Who among the following are the secondary stakeholders of an organization?

Every organisation has stakeholders, but the key focus is usually on those stakeholders who receive financial returns, such as investors and stockholders.

However, recent stakeholder theory suggests that greater success comes from taking into account the needs, concerns and views of all stakeholders, including those without a financial stake in the business.

What is a stakeholder?

A stakeholder is a person, group or organisation that is affected by and/or affects the operation of an organisation.

They could be an employee, an investor, a customer, a supplier or an outside organisation with an interest in the company’s success.

What is stakeholder analysis?

This is the process of analysing the influence that various stakeholders have on a business. It is carried out in order to understand their varying needs and expectations, and to ensure that businesses communicate at the right level to win stakeholder support for their organisational goals.

This kind of analysis should be carried out at project and departmental levels by managers, as well as at operational level.

What are primary and secondary stakeholders?

Primary stakeholders are those who are essential to the existence of the organisation, e.g. employees, customers, suppliers, shareholders and investors.

Secondary stakeholders are those who have an interest in the business and can affect its operation, usually from the outside, for example business partners, trade unions, inspectors/regulators, consumer/environmental groups, government and local councils, community groups, business premises owners.

Why should all stakeholders be taken into account?

Shareholders only own shares in a company, which can be sold, they don’t own the company itself, and yet they are often the first consideration when making major decisions.

If a company only takes account of the interests of stakeholders with a financial stake in the business, they risk alienating other stakeholders who can affect future success. Meeting the needs of all stakeholders will maximise business value.

How can an organisation manage the needs of all stakeholders?

First draw up a list of all stakeholders and list them under primary and secondary stakeholders, using the specific names of people and organisations. Map these out in a visual diagram and group them into sectors, for example: suppliers, customers or partners.

Next, use a power-interest grid to identify how much interest various stakeholders have in the business – and how much power they have over its operation. Those with high levels of power and interest will require the most engagement. Stakeholders with high power but low interest should be kept informed but not bombarded with detail. Those with high interest but little power should have occasional communication, and those with low interest and power will not require much of your time.

Understanding your stakeholders

To understand your stakeholders, you need to try to see the organisation from their point of view. This will help you understand their motivations, needs and concerns, and to work out what influences them. Do they represent an opportunity or a threat to your business?

A few questions to consider

Now you have a list that prioritises your stakeholders in order of power and interest, you can look at strategies to take the business forward. Think about issues such as:

• How to motivate your employees
• Improvements to products and services to keep your customers happy
• Ways to improve relationships with your suppliers
• Activities that could encourage co-operation from external stakeholders
• Policies that could damage relationships or help competitors
• How you can improve external opinions of your organisation

Draw up a list of actions with detail on cost, ease of implementation and how they might affect other stakeholders. It’s not always possible to keep everyone happy, but try to avoid trading off the interests of one group of stakeholders against another.

Communication is key

How you communicate with stakeholders will influence their feelings about the organisation – and it should not be one way. Engage with stakeholders through dialogue. Ask for feedback and act on it. Build trust, respect – and a better picture of their perspective, which will help with any conflict resolution.

Finally, be aware of change, both within an organisation and in the outside world. Revisit and review your stakeholder relationships regularly and be prepared to adapt to internal and external changes.

No project exists in a bubble. Regardless of the size of your project, its success and implementation will involve individuals or organizations. The Project Management Institute describes stakeholders as “individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected due to project execution or project completion.”

If you want to meet your project goals and objectives, you’ll need to know how to manage your relationships with your key stakeholders. Let’s talk about how you can understand your stakeholders and set yourself up for success.

Read more: Difference Between Owner & Manager

Types of Stakeholders

Primary and Secondary Stakeholders

A stakeholder’s level of investment in the results and outcomes of your project are going to depend on their interest in or level of importance to the project.

Primary stakeholders are the ones who receive the most impact from your project, positively or negatively. These can include your employees, customers, managers, suppliers, business partners, and more.

Secondary stakeholders are individuals and groups that you and your project don’t directly affect. They’re more difficult to identify compared to primary stakeholders. Project teams don’t always consider secondary stakeholders when planning, because they don’t normally affect project implementation and operations unless they actively involve themselves and become vocal about their positions. When that happens, their impact can be massive.

Examples of secondary stakeholders include governments, trade unions, advocacy groups, and others.

Direct and Indirect Stakeholders

An individual or organization can have the power to influence decisions that the project team will pursue. Direct stakeholders are involved in the team’s activities and can change the project’s direction. Your team, managers, product owners, and others are direct stakeholders.

Individuals or groups that care more about the outcome of your project — rather than its implementation — are indirect stakeholders. These include your customers and suppliers. They aren’t involved in your activities, but they have something at stake for how well (or poorly) you do.

Internal and External Stakeholders

Internal and external stakeholders are those within your organization and outside your organization, respectively.

Internal stakeholders include your board of directors, upper management, and other departments in your company that may influence your flow of resources (e.g., human resources, finance team, etc.).

Your local community, government, prospective clients, competitors, and suppliers, on the other hand, are your external stakeholders.

Read more: Top Reasons Why Your Project Costs More Than Originally Planned

How to Maintain Good Stakeholder Relationships

Identify and Understand Your Stakeholders

Technical requirements usually take priority when you’re preparing your project requirements. However, it’s essential to recognize that non-technical communication requirements can also affect your project massively.

Along the way, you’ll need to secure permits, approvals, finances, and others to implement your project. Failing to recognize the stakeholders behind these resources can cause bottlenecks, delays, or worse, project termination. Take the time to identify all the individuals and parties involved in your project as early as possible.

Align With Your Stakeholders

Your important stakeholders can affect your project’s success metrics. At the same time, each stakeholder may have their own definition of success.

After identifying key individuals and organizations, gather insight on what matters to them, their expectations, and how your project will affect them. Discuss concerns and reservations. Communicate the risks you’re facing and the rewards you’re anticipating. Level with them on what they can expect during production, and what support they can expect after production. Good communication will help you gain trust and lessen the possibility of misunderstandings, grudges, and avoidable obstacles.

Evaluate Stakeholders’ Influence and Importance

Prioritization is critical when it comes to all things project management. Stakeholder management is no exception.

Earlier, we discussed what influence and importance mean in relation to your stakeholders. The former is your stakeholder’s ability to affect your team’s day-to-day activities, and the latter is your stakeholder’s level of investment in your project’s results.

You can assign each stakeholder’s influence and importance with a “high,” “medium,” or “low” mark. These metrics can give you a good idea of who to prioritize, as well as help you evaluate change requests that will affect your project’s scope, time, and resources.

Build a Communication Plan

Internal and external stakeholders might prefer different ways of communicating. They can also have different expectations on their level of participation.

Make a plan on how you can accommodate their most important considerations. Identify how actively you need them to participate at every stage of your project, and make sure they’re aware and agreeable to this.

Align on the frequency, channel, and information they want to receive to ensure they are continually updated with your progress. Avoid overwhelming them with too much data. Simply focus on ensuring they have the info they want and need to avoid confusion and maintain clarity.

Once you have everything in place, share your communication plan with involved individuals and organizations. Documenting everyone’s responsibility for the project can aid in ensuring everyone holds up their end of the bargain.

Be in Touch With Your Stakeholders

Once you’ve ironed out a plan, it’s time to follow through with your commitments. Deliver reports and information on the dates you promised them, and include information gathering and report preparation in your task list and timeline.

Make your reports clear, concise, and relevant to each stakeholder you’re catering to. Acknowledge and address their concerns, and make sure they’re constantly updated and aligned regarding changes and important findings. Being true to your word will help you maintain and build trust with the people you work with. It’s also an excellent way to foster effective collaboration and keep things going smoothly despite hurdles.

Read more: Create Useful Project Status Reports: A Comprehensive Guide

Stakeholder Management Is Crucial

Stakeholder management is just as important as all the other aspects of project management. Aside from technical requirements, take time to recognize the non-technical communication requirements vital individuals and organizations may require.

Identify the stakeholders you’re answerable to as early as possible. And as you implement your project, ensure alignment and ample communication. Diligently managing your relationships will help you and your team achieve maximum project impact and success.

Recommended Project Management Software

If you’re interested in learning more about top rated project management software, the editors at Project-Management.com actively recommend the following:

1 Wrike

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Tackle complex projects with Wrike’s award-winning project management software. Break projects into simple steps, assign tasks to team members, and visualize progress with Gantt charts, Kanban boards, and calendars. Manage resource allocation and forecasting with software that’s easy to launch. Automation and AI features strip away time-consuming admin tasks so you can do the best work of your life. Streamline your practices, align your team, and ensure you hit deadlines and stay on budget.

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2 Rocketlane

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Rocketlane is purpose-built to run customer facing projects. It uniquely ties project management, document collaboration, and communication to help teams hit their project goals, accelerate time-to-value, and elevate the customer experience.

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