Last updated on April 1st, 2024 at 11:13 am
Stakeholder management refers to the process of classifying, assessing, and supervising the team of stakeholders of a business organisation. It is crucial to engage in stakeholder management for successful capital budgeting in every financial year.
Stakeholder management is a key factor of product and service management as each stakeholder plays a substantial role in the life of the products and services offered by a company. It is the responsibility of the product manager of every company to identify the stakeholders for the establishment of pivotal stakeholder relationships with the company. A company is generally associated with both external and internal stakeholders.
The stakeholders of a business organisation include shareholders, employees, suppliers, clients, customers, governmental bodies, and communities. Read on to gain a deeper insight into the soft skills required to engage in fundamental stakeholder management in a company.
Requisite skills for efficient stakeholder management
1. Communication
It is important to be skilled at communication for the smooth flow of information among stakeholders. Being communicative helps in building firm relationships with stakeholders, which in turn, is useful in creating a positive image of the company. Effective communication not only establishes credibility, respect, and trust in the company but also ensures the well-organised execution of projects.
2. Stakeholder assessment
Stakeholder assessment refers to the process of categorising and analysing stakeholder interests. Stakeholder assessment is vital as it helps in identifying the stakeholders and understanding their interests. The information, thus obtained, helps in the development of strategies for managing stakeholder potentials, avoiding discord, and attaining their support for important business decisions.
3. Dispute resolution
One of the most imperative skills for efficient stakeholder management is dispute resolution. A thorough understanding of the conflict helps in preventing or resolving friction among stakeholders. Quick and fruitful resolution of disagreements can help in improving relationships among stakeholders within the business organisation. Conflict resolution involves the active implementation of the skills of intervention, conciliation, compromise, and mediation. The resolution of conflicts requires one to detect the root causes of the conflict to reach a settlement that is acceptable to the parties to the conflict.
4. Project Management
Project management refers to the process of slating, accomplishing, and administering a business project from the beginning to the end. The skill of project management involves the development of business objectives, the creation of a timeline, the allocation of tasks to resources, and the supervision of progress. Project management also involves the close collaboration of the project manager with stakeholders who have a vested interest in the particular project.
5. Business analysis
Business analysis refers to the scheme of comprehending the objectives of a project in order to chalk out a course of action. For efficient business analysis, the CFO needs to collect and assess information, identify positive and negative aspects, and offer propositions for the improvement of the business. The business analyst works in close cooperation with the stakeholders to make sure that the organisation is employing its resources effectively for the smooth execution of projects.
6. Relationship management
Relationship management refers to the approach of establishing and maintaining flourishing relationships with a company's stakeholders. It is not only effective for fruitful dispute resolution but also for building confidence and credibility, gaining support, and acquiring sponsorships for projects or any other business initiative. It is important to focus on being proactive, instead of reactive, for the successful formation of relationships with stakeholders. For effective relationship management, the relationship manager needs to anticipate and resolve potential conflicts and analyse the needs and interests of stakeholders.
7. Negotiation
It is pertinent to be skilled at negotiation to reach an agreement that is acceptable to every party involved. Effective negotiation helps in the quick resolution of disputes which is essential for the smooth accomplishment of business goals. For effective negotiation, it is important to assess the interests and needs of every party in order to find a common ground for the resolution of issues. Clear negotiation also requires one to be passively assertive and agreeable to compromise.
8. Requirement gathering
Requirement gathering is a critical stakeholder management skill that helps in understanding the needs and wants of stakeholders in association with a project. The information helps in developing project goals, extent, and timelines. Requirement gathering also helps in identifying potential risk factors, which in turn, aids in ensuring that the stakeholders’ needs in relation to the project are duly met. It involves regular conferences with stakeholders to understand their needs and expectations. Business organisations employ interviews, surveys, and focus groups to collect information from the stakeholders.
9. Change management
Change management refers to the methodology of outlining, performing, and supervising changes for the successful implementation of the changes in the projects. It makes sure that the stakeholders are aware of the changes made to the project. Change management is crucial for affirming that the changes executed are in alignment with the business goals of the company. The whole approach of change management helps in preventing resistance to the changes and also guarantees that the changes are compatible with the company culture.
10. Influence
Influencing is another stakeholder management ability that allows one to exert influence on the decisions pertaining to the key stakeholders of the company. Influencing stakeholders helps in making communication more effective and also makes the stakeholders more receptive towards recommendations related to capital budgeting, resource allocation, and other business aspects, made by project managers.
Conclusion
Stakeholder management skills play a crucial role in the smooth functioning of a business organisation. It is of the utmost importance to understand the interests and needs of stakeholders and assess their power levels in order to design a stakeholder management plan. If you seek to create and implement a stakeholder management plan then you may enrol in the Chief Financial Officer course offered by Imarticus.
The Chief Financial Officer is one of the prime stakeholders of a company. The CFO is vested with myriad soft skills that aid him in adding extensive strategic value to the products and services of the company. Such soft skills include communication, negotiation, business assessment, change management, and many more. Enrol in the Chief Financial Officer course right away to understand the nitty-gritty of stakeholder management.
