How do businesses identify their key stakeholders?

Businesses identify their key stakeholders by analysing their influence, interest, power, and potential impact on the organisation's objectives.

To identify key stakeholders, businesses often start by listing all potential stakeholders. This could include anyone who has an interest in the business or could be affected by its operations. This list might include employees, customers, suppliers, shareholders, government agencies, community groups, and others.

Once a list of potential stakeholders is compiled, businesses then need to analyse each stakeholder's level of interest and influence. Interest refers to how much the stakeholder cares about the business's actions, decisions, and goals. Influence, on the other hand, refers to the power a stakeholder has to facilitate or impede the achievement of an organisation's objectives.

A common tool used for this analysis is the Power-Interest Grid, which helps businesses visualise their stakeholders based on their level of interest and power. This grid helps businesses prioritise their stakeholders, identifying those who have both high interest and high power as key stakeholders.

Another important factor to consider is the potential impact of each stakeholder on the business. This involves assessing the potential risks and opportunities each stakeholder presents. For example, a key supplier might have a high potential impact if they control a scarce resource, while a local community group might have a lower potential impact.

In addition, businesses may also consider the expectations and needs of each stakeholder. This can be done through stakeholder engagement activities such as surveys, interviews, and meetings. Understanding stakeholder expectations and needs can help businesses develop strategies to manage their relationships with key stakeholders effectively.

In summary, identifying key stakeholders involves a thorough analysis of each stakeholder's interest, influence, potential impact, and expectations. This process helps businesses understand who they need to engage with and how to manage these relationships to achieve their objectives.