Guide
As any business owner or entrepreneur knows, no business can operate in isolation. The success of your business depends on the actions of key stakeholders.
So, if stakeholders are so important, it makes sense to correctly identify and prioritise all the stakeholders in your business.
Here we talk about an important method for doing just that: Stakeholder Mapping.
Let’s start with a definition for a stakeholder.
A stakeholder may be considered any group or individual who can affect or is affected by the achievement of the organisation’s objectives.
It is clear from this definition that the list of a business’s stakeholders will change from business to business.
Businesses that engage most effectively with their stakeholders can generate benefits both for the business itself as well as to the stakeholders that it impacts.
If you know who your stakeholders are, you will be in a much better position to manage and engage them, and to potentially turn them into advocates for your business.
Stakeholder mapping not only identifies a business’s stakeholders, but also helps you categorise stakeholders by the approach that will be best taken to engage with each group.
This targeted approach allows you prioritise your most critical stakeholders and target limited resources where they will provide the most benefit.
Stakeholder mapping can be conducted at a company level, for example when setting a new business sustainability strategy, or it can be completed at the project level, where stakeholders influential to or impacted by the project are mapped in the early stages of the project process.
While this guide focuses on the use of stakeholder mapping at the company level for implementing sustainability objectives, the steps and principles can also be applied at the project level.
Stakeholder mapping can be conducted in-house or by a third-party consultant.
When conducting a stakeholder mapping for a sustainability strategy, using an experienced sustainability professional can provide a high level of both independence and expertise.
This specialist knowledge should also be supplemented by business representatives that can provide context specific to your business.
Inputs from a broad range of sources help to make sure your stakeholder list and mapping process is comprehensive.
The first step is to make a comprehensive list of all the stakeholders for your business.
For a business level stakeholder mapping exercise, a stakeholder will not normally be a specific company or individual, but rather a group term, such as employees or customers.
You should try to make this list as comprehensive as possible, listing every group that is impacted by your business. Consider your impact on other businesses up and down the supply chain. Stakeholders can include competitors, where the impact may be of less concern to you. A full list of stakeholders may include groups that don’t have a voice such as the environment or future generations or that may be represented by other groups (such as charities or NGOs).
Once you have developed your stakeholder mapping list, consider getting another internal member of your team to review it with the purpose of enhancing this further. An alternative approach could include conducting workshops with key individuals to develop a comprehensive stakeholder list.
The second step is to take each stakeholder you identified in the first step and give them a rating against two different criteria: impact and influence.
Impact refers to the level of impact that your business has on a stakeholder. These impacts could be positive or negative and could occur through your products and services, procurement, financing, employment, environmental impacts, supply chain, community initiatives etc.
Influence refers to the level of influence that a stakeholder has on your business. As an example, for most businesses the stakeholder Customers will tend to receive very high influence rating, as a change in customer perception of the company will have a significant effect on business performance.
A relatively quick and easy way to create a stakeholder map is to rate each stakeholder by impact and influence on a low-high scale.
A more comprehensive approach may be to define categories of importance that relate specifically to your business that sit within the impact and influence criteria and rate each category individually. The final figures can be averaged or weighted according to importance to provide the end result.
Using workshops with key representatives from across the business can provide a range of perspectives on impact as this can often be different in different departments.
Once you have your results, you want to chart each of the stakeholders on your list with their impact score from low to high along the horizontal x-axis and their influence score along the vertical y-axis.
Your stakeholders can then be split into four segments based on their position on the stakeholder map. These segments on your map can then help determine your management approach with each group.
The segments can be considered as follows:
o Engage: Stakeholders in this category score high for impact and high for influence. These are your most critical stakeholders, and an active engagement approach is recommended to identify and minimise negative impacts and generate a positive relationship.
o Satisfy: Stakeholders in this category score low for impact but high for influence. An example of a stakeholder that is often in this category are regulators the requirements placed must be met and where the business impacts on the stakeholder are less important.
o Inform: Stakeholders in this category score high for impact but low for influence. Here the impacts of your business will need careful management. While these stakeholders may not be as critical as those in your Engage category, consider that some stakeholder groups have proxies that may be in the engage section(such as NGOs representing the environment or workers in your supply chain).
o Monitor: Stakeholders in this category score low for impact and low for influence. These will often be the least critical for your business but should be monitored in the event that either their impact or their influence grows, moving them into a more significant category.
Once you have mapped your stakeholders, you can use this to evaluate your current stakeholder management and engagement activity.
Discuss the stakeholder mapping outcomes with key internal stakeholders. Are there any surprises? Do any assumptions or scores within the mapping need adjusting based on feedback from others?
When using your stakeholder map to guide your stakeholder engagement strategy, you may want to consider the following questions:
o Do you currently have a communication plan with each of the stakeholders identified in the engage/satisfy/inform sections of your grid?
o Do you need to adjust your level of communications with any of the stakeholder groups you identified?
o For the most critical stakeholders, are you clear on what their sustainability concerns are and whether you are addressing these adequately?
Finally, the position of your stakeholder map may change overtime, so it is worth revisiting your stakeholder map regularly to ensure this remains up to date.
At Good Business Sustainability we help to make being green easier.
We provide a broad range of sustainability consultancy services tailored to small businesses, entrepreneurs, and start-ups. Our services include consultations, projects, and retainers across a range of sustainability topics and business sectors.
If you would like support to conduct a stakeholder mapping exercise for your business, why not set up a free initial exploratory call with one of our sustainability professionals today.
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