Why stakeholders matter in strategy implementation

Why stakeholders matter in strategy implementation
Why stakeholders matter in strategy implementation

Africa-Press – Lesotho. STAKEHOLDERS can make or break the implementation of your strategy. It’s therefore imperative in strategy formulation that, at the outset, you perform a stakeholder analysis to identify the key influencers, supporters or blockers of your strategy.

Stakeholder analysis and management are crucial if an organisation is to succeed. You need to engage the right people in the right way. Engaging the right stakeholders can make a difference to your strategy.

A “stakeholder” is anyone who has an interest in the value that the organisation creates. In a commercial setup this could be shareholders, customers, suppliers, employees, government and its agencies and the community or society at large.

The actions that the organisation take and the strategic decisions that it makes will invariably affect a lot of people, albeit in different ways and varying degrees depending on their level of interest in the institution.

The organisation’s actions and decisions will likely impact people who have power and influence over its strategy. These people can act as positive levers to the implementation of the strategy or can block it if it will affect them negatively.

As a leader in your organisation you need to know who exactly your stakeholders are and what power they have and how much interest they have in the organisation. Can they exercise their power and under what conditions will they do so?

The process in stakeholder management starts with stakeholder analysis-which is the identification of the key stakeholders who are interested in your organisation that need to be won over. The next step is to work out how much power and influence they wield and how much interest they have in your organisation.

Once the key stakeholders have been identified, their power, influence and interest having been assessed, you then have to work out how to build the support you need from these key stakeholders that will ensure the successful implementation of your intended strategy.

There are benefits that will accrue to the organisation by engaging its key stakeholders. Your organisation can use the opinions of the most powerful stakeholders to shape its strategy and ensure you get their support.

When you engage early with your stakeholders and communicate regularly with them they will appreciate what you are doing and how this will impact on them. They will be amenable to release resources that you need for the strategy to succeed.

Stakeholder engagement helps you anticipate their reaction to your strategy and therefore you can come up with an appropriate plan to address their concerns early before these concerns become an issue that can stall the strategy implementation.

The process of stakeholder identification requires that you think of all the people or organisations that are affected by your actions or decisions. Those who have influence or power over the organisation, or have an interest in the successful or unsuccessful implementation of its strategy should be identified.

The stakeholders for each organisation vary but will likely include the following: shareholders, government, suppliers, customers, management, employees, analysts, trade unions, business associations, the public and the community.

If you are dealing with organisations, as one of the stakeholders, make sure that you identify the right individuals in that organization to communicate with.

The stakeholder list that you come up with after the brainstorming will have varying levels of power, influence or interest in the organisation. Others may be interested in what you are doing, but others may not care.

Some may have the power to either block or advance your strategy. You need therefore to prioritise the key stakeholders that you need to pay very close attention to.

This part of the analysis can be done using a framework that will classify stakeholders by their power over your organisation and by their interest in that particular strategy.

If a stakeholder has high power and is very interested in your organisation, you need to fully engage and make the greatest efforts to satisfy such stakeholders. They can stifle implementation of your strategy. An example would be management, employees or key customers.

If on the other hand the stakeholders have high power but are less interested, then just put enough work in these stakeholders to keep them satisfied but not as much as the above stakeholders.

These could be the institutional shareholders like pension funds. The other stakeholders are those with low power but are very interested. You would need to keep these people adequately informed, and communicate to them to ensure that no major issues arise.

If these stakeholders are on your side, they can assist you very well in ensuring that they speak well of the strategy. Such people or organisations could be pressure groups.

The last group is those who have low power and minimal interest in the organisation. You need to monitor these stakeholders but give minimal attention.

The first three groups of stakeholders are your key stakeholders. You need to know how they feel and will react to your strategy and how best to engage them and how best to communicate with them.

In dealing with the key stakeholders you need to know first their likely response to your strategy. Identify what really motivates them. You should establish whether they would behave differently if they have the relevant information about the strategy. You also need to know the decision makers so that you can engage them.

You need to talk with the key stakeholders because this will show that you respect their opinions and by so doing you establish a good and successful relationship with them and they will obviously support your strategy if it incorporates their opinions and addresses their concerns.

Timely, frequent and informative communication involving all key stakeholders will ensure support from key stakeholders and ensure successful implementation of your strategies.

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