Building and Maintaining Key Relationships
Strategic Management: A Stakeholder Approach (1984)
Freeman's work revolutionized the way we think about business management, arguing that for an organization to be successful, it must create value for all of its stakeholders, not just shareholders. His framework remains the gold standard for stakeholder analysis.
Stakeholder management is the process of identifying, analyzing, and engaging with the individuals, groups, or organizations that are impacted by or can impact your decisions and activities. Stakeholders can be internal (employees, managers) or external (customers, suppliers, government agencies, the community).
Effective stakeholder management is not simply about communication; it's a strategic function that requires a deep understanding of the political, social, and economic landscape. It involves a continuous cycle of identification, prioritization, engagement, and monitoring to ensure relationships remain positive and productive.
One of the most practical frameworks for stakeholder analysis, Mendelow's Matrix helps leaders categorize stakeholders based on their level of power (influence) and interest in the organization or project:
Significant influence but low interest. Keep them satisfied with outcomes but don't overload with information.
The most important stakeholders. High power and high interest. Require close management and full engagement.
Low power and low interest. Require minimal monitoring and communication.
High interest but low power. Keep informed of decisions and progress.
| Step | Action | Key Questions |
|---|---|---|
| 1. Identify | Map all stakeholders | Who is affected? Who can influence outcomes? |
| 2. Analyze | Assess power and interest | What are their goals, concerns, and expectations? |
| 3. Plan | Define engagement strategy | How should we communicate with each group? |
| 4. Engage | Execute the plan | Are we building trust and addressing concerns? |
| 5. Monitor | Review and adjust | Have stakeholder positions or interests changed? |
In today's interconnected world, no leader can afford to operate in a vacuum. Stakeholder management is crucial for building and maintaining the social license to operate. By effectively engaging with stakeholders, leaders can build trust, foster collaboration, and create a more resilient and successful organization. It enables leaders to anticipate and mitigate risks, identify new opportunities, and make better-informed decisions that create value for all parties involved.
Effective stakeholder management requires proactively identifying, understanding, and engaging with all individuals and groups who have a stake in your organization's success. Use Mendelow's Matrix to tailor your approach to each stakeholder's power and interest level.
