One of the terms we often hear bandied about in the world of business is the stakeholder, but who are they and what do they actually do? A stakeholder is a person who has an interest in a business’s success or its failure. The primary role of the stakeholder is to develop plans that help businesses define their goals and achieve them. It’s also incumbent on a stakeholder to keep their finger on the pulse of the business’s day to day operations in order to help implement more efficient strategies. They are also interested in the performance of employees to make sure everyone is working efficiently toward achieving the business’s growth objectives- after all, they hold a stake in the outcome!
Considering their importance to a business’s ongoing success, communicating with stakeholders in a positive, productive manner is always a priority! Understanding the stakeholder’s needs and expectations will help to ensure your business’s ongoing success. Let’s learn some more about how the stakeholder system works!
There are basically two different kinds of stakeholders, internal and external. The internal stakeholder is someone who is directly involved in the day to day workings of the business, people like the employees, board members, and the shareholders. These are people who are deeply vested in the business’s ongoing success because it is tied directly to their livelihoods. Board Members are an important internal stakeholder because they are tasked with making sure the business is operated in a legal and ethical manner as well as seeing to it that another internal stakeholder, the shareholder’s interests are being attended to. The shareholders are the business’s owners and their concerns in regards to its success are paramount.
The external stakeholder is a person who is not involved directly with the business but maintains an interest in its outcomes, positive or negative. One good example of an external stakeholder is a creditor the business is in debt to. Even the government might be considered to be an external stakeholder in its capacity to regulate businesses and collect taxes from them!
All types of stakeholders play essential roles in a business’s ongoing performance. The internal stakeholders like employees are at work producing the goods or services that external stakeholders, like customers, can purchase to provide revenue. All stakeholders are important to a business and its success, which makes effectively managing stakeholder relationships an ongoing priority.
The productive management of stakeholders is based upon prioritizing, identifying, and engaging with them. Stakeholder management’s goal is to ensure their needs are being met. One example of this is whether or not the stakeholders are satisfied with a project or initiative’s outcome. Engaging with stakeholders throughout these processes is a necessity that can be accomplished by staying in close touch with them via emails, group calls, or meetings, during which the business carefully listens to their concerns, which will help to maintain a great working relationship with them.
Ignoring the stakeholders is a recipe for disaster for any business, it is vital that they be heard, and to keep them supportive of your efforts! Treating your stakeholders with respect and listening to them will ensure your business’s future is bright.
