What is a stakeholder in simple terms?

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Gain a solid understanding of stakeholders and learn how to engage them

Understand who are the stakeholders of your business. Source: Canva.

Have you been hearing the term “stakeholder” frequently and want to ensure you have a solid understanding of it?

If you want to gain a solid understanding of stakeholders, it’s important to learn how to identify them. You should also learn what actions to take once you’ve identified them. 

So this brief guide will provide you with a clear definition of stakeholders and the necessary steps to effectively identify and engage with them.

Moreover, stakeholders play a crucial role in almost any organization or project. While you may have some familiarity with the concept, it’s worth delving deeper to gain a comprehensive understanding. 

To start, let’s explore a basic definition of stakeholders.

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An Overview of Stakeholders in simple terms: Definition and Examples

The term stakeholder defines individuals or groups who are impacted, either positively or negatively, by an organization, project, policy, or initiative. 

Further, these stakeholders can be internal or external. It’s important to include people who represent particular interests or should have a say in decisions.

Not all stakeholders are equal. Some may have a greater impact on the success or failure of a project than others. 

Some stakeholders may play a peripheral role, while others are more central to the project’s success.

Despite the widespread use of the term in large businesses, government organizations, and large-scale project management, stakeholders exist in projects and organizations of all sizes.

So, to gain a comprehensive understanding of stakeholders, it’s necessary to explore examples that illustrate their role in various contexts.

Exploring Various Stakeholder Groups

Each stakeholder plays a different role in your business. Source: Canva.

Stakeholders are often part of larger groups that share similar characteristics or interests in a project. Here are some common examples of stakeholder groups:

  • Owners
  • Executives
  • Employees
  • Internal team for the project
  • Partners
  • Shareholders
  • Creditors
  • Suppliers
  • Wholesale resellers
  • Referral partners & affiliates
  • Customers
  • Users
  • Industry groups
  • Unions
  • Media organizations
  • Regulators
  • Government
  • Community groups
  • Local public

It’s also useful to divide stakeholders into groups. You can base this division on factors such as internal versus external, high or low income, individuals versus groups, senior versus junior level, and so on. 

By doing this, it becomes easier to manage the needs and expectations of different stakeholder groups.

5 Effective Simple Ways to Define Your Stakeholders

Defining stakeholders is a crucial task when it comes to stakeholder management and engagement. 

So here are five effective methods you can use to identify stakeholders who may be impacted by or have an impact on your project:

  1. Look at your organizational chart and list out any relevant roles or individuals.
  2. Review previous projects and the groups or people they affected.
  3. Brainstorm with pen and paper or sticky notes, capturing any person or group that comes to mind and putting them in order later.
  4. Use a mind-mapping tool like to visualize and organize your ideas.
  5. Research different roles and groups that are specific to your industry or project, in addition to generic stakeholder examples.

Note that defining your stakeholders requires careful consideration of your project, the details, and people involved, and the likely outcomes. 

So, take the time to do it properly and ensure that you have a comprehensive understanding of what the term stakeholder means and how to engage them.

Ways to Utilize Your Stakeholder List

See how you can use your stakeholders. Source: Canva.

There are various methods to utilize your stakeholder list depending on your project or organizational needs. Some of these methods include the following.

Conducting a stakeholder management plan

After defining your stakeholder terms, it is important to create a clear and simple plan to manage them. This plan should include information about your stakeholders, project or organization, and resources. 

It should clearly state your objectives and lay out the strategies, tactics, and messages required for each stakeholder group. 

Finally, it should include details on how to evaluate your efforts and measure the success of your plan.

Increasing stakeholder engagement

Stakeholder engagement is a valuable resource for projects and organizations. Engaged stakeholders get the opportunity to provide their perspectives and expertise, and help you innovate. 

With the extra information coming in from your stakeholders, you’ll make better decisions and create better products, services, or policies. 

Stakeholder engagement can also help with risk management since you’ll often identify risks earlier on in the process. 

Finally, high levels of stakeholder engagement go hand in hand with increased transparency and accountability, leading to an increase in trust.

Conducting public consultation

Public consultation seeks to get feedback and perspectives from the public. This usually happens at the proposal/draft phase of a project or policy to allow the public to help shape decisions. 

Consequently, the very first step of public consultation is stakeholder identification. The public is just another way of saying “stakeholders”. 

However, in this case, it usually means people and organizations the decision affect have an influence on the decision, know about the issue, or have an interest in the issue.

Running stakeholder analysis

Stakeholder analysis can give you a more complete picture of the stakeholder landscape. It helps you identify the issues your stakeholders care about.

Furthermore, this will inform your stakeholder management and engagement plans, where you focus your efforts and the key messages you choose to communicate.

Importance of a Stakeholder Management System

It’s not enough to just define your stakeholders and their terms. You need a solid system in place to manage them effectively. 

So setting up a stakeholder management system will help you keep everything in one place. Ensure that you and your team stay on track with your plans and communication.

Simply Stakeholders offers stakeholder engagement software with powerful and user-friendly tools that will help you manage and engage your stakeholders. 

The Bottom Line

It is important for anyone involved in running or managing an organization to be aware of the various stakeholders and their interests.

By engaging with stakeholders, organizations can build trust, strengthen relationships, and make informed decisions.

In simple terms, stakeholders play a critical role in shaping the success and impact of any organization. Ignoring their needs and interests can have serious consequences.

Now that you know what a stakeholder is, you’re one step closer to being a successful business owner. And if you’re not a business owner yet, you can think about opening one.

Check the following content to see which businesses are the most profitable to open in 2023.

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About the author  /  Danilo Pereira

Danilo is a copywriter with a passion for learning. Deeply interested in philosophy, politics and arts.

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