useful to look for advocates who have a good relationship with the critical people and promote the project, development or change. In some situations, escalating a conflict or calling in external experts can also help; there is no one-size-fits-all solution.

The discussion about the role of customers is often accompanied by a discussion about the importance of employees. Who is more important for the success of a company: the employees or the customers? Three opinions can be grouped together:

1. Employees are more important because without their work and performance, companies would not be able to sell products or services. Without employees, there would be no customers. Consequently, employees are the real kings.
2. Customers are at the centre of a company’s attention. They pay the bills and therefore also the employees’ salaries. Without customers, there is no need for employees. So the customer remains king.
3. The truth lies in the middle: Employees and customers are equally important and are mutually dependent. They cannot exist without the other. They are two sides of the same coin. Or to put it another way: Employees and customers are kings.

Here you will find a personal assessment of the topic.