Effective stakeholder management is a fundamental pillar for the success of any project. In this context, general managers play a relevant role in having the mission to involve critical actors. Understanding and balancing needs and expectations and maintaining fluid communication is essential to ensure support and collaboration during project execution.
However, stakeholder engagement is not without its challenges. Managers face a series of obstacles that can hinder the creation of solid and productive relationships. Let’s explore the main challenges to achieving effective stakeholder engagement and consider insights on some practices to overcome them.
Challenges in Stakeholder Engagement
1. Diversity of Stakeholders
Business projects often involve a wide range of actors with diverse interests. Sometimes, companies don’t know who they will relate to.
Managing this diversity and creating a comprehensive approach can be significant challenges. Therefore, the initial action should be oriented towards the precise identification of stakeholders. This includes both internal (such as employees, managers, and departments) and external (such as customers, investors, regulators, and the community) stakeholders.
Once identified, it is essential to prioritize these groups according to their level of interest and influence on the project. In particular, large companies, especially in sectors such as mining or industry, must determine the impact of their operations; this is both for the communities that could be affected and for organizations (such as Greenpeace, for example) that could generate criticism related to the environmental and social impact.
As we have mentioned in previous articles, sustainable resource management, mitigation of negative effects, and promotion of responsible practices are essential elements for the success of any relationship strategy.
2. Effective Communication
Lack of communication can lead to conflicts and misunderstandings, negatively affecting project execution.
Therefore, it is crucial to develop a clear and concise communication plan that defines what information should be communicated to each stakeholder, how it will be communicated, and how often.
3. Managing Expectations
Aligning stakeholder expectations with project reality can be complicated. General managers must manage expectations transparently to avoid disappointment and mistrust. Likewise, they must set realistic expectations from the beginning of the project and proactively manage them throughout.
4. Changing Priorities
Stakeholder priorities can change over time due to internal or external factors. Adapting to these changes and adjusting the engagement strategy is essential to maintaining consistent relationships. It also involves identifying and analyzing potential conflicts of interest between stakeholders in order to develop strategies to manage them constructively and efficiently.
Diverse Types of Stakeholders in Project Execution
Effective stakeholder management requires a personalized approach for each type of interest. General managers must understand the distinctive characteristics of each group and adapt their engagement strategies accordingly. Let’s explore the main types of stakeholders and some recommendations for each:
- Communities and Regulators: The project can affect community groups in terms of the environment and employment, among other things. Regulatory bodies can impose significant requirements and restrictions. The project’s reputation in the community can impact its acceptance.
Recommendations:
- Actively collaborate with the community and listen to their concerns.
- Comply with local regulations and standards.
- Implement sustainable and socially responsible practices.
- Customers: They are directly interested in the final product or service. Their satisfaction directly affects the company’s reputation. They can provide valuable feedback on the quality and usefulness of the product.
Recommendations:
- Maintain open lines of communication to understand customer expectations.
- Conduct surveys and satisfaction analyses to measure and evaluate the customer experience continuously.
- Adjust strategies according to customer needs and feedback.
- Shareholders/Investors: They seek a return on investment. They can significantly impact strategic decisions, and their trust can influence the company’s valuation in the market.
Recommendations:
- Provide transparent and up-to-date reports.
- Communicate the company’s vision and strategy.
- Manage expectations and demonstrate a long-term sustainable approach.
- Employees: They contribute directly to the project’s execution and success. Changes in the company can affect their morale and performance, and they represent the organization’s internal culture.
Recommendations:
- Foster open and transparent communication.
- Recognize and reward good performance to maintain motivation.
- Provide development and training opportunities.
Monitoring and Evaluating Engagement
Measuring and evaluating the performance and impact of engagement with different stakeholders is crucial to knowing the degree of compliance with objectives and the benefits generated for all parties involved in a project.
It is the right way to identify the strengths and weaknesses of stakeholder relationship management and detect opportunities for improvement. It also requires corrective or preventive actions to generate shared and sustainable value, with the aim of contributing to the development of the environment and society in general.
A continuous monitoring system helps assess progress toward established goals and incorporates digital tools that allow collecting and analyzing relevant and up-to-date information in real time.
Using data analysis tools provides an accurate way to examine trends and patterns related to the indicators established to determine the different metrics applicable to relationship management, facilitating the identification of areas for improvement and success.
By adopting digital solutions, companies can monitor changes in their stakeholders’ perceptions, identify and classify them, and capture all related interactions and key actions that support the initiatives that are part of the strategies.
M-Risk, an ESG comprehensive management software, is a good example of these tools. Its application allows consolidation of a stakeholder map (shown in the image) organized according to their power level, enabling monitoring perception changes for adequate management and accurate decision-making.
In any case, general managers must address challenges by implementing best practices and using appropriate tools to measure and manage the impact of their relationships with diverse stakeholders. Transparency, effective communication, and adaptability are key in this dynamic process and essential for the sustainable growth of any organization.
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