How to Manage Internal and External stakeholders
A company is only as successful as its ability to manage and appease its stakeholders. To keep everyone happy and on the same page, a company must have excellent communication and organizational skills. Furthermore, knowing the difference between internal and external stakeholders is essential, as they each present different challenges.
Let’s look at this case study on why it’s essential to manage both internal and external stakeholders:
Tom is the manager of a software development team. His team is responsible for developing a new software application for the company’s sales force. The project is behind schedule and over budget. Tom’s boss, the Vice President of Sales, is putting pressure on him to complete the project as soon as possible. Meanwhile, the sales team is getting impatient because they desperately need the new software to do their jobs. To make matters worse, one of Tom’s team members just quit, and he is having difficulty finding a replacement.
As you can see from this example, Tom has a lot of stakeholders to manage. He has to keep his boss happy by meeting the project deadlines, but he also has to keep his team happy by providing them with the resources they need to do their jobs. Furthermore, he has to keep the sales team happy by delivering the new software on time.
Tom must have excellent communication and organizational skills to manage all upstream and downstream stakeholders successfully. He must also be able to understand the needs of each stakeholder and find a way to balance them. For example, he may need to put more pressure on his team to meet the project deadlines, but he must also ensure they have the resources they need to do their jobs.
There will be internal and external stakeholders in both upstream and downstream stakeholders. It is essential to manage both to be successful. Before diving into managing internal and external stakeholders, let’s first look at the difference between the two.
Internal stakeholders are individuals or groups directly involved in the company’s day-to-day operations. They have a direct interest in the success or failure of the company. Examples of internal stakeholders include Employees, Management, Owners etc.
External stakeholders are individuals or groups who are not directly involved in the company’s day-to-day operations. They have an indirect interest in the success or failure of the company. Examples of external stakeholders include Customers, Suppliers, Government etc.
Why should a manager care about Managing Stakeholders?
The answer is simple.
If a manager does not care about managing stakeholders, the company will have difficulty achieving its goals. Stakeholders can make or break a company. They have the power to influence the company’s decision-making process and can provide essential resources that the company needs to succeed.
A company cannot achieve its goals without the support of its stakeholders. Therefore, it is essential for managers to know how to effectively manage both internal and external stakeholders.
What are some common challenges that arise when managing stakeholders?
Several common challenges can arise when managing stakeholders. These include:
1. Misaligned Goals:
One of the most common challenges when managing stakeholders is misaligned goals. This happens when the goals of the company and the stakeholders are not aligned. This can lead to conflict and make achieving the company’s goals difficult. For example, if a company’s goal is to increase profits, but one of its stakeholders’ goals is to protect the environment, there will be a conflict.
2. Lack of Communication:
Another common challenge that can arise when managing stakeholders is a lack of communication. If you don’t communicate with your stakeholders regularly, they may feel left out and become unhappy. This can lead to them withdrawing their support for the company.
3. Unreasonable Expectations:
Another common challenge that can arise when managing stakeholders is unreasonable expectations. If you set unrealistic expectations for your stakeholders, they will likely be disappointed and may become disengaged. Setting realistic expectations from the start is essential to avoid this problem.
4. Conflict:
Finally, conflict is another common challenge that can arise when managing stakeholders. Resolving the conflict and keeping everyone happy can be difficult if your stakeholders have conflicting goals.
How To Manage Internal and External Stakeholders?
Now that we’ve looked at some challenges that can arise when managing stakeholders, let’s look at how to effectively manage internal and external stakeholders.
1. Communication:
One of the most important things you can do to manage your stakeholders effectively is to communicate with them regularly. Keep them updated on what’s happening in the company and inform them about any changes that might affect them. Furthermore, make sure you’re open to hearing their concerns and feedback.
2. Relationship Building:
Another critical way to manage your stakeholders effectively is to build relationships with them. Get to know them and their needs. This will make it easier to understand how best to meet their needs and keep them happy. You should also look for ways to build trust with your stakeholders. For example, you can keep your promises and be transparent in your dealings with them.
3. Expectations:
It’s essential to set clear expectations with your stakeholders from the start. Let them know what you need from them and what they can expect from you. This will help to avoid any misunderstandings down the road. For example, if you need a stakeholder’s help to achieve a goal, ensure they understand what is expected of them.
4. Feedback:
Make sure you’re regularly collecting feedback from your stakeholders. This will help you to gauge how well you’re meeting their needs and identify any areas that need improvement. You should also be open to feedback from your stakeholders about your own performance.
5. Flexibility:
Last but not least, you need to be flexible in your approach to managing your stakeholders. Every stakeholder is different and will require a different approach. Be prepared to adjust your strategy as needed to ensure that you’re meeting the needs of all your stakeholders.
Communication is vital when it comes to managing internal and external stakeholders. If you keep your stakeholders informed and listen to their concerns, you’ll be well on keeping them happy and achieving your company’s goals.
While there are several common challenges that can arise when managing stakeholders, there are also many ways to overcome these challenges. Communicating regularly, building relationships, and being flexible can effectively manage your stakeholders and achieve your company’s goals.
It’s important to remember that every stakeholder is different and will require a different approach. So, don’t be afraid to adjust your strategy as needed. With some planning and effort, you can successfully manage your stakeholders and achieve success for your company.
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