Every business, no matter how big or small, has stakeholders. A stakeholder is anyone who might be invested in or impacted by your business’s success. Stakeholders can be internal or external, and can include suppliers, investors, communities, employees, customers or partners. It is important to manage your various stakeholders effectively and understand their needs and priorities, as they will often have a direct influence on the way your business operates, the services you offer, your growth ambitions, and ultimately your business’ success.
After expanding Laundryheap’s operations into twenty cities across ten overseas markets, I know how important a strong stakeholder management strategy is when it comes to scaling successfully, managing conflict and achieving business goals. Here are my four top tips on how to develop an effective stakeholder management strategy.
Identify and prioritise your stakeholders
When creating a stakeholder management strategy, stakeholder identification, analysis and prioritisation is a vital first step. The aim of this process is to identify your key stakeholders and their roles, determine which stakeholders are the most influential and therefore need to be prioritised in your strategy, and understand what each parties’ interests are as stakeholders in your business, so that you can communicate with them on their terms.
Your primary, ‘priority’ stakeholders will often include your investors (if you’ve taken investment), your customers and your employees. At Laundryheap, we’ve always found that our customers are powerful external advocates for our business, whilst our investors are critical for our growth and business development, and our employees help us to provide a seamless service to meet customer expectations.
Identifying your most important stakeholders will help you use your time in the most effective way, creating a framework through which to prioritise your stakeholders’ needs.
Understand your stakeholders’ expectations
Once your stakeholders have been identified, it’s time to understand their expectations and priorities. At this stage, it is integral to understand which aspects of the business they want to be involved in, so you can work out how best to engage with them.
For example, investors or shareholders may want to be involved in strategic decision-making and growth plans, whereas customer advocates might care more about the quality of products and services and may want to be involved in feedback sessions or focus groups.
Understanding each stakeholder’s interests in your business will help you maintain constructive working relationships and is particularly important when you’re growing, and when your business is changing rapidly.
For example, the Laundryheap team faced a 300% upsurge in demand for our cleaning services during the pandemic. We needed to understand and adapt to the needs of our clients to ensure we maintained the high standards our customers were used to. During this time, Laundryheap took note of reviews that were posted online and proactively collected feedback to measure customer satisfaction and guide our decision-making. We also kept in regular contact with investors to keep them in the loop regarding our growth and the changes we were making in order to service increased demand.
Remember the importance of good communication
Within your stakeholder management strategy, you should outline the level, frequency, and type of communication you want to employ with each stakeholder, as well as who on the team is responsible for leading communication with each group. For example, your C-Suite might be in charge of investor relations, whilst your Customer Success Team might manage your community and client stakeholders.
Engage with your stakeholders early and regularly, monitoring their concerns and securing their ongoing support. This can be through focus groups, stakeholder interviews, regular meetings, newsletters and updating your website or social media channels consistently to keep stakeholders informed of business updates.
It’s particularly important to communicate clearly and transparently with stakeholders in difficult times when perhaps things haven’t gone according to plan or you’re having to make difficult business decisions. Stakeholders should hear critical company news from you first before they hear it through a third party.
Commit to an action plan that empowers stakeholders to make direct contributions
This is the element of your strategy where you can leverage your stakeholders to achieve your business goals – and have them share in your success. Here, you can create ways for stakeholders to have direct input on big decisions, rather than using top-down communication to simply inform them once something has been done. For instance, you might decide to involve stakeholders in testing a new product, or seek their advice on a strategic launch into a new market that they have experience in.
When engaging your stakeholders and seeking their contributions, lead with integrity and ensure they’re involved in a meaningful way. Listen to what they say, adopt suggestions wherever you can and acknowledge all contributions. This creates a collaborative and positive environment where stakeholders feel their contributions are valued and can see the direct impact they’re having on your business’ success and growth.