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Fundamental Keys to Building Relationships With Stakeholders

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Picture this: you’re at the end of a long consultation process. You have all the key people in the room, ready to vote on a decision that will let your project move forward. You call the vote and…three key stakeholders cast their vote against it. 

You’re in shock. You were so sure you had all the key people on board. But it’s clear now that somewhere along the way, you didn’t build the right relationships with stakeholders, and now your project is back to square one. 

Let’s take a look at the fundamental keys to building relationships with stakeholders and how to avoid this scenario in the future. 

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Identifying Stakeholders

Building Relationships With Stakeholders

If you want to create change or make a decision affecting people other than yourself, then you’ll end up interacting with stakeholders. Success in this arena means building relationships with them.

Stakeholders are people who have a ‘stake’ in the change you’re wanting to create. They could be funders, your boss, your employees, interested parties, or anyone who will be impacted by the project.

Why Is It Important to Build Relationships With Stakeholders?

A strong stakeholder relationship is important for many reasons. First, it allows organizations to better understand and meet their needs and expectations. This, in turn, can lead to increased satisfaction, loyalty, and support from stakeholders.

For example, when a company has a strong relationship with its suppliers, it is able to negotiate better terms and prices. Ultimately, this leads to cost savings and improved efficiency.

Building and enhancing stakeholder relationships can lead to increased transparency as well. When stakeholders trust an organization, they are more likely to be open and honest with the organization. As a result, there will be more effective communication and collaboration.

It’s important to note that relationship building with internal and external stakeholders is equally important. Internal stakeholders such as employees can be a valuable source of information and feedback on internal operations. External stakeholders such as customers and suppliers can provide valuable insights into industry trends and market conditions.

Benefits of Building Relationships With Stakeholders

Building relationships with stakeholders is an essential aspect of project management, stakeholder management and relationship management. Strong relationships bring a range of benefits to an organization. This includes improved project outcomes, increased collaboration, a better understanding of the market, and better stakeholder relationship management.

Most importantly, it means the decisions you agree on will be carried forward. For example, employees may appear to agree with their boss’s decision to boost productivity. But, their main reason for agreeing is that their boss is the one paying them. They haven’t bought into the decision on a deeper level. And so, as soon as the boss’s back is turned, they start checking their inbox every five minutes.

In this scenario, the decision was made without stakeholder buy-in. The relationship between the boss and employees wasn’t strong enough for them to make their true objections made. Therefore a genuine agreement wasn’t reached.

The outcome: there was no real execution of the decision.

On the flip side, when you have a strong stakeholder partnership, decisions are made with real participation. People will say which parts of the plan they think are unworkable. Then, a real solution can be reached that everyone truly supports.

Done in this way, the stakeholder relationship involves openness and trust. This leads to the stakeholders supporting and carrying out the agreed-upon plan.

Why Is It Important to Build Trust With Stakeholders?

Build trust with stakeholders

Building trust with stakeholders is a crucial aspect of effective stakeholder relationship management. Trust is the foundation upon which strong relationships are built. To achieve its goals and objectives, an organization must establish trust with its stakeholders.

Trust is key to effective stakeholder management as well. When stakeholders trust an organization, they are more likely to be supportive of its goals and objectives. This leads to increased stakeholder buy-in and support for projects and initiatives.

How Do You Build Trust With Your Stakeholders?

There are four fundamental tools for building trust with stakeholders.

The first one is affinity. Affinity can be characterised as a feeling of liking and interest toward another person. Building this is a key ingredient for trust. (It’s hard to trust people you don’t like.)

The second is shared reality. When you seek to build trust with someone, the first thing you want to check is whether you share the same views on key issues.

For example, when working on town policy, environmentalists and town planners will frequently clash. This is because they have a very different reality, and a different idea of what success looks like. 

Communication is the third tool for building trust. Without clear, effective communication, you can’t find out what someone else’s reality looks like, or build affinity with them. In our experience, good communication involves asking a lot of questions to clarify each stakeholder’s position. 

The final tool is understanding. When you have a shared understanding, all other tools become easier. Many times, stakeholders disagree because they don’t understand the other party’s point of view. They don’t know what the other person’s concerns are, and therefore they don’t put any thought into how these could be resolved. 

When you spend time communicating to build affinity, understanding, and a shared reality, then trust is the result. 

Examples of Building Relationships With Stakeholders

stakeholder relationships

There are many different ways that organizations can build and maintain strong relationships with their stakeholders.

Let’s take a look at a few examples of how to maintain relationships with stakeholders:

The most important aspect of building relationships with stakeholders: Regular communication

Regular communication, such as newsletters, email updates, or town hall meetings. This helps build trust and transparency and provides an opportunity for feedback.

Stakeholder engagement activities

Such as focus groups, surveys, or customer councils. This will help organizations tailor their communication to better meet those needs.

Community Outreach

Such as local events or volunteering. This helps organizations build goodwill and positive relationships with the community.

Listening and feedback

Actively listening to stakeholders gives place to important feedback. This is can be done through regular check-ins, suggestion boxes, or employee suggestion programs.

Collaboration

Such as joint ventures, partnerships, or co-creation initiatives. Collaborating with stakeholders to find mutually beneficial solutions can help build strong relationships.

Recognition and rewards

Recognizing stakeholders for their contributions build strong relationships. This can be done through certificates of appreciation, rewards programs, or public recognition.

Summary

You’ve just learned the keys to having good relationships with project stakeholders. This includes being able to create:

  • trust
  • cooperation
  • partnership

This is achieved by effective communication, taking the time to build understanding, and then agreeing on a shared objective. 

ABA has a flagship course on communication, which will allow you to practice this vital skill at a high level. This will enable you to create partnerships and cooperation, even with stakeholders who may appear misaligned with your goals at first. Here’s where to see more.

If you wish to learn more about building relationships with stakeholders, we suggest additional resources such as: Stakeholder Relationship Management: A Maturity Model for Organisational Implementation (lynda bourne, 2009); The Stakeholder Strategy: Profiting from Collaborative Business Relationships (ann svendsen, 1998); Project Stakeholder Management (anna lund jepsen, 2013); Practical Project Stakeholder Management: Methods, Tools and Templates for Comprehensive Stakeholder Management (emanuela giangregorio, 2017); Stakeholder Engagement: The Game Changer for Program Management (amy baugh, 2015); and Construction Stakeholder Management (2009)


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