Financial Data
Updated 20 Nov 2018


Effective stakeholder management – the answer to success

Being in business and staying in business means that we have to continuously ask questions of ourselves and our stakeholders. It is important to analyse our stakeholders during the strategic planning process to ensure their support and business success. 


Betsy Ings, 14 December 2016  Share  0 comments  Print


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STAKEHOLDER CATEGORIES

To determine our stakeholders we must consult widely, brainstorm and be guided by the stakeholders we have already identified. Stakeholders can be defined according the following categories:

  • Direct ownersor targets of change. These are people who directly experience the problem or are at risk.
  • Indirect owners - People who contribute to the problem through their actions or lack thereof.
  • Challenge solvers – They are agents of change. These are key individuals or groups who can help address the issues that matter to the community.
  • Challenge sponsors – They are not only the financial supporters of the social enterprise, but also the people who contribute hugely by delivering the outcomes that projects are intended to deliver. 

Effective stakeholder management 

The stakeholder map is a powerful tool to determine the impact of stakeholders on a social enterprise. It is crucial to place the role players in the correct quadrant. The success of an enterprise is dependent on excellent stakeholder management. It is vital to determine what stakeholders can have the most positive or negative influence on our efforts, who is likely to be most affected by the effort and how we should manage our stakeholders effectively.

Related: The importance of stakeholder engagement

Stakeholder analysis 

Stakeholder analysis can divide stakeholders into one of four groups:  

Stakeholder Groups

 

Resource: Mind Tools – Stakeholder Analysis Winning Support for Your Projects – a business oriented method which can be applied elsewhere as well.

The stakeholders are defined in terms of how they relate to the effort:

  • Promoters - have both great interest in the effort and the power to help make it successful (or to derail it).
  • Defenders -  have a vested interest and can voice their support in the community, but have little actual power to influence the effort in any way.
  • Latents - have no particular interest or involvement in the effort, but they have the power to influence it greatly if they become interested.
  • Apathetics - have little interest and little power. They may not even know the effort exists. 

Long term relationships

Understanding our key stakeholders is paramount in guiding our stakeholder engagement and communication efforts. Our long term relationship with them is important to attain the level of participation and support we need to run a sustainable social enterprise. 

Related: 10 Tips and tools to turn your team into for high performance sellers

 


A Bangladesh case study 

Muhammad Yunus from Bangladesh established the Grameen Bank, a micro-finance social enterprise, which provides us with a good example of successful stakeholder identification and relationship management with key promotors and defenders:

“Whilst the Grameen Bank continues to provide micro-credit and reaching out to the poor, I saw many of the other problems of poor people. These include healthcare, education, housing, sanitation and nutrition. Every time I saw these problems, I tried to find a solution for it. I created businesses to find the solutions. I created many, many businesses — more than 50 such businesses — all geared towards solving problems. Danone, in France, is a big milk production company. We have a joint venture as a social business, meaning that Danone will never take any profit out of the business. Almost half the children of Bangladesh are malnourished, so we created this yoghurt and made it very cheap and delicious so that children love it and can afford it. We have solved the malnutrition problem. We also have a joint venture with BASF in Germany, producing mosquito nets in Bangladesh to help prevent malaria. Again, BASF doesn’t want to take any profit out of this company.”  

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About the author


Betsy Ings

Betsy Ings is the founder and MD of Tradelane Training & Project Management and Siyaloba Training Academy. Tradelane’s vision is to make a sustainable impact on the economy by promoting growth of small enterprises, youth and women entrepreneurs. She finds solutions through their 3-enabler approach - knowledge and skills through training, mentoring/coaching through individual, peer/group sessions and financial linkages through partnerships. Betsy is an internationally accredited programme provider/facilitator to various United Nations organisations. Contact details: [email protected], 072-340-3398 or www.tradelane.co.za

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