- External vs. Internal Stakeholders Part 1
- Challenges of Internal Stakeholder Management Part 2
- Handling Common Internal Stakeholder Issues Part 3
- Internal Stakeholder Management Best Practices Part 4
External vs. Internal Stakeholders
Stakeholders are people or entities who are influenced by or can be influenced by the actions of a business. They are usually in two categories: internal and external. External stakeholders are individuals or groups who are outside of the company that is still impacted by the decisions and performance of the organization. These can include suppliers, customers, competitors, governmental agencies, and society as a whole. These groups hold a lot of weight concerning how the organization is seen and heard by the public. However, internal stakeholders have a broad influence that affects the culture and voice of the company before messages or products even reach the public at large.
Internal stakeholders include everyone inside of the company like employees, owners, the board of directors, managers and investors. These individuals are also known as primary stakeholders and know all the ins and outs of the profitability, performance, and significant decisions that will eventually reach the external stakeholders who are responsible for the company’s overall performance.
The Challenges of Internal Stakeholder Management
Each internal stakeholder has a different influence and role within the company, which causes each to have various interactions with each other. Additionally, because each has a purpose, these individuals have to manage each other strategically.
These are individuals who have invested their capital in the company. They will likely have a lot of interaction with owners and eventually the selected board of directors. The challenge with this group is that they have to be kept engaged with the goings-on of the company. Their cultivation does not stop once they sign the check, so it is critical for owners to continue to seek their guidance and involve them in the future of the company.
Board of Directors
The board of directors are the gatekeepers of the company, and have numerous duties related to fiduciary responsibility, overseeing the overall mission, setting policy, and appointing key executives. This is another group managers and owners have to work to keep engaged. However, they also have to potentially deal with members who may want to jump into day-to-day activities that should be handled by staff.
This group is responsible for handling a lot of the day-to-day operations of the company and overseeing various departments. Owners and executives have the challenge of helping them work through multiple personnel and planning issues they face as department heads.
Even more so than managers, this group is in the trenches with daily business operations, and work directly with managers. According to the National Business Research Institute, the top four challenges employees face in the workplace are a lack of communication, unfair pay, job security, and under-appreciation. These are challenges managers and owners have to address.
It is imperative that business leaders assess the unique needs of each group and that challenges are well-managed.
Many management issues, regardless of the group involved, are related to a lack of communication and inefficient processes. There has to be a plan for engaging and retaining investors, meeting with the board of directors has to address the most critical issues that relate to them, and managers may need access to training that optimizes their impact with the employees they manage. A disruption in any of this makes it less likely the company as a whole will continue to be productive and in a position to strengthen their reputation with external stakeholders. It is vital that everyone is on the same page.
Handling Common Internal Stakeholder Issues
As stated above, because each group has a different role in the company, they also have unique challenges that have to be addressed to move forward.
Keep Investors Engaged
One of the most problematic issues concerning investors who have committed to the company through funding is keeping them engaged enough to do it again at a higher level. To manage their engagement level requires a post-close retention and engagement plan. It is vital that owners make an effort to communicate with investors at least quarterly and share successes and challenges. The last thing an investor wants is to be surprised, so it is up to business owners to keep them informed as much as possible and seek their advice when needed.
Use Board Meetings to Create Transparency
Board meetings are essential to keeping board members informed, and helping them to feel confident about the trajectory of the company. Business Insider listed a couple of things owners can do to make the most of the time with them. Meetings should be scheduled as far in advance as possible, and a working agenda should be sent their way a couple of weeks before to get their input. This allows board members to speak up about any issues, concerns, or questions they have about any proposed changes or performance issues. This could enable owners to have any needed conversations with members before the meeting to make sure everyone is on the same page and that they address the most critical issues with everyone there.
Manage Managers by Seeing Them in Action
Managers will face a lot of complicated situations that owners and executives might never see. To see their needs and get a feel for problems that could come up, it is critical for owners to sit back and watch. Watching managers give feedback, give a job interview, or sitting in on team meetings can help owners become aware of challenges their managers might be facing. So, owners will have context on how to improve managerial performance when they are approached by them with challenges. It is difficult to help when someone is unaware of the background; therefore, it is vital for owners to get into the weeds a little bit to manage the managers effectively.
Help Managers Meet the Needs of Employees
While board members and investors can pick and choose who they want to interact with and how they want to be involved with the company, employees have the least bit of leeway in how they decide to do this. The key to ensuring their success is to empower managers to create an environment where employees are satisfied. According to research conducted by the University of Warwick, employees are 12 percent more productive when they are happy. A great way to manage this group is encouraging managers to survey their employees and track their responses concerning job satisfaction. A failure to properly maintain this group will increase turnover and in turn, make an increase in productivity unlikely.
Internal Stakeholder Management Best Practices
Always Allow Time for Questions in Meetings
Whether it is with the board, managers, or employees, it is critical always to allow time for questions and suggestions. Because business leaders can have a lot to cover in meetings, it is easy for this to get left by the wayside, but a Q&A with all stakeholders is necessary for effective management. Questions help leaders get to the bottom of concerns and directly address them.
A board member may have feedback on how the CEO is handling a merger or high turnover in a particular department. The only want to manage these issues is to catch them before they turn into unmanageable problems. Leaders should conduct quarterly surveys with all internal stakeholders to see what they can improve on or discover problem areas individuals may not feel comfortable talking about publically.
Become an Expert on Conflict Resolution
Being a business owner, leader, manager, or employee in the modern workplace requires an understanding of conflict resolution. Each internal stakeholder will come up against conflict. One board member may be a little too involved in day-to-day activities, or a manager and employee performance appraisal did not go over well. Managing these issues becomes easier when parties are well-versed in effective conflict resolution practices. There is always a professional way to handle touchy situations, and some training in this area could benefit everyone and put the whole team on the same page.
Managing different groups within a company can be challenging, but with the right planning and strategy and an end goal of optimal productivity, everyone can feel heard and supported to fulfill their role in the company.
Effective collaboration with stakeholders is all about communicating effectively.
Status.net is a cloud solution for effective communication with stakeholders. It brings a more light-hearted tone to messaging making it easily digestible, and makes it easy for teams to provide updates and receive feedback regularly.
How to use Status Platform for status updates:
- Easily implement regular status updates by creating a status feed for your team and inviting stakeholders as observers.
- Peace of mind: No one forgets to fill in their status updates because Status Platform sends automated reminders according to the recurrence schedule you chose.
- Receive guidance and feedback from stakeholders:
Each status update has a separate section for comments, which is used by stakeholders to clarify information and provide guidance and feedback.
- Optionally, enrich reports with the latest updates automatically added from web apps your team uses (such as project management tools, version control systems, support systems, financial applications, CRM, etc.) by connecting these apps to your status feed.
- Spend less time on meetings by making them more productive because everyone is on the same page at all times.
- Use status updates for future reference and decrease time and efforts spent on monthly, quarterly, and yearly reporting thanks to powerful filtering and export features.
- Sharing: Status updates can be either
— exported to files and printed, or sent by email;
— shared with manager online; or
— shared online as company-wide or team-wide status reports, i.e., all team members share their progress with each other.
How to configure status updates:
- Create a “Status Report” applet — customize our preset forms or easily create a new form in minutes.
- Setup reminders if you want your team members to receive automatic reminders when their reports are due.
- Configure who will submit reports by choosing the “Participants” tab.
Step 2: Users will click the “Open Submission Form” button to fill in and submit the report.
Data such as the report type, date and name will be added automatically.
As soon as a new status report is added, participants with “View” rights can view it in real time.
- Set the status applet as “Team-wide” if you want all team members to view each other’s status reports.
- Alternatively, you can make every participant to view his/her own reports only. Manager/stakeholders will view all reports.
- Add, remove, and assign new team members at any time.
As soon as a new status update is added, participants with “View” rights can view it in real time when they log in to their accounts. They will also automatically receive emails with the full text of status updates.