What are Stakeholders, why are they important and what challenges do companies face in dealing with them?
Stakeholders are persons, groups and organisations that are directly or indirectly affected by or have a concrete interest in the activities of a company. They can be natural persons or legal entities.
The term stakeholder is derived from the two words stake and holder. The word stake means claim or share, holder means owner or proprietor. A stakeholder therefore has an interest in the activities of a company because its stake is at stake.
Typical stakeholders are:
- employees and customers,
- suppliers and partners,
- trade unions, associations and consumer organisations,
- as well as capital providers such as owners, silent partners, shareholders or banks.
In addition, also
- authorities or
are stakeholders, because they can significantly influence the achievement of corporate goals.
Identification of Important Stakeholders
Stakeholders are essential for the development of systems and in the design of projects and undertakings. Surveys show that projects often fail because there is no clarity about stakeholders and thus an important source of requirements is missing. Identifying all important stakeholders is the task of stakeholder identification.
Within the scope of a stakeholder analysis, companies must identify their relevant stakeholders, their expectations and influence possibilities, as well as the associated opportunities and risks. This is important because stakeholders behave differently. At a cinema a customer would probably wait several minutes in line at the box office, but would not accept this in an online shop.
Who ignores stakeholders
- often does not know what is to be developed,
- does not recognise problems in time,
- neglects those who have a relevant interest in the success of a project,
- missed opportunities to improve products and systems,
- detects too late when a project gets into trouble.
Tips for dealing with stakeholders
Professional interaction with stakeholders is very important for companies. As the project manager, you should therefore record the following information for all relevant stakeholders:
- What is the stakeholder’s influence?
- What is the stakeholder’s attitude and motivation towards the project or plan?
- What are his goals?
- How influenceable is he?
- How is he perceived and how does he represent his opinion?
- What conflicts are there between him and other stakeholders?
In addition, you should also document contact data with the appropriate communication possibilities and times, as well as conflicts with other stakeholders. Simple tables or a stakeholder matrix can be used for documentation purposes. Since stakeholders can also change their opinions, it makes sense to review their knowledge at regular intervals. Only if you notice changes can you respond to them.
Stakeholders and Conflicts
Stakeholders pursue individual goals. There can easily be conflicts between the goals of the individual stakeholders, e.g. if quality leadership on the one hand and price leadership on the other are sought. Such professional conflicts can also easily become personal conflicts between the stakeholders.
It is important for the success of a company to recognise conflicts at an early stage and to define highly effective measures for stakeholders. You can visualise such conflicts with goal diagrams.
Stakeholders and Shareholders
In addition to stakeholders, the term shareholder is also often used. The shareholder approach focuses on the economic interests and expectations of the company’s investors. The primary goals are therefore to maximise sales and profits. This is the so-called shareholder value.
In theory, the interests of stakeholders are only considered if a positive effect on the success of the company can be expected. However, since companies are hardly in a position to concentrate exclusively on the interests of shareholders or the needs of stakeholders, both approaches are often pursued simultaneously in practice.
Challenges for companies
Stakeholder Identification and Stakeholder Analysis
How do you identify who your stakeholders are and which motives, attitudes or goals they pursue? In the course of stakeholder management, it is important that companies identify and analyse stakeholders. This must be done as early as possible, but is not a one-off task, because stakeholders change their opinions and priorities during the course of a project. You should therefore define a procedure for stakeholder identification and analysis. Ideally, you should document and version your findings because this will enable you to trace project changes back to changes in stakeholders at a later point in time.
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