Identifying Stakeholders: Building a Comprehensive List and Segmentation, Exercises of Business

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Identifying Stakeholders

1 IDENTIFYING STAKEHOLDERS

Our next step is to start finding out who our stakeholders are and our starting point is to build a list of all stakeholders with high-level categories to serve as a master list. We can refine and expand this master list according to the needs of individual projects that require stakeholder engagement. As we have seen in the previous chapter how and why stakeholder involvement is desirable can vary per organisational function. ftis is reflected in the selection of specific stakeholder groups as well as in the level of detail we need about them as we shall discuss further in this chapter.

1.1 LISTING STAKEHOLDERS

We cannot engage with stakeholders at all without first finding out whom or what they are: stakeholders can be individuals as well as other organisations. To minimise the risk of overlooking an important stakeholder or group we first build an exhaustive list. Here are some methods:

• Brainstorming alone or in groups
• Tracking down mentions of stakeholders in strategies, plans, meeting notes and reports
• Online searches, for example to discover previously overlooked local groups and competitors
• Asking stakeholders themselves to look through the (relevant parts of the) list and add to it

It helps to involve as many people as you can, bearing in mind any constraints of confidentiality of course. these people can be both internal and external to your organisation.

which was introduced in Chapter 1 as our starting point. The changes have been highlighted in Figure 3.1, below:

Figure 3.1 Adapted version of Freeman’s generic stakeholder view of a very large organisation

In this slightly simplified model we are bringing together unions and trade associations while customer advocate groups, political groups and activist groups as one group labelled ‘pr essure groups’. We’v e also added a key categor y that was missing befor e: the media. When we start building our stakeholder landscape in detail those distinct categories will emerge again as and when relevant, so they are not lost from view by relabelling them.

1.1.1 A CLOSER LOOK AT STAKEHOLDER CATEGORIES

No w let’s take a look at each of those categories in order to understand a bit mor e about them.

Owners Organisations can be owned in many different ways, ranging from venture capitalists to entrepreneurs to co-operatives. Businesses can have shareholders with formal voting rights.

Financial Community the financial community takes an interest in organisations that have an impact on the local, national and global economy.

Customers come in different guises too. Charities have recipients or beneficiaries; retail

has consumers, hospitality has guests, religious establishments have worshippers, schools have pupils and parents, businesses can have franchisees, resellers, buyers, internal customers and so forth.

Competitors Compiling a list of direct competitors is relatively straightforward because organisations will know who they are. We also need to think about what instead of who is competing with our objectives, such as a different project elsewhere in the organisation or new legislation regulating the sale of a product group or the qualifications needed to provide a service. Such legislation is competing with organisational objectives and the success of the organisation as a whole and leads to stakeholders such as regulators and legislative powers.

Suppliers In this category we need to list anyone and anything supplying our organisation with the components of our product or service. ftis can range from raw materials to end- products or to services that we outsource such as the engineers who install and service the boilers we make.

Pressure Groups is a broad category that can be split into many sub-categories according to need. Pressure groups can be loosely organised collectives of variable size that spring up in response to an event such as protests, or be long-established and highly organised and structured organisations such as political parties. Some exist while an issue is alive and disappear again when it is addressed, while others have established themselves over generations. Pressure groups are not necessarily democratic organisations and are by virtue of their nature biased in their views.

Unions and Trade Associations can be very niche and small while others are very large and more generic, often as a result of organisations merging over time. Some have political affiliations and others don’t. Some collaborate with other unions or bodies on specific issues and others have more formal ties with each other.

Government ftink of parish and municipal councils and townships all the way to the European Union and the United Nations.

Category Stakeholder(s)

4. Competitors

Named competitors Alternatives to your product or service (sectors)

5. Suppliers

Current Past Potential

6. Pressure groups

Categories:

• Environmental
• Cultural, religious or ethnic
• Cause-related i.e. consumer rights, incidents, projects
• User groups
• Interest groups
• Political groups Local, national, international Internal or external to the organisation

7. Unions and Trade Associations

National/international Specific to professional groups

8. Government

Local National International

9. Employees

Employment status Organisational tier/seniority Professional or vocational group Location Department

10. Media

Traditional Digital

Table 3.2 Universal stakeholder list

All categories can be thought of in terms of local, national or international stakeholders. How does this change the look of your generic stakeholder map?

1.1.2 BASIC STAKEHOLDER SEGMENTATION

Now that we have our universal list with our stakeholders organised into high-level categories, our next step is to consider the stakeholders we have identified so far in two different ways:

1. Internal versus external stakeholders
2. Primary or secondary stakeholders

The first way we can segment the generic view of stakeholders is by considering where they are in relation to the organisation: are they internal or external stakeholders? Employment status is not the only discerning factor for a stakeholder to be considered an internal one. Internal stakeholders can be on the payroll, but we should also include volunteers, trustees and donors; unpaid board members etc. in this category. Some but not all of these will receive a form of remuneration and all are considered to be internal stakeholders.

A second way to segment stakeholders is by considering them as either primary or secondary stakeholders. The difference is in the level of interest in the organisation: primary stakeholders have a direct interest in the activities and objectives of the organisation and secondary stakeholders have an indirect interest. Primary stakeholders are directly affected by the success of the organisation, for example being paid their salary, receiving goods and services or getting more orders from the organisation. Secondary stakeholders also have an interest in the organisation, and this can be an active interest too, but they or their own organisation are/is not directly affected by the organisation and its activities.

the way of considering stakeholders can be very helpful when an urgent need crops up and time is in limited supply, because we already know who our primary stakeholders are.

1.2.1 SENIOR MANAGEMENT AND LEADERSHIP

the perspective of senior leaders and managers – that would be the CEO and executive team and their ‘number 1s’- takes in the organisation as a whole and the wide context in which it operates. their interest in stakeholders is a highly strategic one on behalf of the organisation as a whole with a view to supporting decision making, identifying opportunities, meeting organisational needs, reducing and managing reputational risk and gaining, maintaining or increasing competitive advantage.

th is h a s a b ea r i n g i n ho w d iff er e n t s t a k eh o l d er ca t eg o r i es ar e c o n s i d er e d i n t e r ms o f importance, and what or who belongs in each category. For example, a competitor to Ford can be another car manufacturer but also alternative means of transport. A strategic outlook on any organisation requires that its senior team understands the wider context of the organisation so that it can anticipate that a change in tax laws can lead to more people taking the train to work.

Our Freeman-inspired segmented list may look something like this from a senior leadership perspective:

Category Stakeholder examples

1. Owners
   • CEO and leadership team
   • Shareholders, including pension funds
2. Customers
   • Consumers/end-users/beneficiaries
   • Business-to-Business (B2B)
   • Resellers
3. Financial Community

Individual or institutional analysts, (potential) investors and lenders National banks

4. Competitors

Named competitors Alternatives to product or service or even sector Regulation and legislation Consortia

5. Suppliers Past, current or potential partners
6. Pressure groups/activists

Internal, local, national, international Structured or informal Occasional or permanent

7. Unions and Trade Associations National/international Specific to professional group(s)

Category Stakeholder examples

8. Government

Regulators:

• Competition and markets
• Financial conduct and reporting
• Health and safety authorities
• Environment agencies Regulators specific to the organisation i.e. food standards, charity commissions, pharmaceutical, security, oil and gas etc.

9. Employees

Professional groups Location Department

10. Media

Trade media Traditional and social

Table 3.3 Senior leadership stakeholder list

‘Ownership’ is considered in both a literal and ethical sense b y senior leadership. Someone or something owns the organisation. Ownership also implies being accountable for achieving objectives and accepting the consequences if these are not realised. As highlighted in the previous chapter stakeholders should be considered as local, national and international level a s appropriate.

6. Pressure groups/ activists

Internal or external Local, national, international Categories:

• Environmental
• Cultural, religious or ethnic
• Cause-related i.e. consumer rights, incidents, projects
• User groups

Category Stakeholder examples

7. Unions andTrade Associations

Specific to professional group(s) impacted by/impacting on project

8. Government Local, national or international
9. Employees

Impact by project:

• High, Medium, Low, None Impact on project:
• High, Medium, Low, None

10. Media

Internal External

Table 3.4 Project Management stakeholder list

Project stakeholders can be internal or external to the organisation, including those that are internal to the project itself. ftink about multi-disciplinary teams that bring in specialist consultants from outside the organisation, or projects run by two or more partners.

1.2.3 HUMAN RESOURCES AND ORGANISATIONAL DEVELOPMENT

Considering stakeholders from the perspective of organisational and employee development takes a look at the organisation as a whole from the inside out:

Category Stakeholder examples

1. Owner(s) of staff or organisational need

CEO and executive team Shareholders Employees

2. Customers: internal and external
   • Front line staff and volunteers
   • Management including senior leadership
   • Buyers/beneficiaries of organisation’s products or services
3. Financial Community

Dependent on impact of organisational and staff performance and real or perceived organisational assets

4. Competitors

Alternative employers Alternatives options to employment

5. Suppliers

Job Centre Recruitment Agencies Colleges, Universities, Training Organisations Specialist consultancies, i.e. coaching, leadership development, outplacement bureaux, data providers Solicitors and legal advice

1.2.4 MARKETING, COMMUNICATIONS AND PUBLIC RELATIONS

Marketing, Communications and PR can be seen as the translators in an organisation: their role is to put out messages in such a way that they are received as intended. They also provide the organisation with market, product and competitor intelligence that is gathered methodically to ensure maximum value. To perform these tasks effectively, these functions need to scan and listen to their stakeholders continuously to know how and when to send messages into the world, and what these messages need to be about:

Category Stakeholder(s)

1. Owners

CEO Shareholders Employees

2. Customers

Consumers/end-users and beneficiaries Resellers Internal: Project/programme managers; Senior leaders and management; Human Resources External media

3. FinancialCommunity

Analysts Potential investors and lenders

4. Competitors

Direct competitors of organisation’s products/services Alternatives to the organisation’s product or service

5. Suppliers (^) Specialist consultants, i.e. researchers, data providers
6. Pressure groups/ activists

Categories: Environmental; Cultural, religious or ethnic; Cause- related i.e. consumer rights; User groups Business consortia

7. Unions and Trade Associations

Professional bodies, regulators and unions governing the marketing, communications and PR profession Consumer associations

8. Government

Regulators:

• Advertising standards
• Competition and markets

9. Employees (^) By professional groups; location;^ •^ Information and data^ protection department
10. Media

External local, national and international media Channels: print, broadcast, advertising etc.

Table 3.6 Marketing, Communications and PR stakeholder list

Not every organisation has the benefit of a dedicated PR function or a marketing and communications team. ftat does not mean the function does not exist for those organisations, because the job of understanding and communicating with stakeholders still needs to be done to support the organisation in achieving its objectives. Reliable competitor, customer and market data is key to organisational decision making. Organisations need this information whether a dedicated function exists or not.

1.2.5 CUSTOMER SERVICES AND SALES

The customer service and sales focus is on understanding and meeting customer needs. As the belo w table sho ws, ‘customer’ can mean many things to this function:

Category Stakeholder examples

1. Owners
   • CEO
   • Shareholders
2. Customers

Domestic and international:

• B2B and B2C
• Suppliers
• Distributors and resellers; Consortia

Internal customers:

• Senior leadership and management
• Project managers
• Research and Development

3. FinancialCommunity

Analysts Investors and lenders

Exceeding customer expectation is highly desirable for this function because of its proven effect on customer loyalty, spend and organisational reputationxiii. To achieve this, customer ser vice and sales teams need to hav e a deep, detailed understanding of the organisation’s customer base, whether this is made up of consumers, recipients of a charity’s ser vice or international commercial buyers. ftey will develop the closest relationships with customers of any function and be the interface with and sometimes literally the face of the organisation as far as customers are concerned.

1.3 GETTING SPECIFIC

So far we have been generic about stakeholders to set the scene, and used different functional lenses to think about stakeholders from the various angles organisations need to approach them. Now we need to get as specific as possible about stakeholders when we draw up our lists of categorised stakeholders.

Here is a simplified example of a populated stakeholder view for aboard games café and shop in downtown St Louis:

Category Stakeholder examples

1. Owners • Ella and Fred Miller
2. Customers
   • Regular visitors to café
   • Passing trade (café and shop)
   • Online purchasers
3. FinancialCommunity Bank

4. Competitors

Other games retailers in St Louis:

• Department stores
• Independent games retailers Online games retailers, Amazon, eBay Bars and cafés in the area Alternative ways to socialise: Clubs, cinemas, events

5. Suppliers

Games suppliers Catering suppliers HR and Payroll suppliers Retail

6. Pressure groups/ activists^ hard and software Consumer rights groups
7. Unions and Trade Associations

Retail Hospitality

Category Stakeholder examples

8. Government

St Louis Department of Planning Inland Revenue Service

9. Employees^ Games coaches staff^ Café
10. Media

Local and national newspapers:

• St Louis Post Dispatch
• The New York Times Broadcast media:
• Nine Network; KFTK-FM Table 3.8 Board Game Cafe stakeholder list^ Social Media: Facebook,^ Twitter