Stakeholder Management 101 – The Simplest Explanation Ever

Let's say you're planning to throw an awesome party. Sounds fun, right? But how will you make sure it is successful?

The indicator of success can be the profit you generate by attracting a large number of attendees to the party. Additionally, you would want to ensure that attendees will return for future parties.

Who do you need to work with to coordinate all of this?

At a minimum, you may want to involve:

• Venue owner
• DJ
• Security
• Bartender
• Promo manager
• Designer

...and this may not be an exhaustive list.

All of these individuals will have a vested interest in the successful completion of the party. However, they may not necessarily have identical needs and expectations.

For instance, the venue owner may desire to generate income by renting out the space and anticipate the venue to be cleaned without any noticeable harm after the party.

Meanwhile, the DJ, for instance, anticipates an audience that will value his artistic expression, and an increase in his followers on Spotify, Instagram, etc.

→ All these individuals will be your stakeholders, meaning they are parties with a vested interest in the project.

How to categorize your stakeholders?

By classifying stakeholders into different subgroups, you will be able to develop strategies around:

• Communications (when and how to inform)
• Decision-making (who and when to involve)
• Project work (how to cultivate ownership and engagement in the project).

  
  

Typically, stakeholders are categorized based on their interest, influence, and occasionally their behavior/attitude.

Let's consider, for instance, a bartender who isn't particularly concerned about the success of the party. For him, the priority is to attract a large number of attendees and receive a commission from the bar sales.

Therefore, the bartender has a low interest in the overall goal and a small level of influence, as his presence or absence does not determine whether the party will take place or not.

When it comes to behavior, the bartender can sometimes act as a blocker. For instance, they might refuse to work until they have an XL shaker, stating that it is impossible to work without such equipment. While they may be correct, a bartender with a more positive work attitude would make an effort to assist in finding a solution to the problem.

Based on the bartender profile and using a stakeholder categorization matrix, we can create a plan outlining how we will work with them, for example:

• Due to low influence, we will not include the bartender in making decisions regarding the party, such as the location, DJ, etc.
• Due to low interest, we are unlikely to inform the bartender about all the decisions related to the party, possibly only those that concern the bar.
• Knowing that there may be issues with the bartender, we will try to avoid them in advance to prevent disagreements from arising a day before the event.

  
  

When working with people involved in organizing the party, you will be engaged in stakeholder management.

Stakeholder management is a process that helps understand the needs and expectations of interested parties and build relationships with them. This will ultimately assist in hosting a successful party.

How stakeholder management is assessed during the interview process?

At interviews, this skill is assessed through the following questions:

1. Describe a situation in which you had to work with a difficult stakeholder. How did you handle it?
2. Share a situation in which you had to convince a stakeholder to collaborate on your project (provide feedback/resources, etc.).
3. How do you communicate with stakeholders?
4. Have you ever faced a situation in which your management denied you resources or the opportunity to work on a new project or change the strategy? How did you persuade them?
5. How do you manage stakeholders' expectations?