Stakeholders in business include investors, staff, suppliers, and customers. They are one of the keys to the company's success because they help the business move and provide financial support. Therefore communication with stakeholders must be smooth.
Lack of stakeholder engagement and communication is behind project failure. According to PMI, 90% of PMs (Project Managers) spend time communicating with stakeholders. Regularly exchanging information will grow trust, enhance cooperation and mitigate potential conflict and risk. But what form of communication?
According to a study in the Journal of Business Ethics, there are four essential factors when dealing with stakeholders: timeliness, valence, wealth, and actuality.
The definition of stakeholders
Before learning about stakeholder communication, let's find out who the stakeholders are. According to Simply Business, stakeholders are people or groups interested in a project or business. They can influence and be affected by projects or businesses.
The stakeholders can be both internal and external. Internal has a direct relationship with the project. They affect the timeline and outcome of the project. While external are indirectly connected. They can't change the project goals, but the results still affect them.
- Internal: business owners, management, team, and clients
- External: consumers, suppliers, governments, etc.
What is stakeholder communication?
Stakeholder communication is the process of exchanging information between companies and their stakeholders. The media used to communicate include:
- Routine meetings via video call or in-person
- Product/project presentations
- Email progress Project progress
- reports (monthly and yearly)
- Informal meetings (team dinners or outings)
- Social media
The factors that affect stakeholder communication
Communication helps all parties involved understand the plans and goals of stakeholders. However, there are five factors that influence this communication.
1. The importance of a project
The project's importance requires sustainable communication to ensure it stays on track. The PM needs to bring a project plan or report as material when explaining the project. Everything in the document can affect the interests and communication needs.
Determine how often the communication occurs. The team may prefer to communicate daily, while stakeholders may like it when the meeting occurs.
The PM also needs to know the communication media that stakeholders often use. Do they like video calls or respond to messages via email? The best media makes everyone comfortable communicating.
Consider stakeholder location when communicating. It is intended that communication is carried out during working hours. International projects may require a communication schedule to ensure everything is available.
The content you use when communicating with stakeholders is also essential. For example, stakeholders are more interested in detailed reports, while management prefers presentations.
The benefits of stakeholder communication
Effective communication will take your relationship with stakeholders up a notch. A PM must ensure that they receive information that is relevant to their needs. Here are some benefits when communication runs smoothly:
1. A better understanding of project goals
Good communication with stakeholders will build an understanding of your project goals. For example, communication with investors helps you attract the funding you need.
2. Boosted trust
Let stakeholders know you care about their perspective, which can boost their trust. Good communication is made when stakeholders and PMs trust each other.
3. Minimising project risk
Stakeholders come from various backgrounds. This is a plus point because they can identify project risks and suggest changes. Early identification helps prevent the project from running into these risks.
4. Better decision-making
Stakeholders have different perspectives on your project, and communication is the bridge. They can use different backgrounds from stakeholders to provide input regarding the project. Their input can help you make a better decision.
5. Cost saving
The convenience of communication will allow your project to receive funding quickly. Clear communication is also crucial to understanding project requirements and reducing the potential for failure.
The Plan & Strategy
Then how to communicate better with stakeholders? What strategies can be implemented? Here are ten tested strategies according to the Forbes Coaches Council.
1. Create an agreed stakeholder map for the project
Before starting a project, the PM should have a stakeholder map. This map will serve as a provision before a meeting with stakeholders. Share this map with them and let them revise whether they want more or less.
2. Stay transparent
Try to be transparent about all project parts to stakeholders. Honesty will bring ease to the project. The more honestly shared with stakeholders, the more information they have to complete their portion of the project. Transparency creates trust.
3. Updates based on context
Project updates depend on stakeholders, communication frequency, and context. For example, make a blog for written communication containing the main focus of stakeholders, project opportunities, and project success. And for visuals, infographics and presentations can be effective.
4. Update progress through short videos
According to Robin Blakely, Creative Center of America, a short video is perfect for telling project updates. When a project wants to be heard and seen, you have to show it. It doesn't need to be like a Hollywood movie, but make it meaningful and short in duration.
5. Consistently schedule meaningful updates
Providing consistent updates will make it easier for stakeholders to understand progress. This process shows that you and your stakeholders support each other.
6. Ask how stakeholders want to be included
Not all stakeholders want daily or weekly updates. Some of them prefer meaningful updates. Discuss with stakeholders their preferred method of staying updated with the project.
7. Strategy for each stakeholder
The stakeholder map also contains their strategy—plot people regarding the level of support and impact. Use graphics to simplify the design. Don't hesitate to ask directly about their project expectations.
8. Predictable rhythm communication
Predictable communication rhythm means stakeholders understand when they will communicate with you. They won't be guessing whether there is a virtual meeting or just a progress update. Ensuring stakeholders know the rhythm of communication will make them feel in the loop.
9. Diversified communication
Multiple communication channels keep stakeholders well-connected—consideration of information and interaction required after being received by stakeholders.
10. Documenting communications
Having all the logs of communications from each of the different stakeholders will make things easier for you. This communication log will assist in referring decisions to the project. Save all emails and chats from stakeholders so you can reread them.
Communicating with stakeholders is the first step to bringing a better project. Communication is one of the essential tasks in the entire project cycle. Projects that are well-planned on timelines, budgets, and risks, but have poor communication with stakeholders, will fail or barely survive. So make sure you set aside enough time and space to communicate with your stakeholders and make them feel valued.