As a project manager, marketing manager or community developer, the term “Stakeholder Engagement” is not alien to you. However, to give anyone reading this blog post a clear understanding of what stakeholder engagement is, we need to clearly define the term. Let’s break it down.
Who is a Stakeholder?
According to the International Finance Corporation, “Stakeholders are persons or groups who are directly or indirectly affected by a project, as well as those who may have interests in a project and/or the ability to influence its outcome, either positively or negatively. Stakeholders may include locally affected communities or individuals and their formal and informal representatives, national or local government authorities, politicians, religious leaders, civil society organizations and groups with special interests, the academic community, or other businesses”.
In very simple terms, Stakeholders are people or groups who have a stake in a project or organization and who impact and actions can hinder or grow the organization or project. Stakeholders can be internal and external. Internal stakeholders are people who are directly part of your organization. For example; employees, owners, shareholders and board members. External stakeholders are not directly part of your business but their actions can still affect your business negatively or positively. External stakeholders include suppliers, customers, partners, government, social media followers and the local/wider public.
What is Engagement?
YouMatter defines Engagement as “an umbrella term that covers the full range of an organization’s efforts to understand and involve stakeholders in its activities and decisions.”
For an organization’s goal or project to progress and excel, every stakeholder needs to participate and be carried along at every stage of the project. If they are left out of the equation, the project will very likely fail. For example, an oil and gas exploration company has discovered oil in a community and intend to set up base there. Other than the owner of the land where oil has been discovered, the local chiefs, king, as well as the local government Chairman and other stakeholders, have to be engaged by the company. Their approval is tantamount to whether the oil and gas exploration company will be allowed to explore their land for oil.
What then is Stakeholder Engagement?
This is the process where organizations generate buy-in from their stakeholders and get them more interested in their business. Stakeholder engagement is also one of the ways a company ensures responsibility to all its stakeholders by fostering their involvement in the projects and activities of the organization.
Importance of Stakeholder Engagement
When an organization engages its stakeholders in vital projects, it benefits the organisation as well as their stakeholder. However, I believe it benefits the organization more because it helps them meet their strategic and tactical needs whilst building trust between themselves and the stakeholders. Other benefits of Stakeholder Engagement are:
- Gives your organization the social license to operate, expand and innovate
- Helps your company make more informed decisions
- Improves the relationship between your company and its stakeholders
- Creates opportunity for your stakeholder to contribute to the growth of your organization and share their varying experience, expertise and knowledge
- Furnishes your brand with a positive public image which improves its reputation
- Ensures more effective risk management
- Provides your organization with a better understanding of your stakeholder’s needs at different levels
- Aids to easily identify strategies that will help your organization to gain a competitive edge
At Caritas Communications, we understand the importance of Stakeholder Engagement and can take the hassle of managing and engaging your stakeholder off your hands. Send us a brief today.