Why is Stakeholder Engagement Important?

by | Mar 23, 2023 | Strategic Planning

When you’re developing a new project or launching a new initiative, sometimes the last thing you want to think about is bringing in stakeholders. Engaging stakeholders requires time, planning, and a smart yet adaptable strategy. Doing it well is no easy feat. But when done thoughtfully, stakeholder engagement can be vital to the success of any endeavor.


So, why is stakeholder engagement so important?

Strategic stakeholder engagement is proven to increase an organization or project’s chance of success. For maximum benefit, it’s important to engage multiple types of stakeholders, such as sponsors, end users, communities, and internal and external partners.


Who Are Your Stakeholders?

The first step in successful stakeholder engagement is identifying your stakeholders. You’ll want to consider stakeholders in the following broad categories:

  • Sponsors: While we often think of sponsors as providing financial backing for a project, a sponsor can also bring equally valuable influence. For example, a project with internal executive support (an executive sponsor) is 40% more likely to succeed (Project Management Institute).
  • End Users: If you’re a small business, your end users might be your customers or clients. If you’re a nonprofit, your end users might be your beneficiaries—the people who utilize the services your organization provides. In all cases, understanding the needs of those you serve is essential to shaping your products and services.
  • Communities: Community is at the core of nonprofit work. Nonprofits are designed to create social good, so understanding the realities of community needs results in more impactful programming. For businesses, community engagement can be just as important, increasing visibility and brand awareness and creating competitive advantage. Across sectors, community engagement also helps organizations identify and avoid potentially harmful unintended consequences.
  • Internal and External Partners: Aligning internal and external partners is especially critical for successful implementation, which is why it’s important to engage them early and often. Internal partners can range from staff to volunteers to board members. External partners could be other businesses or nonprofits whose work complements your own. Other examples of external partners include local elected officials, community leaders, consultants and other outside experts, suppliers, or even high-profile spokespeople.

If you’re a nonprofit, our Guide to Nonprofit Strategic Planning further breaks down differences in stakeholders for nonprofit organizations—and what successful engagement looks like.


Engaging vs Managing Stakeholders

How we frame working with stakeholders is especially important—yet is all too often overlooked. According to the Project Management Institute:

Stakeholders cannot be managed—they are to be engaged so that their expectations can be managed.

Yes, engaging stakeholders takes time, and the results are never guaranteed. But effective stakeholder engagement vs management can take your work to the next level.

One of the benefits of stakeholder engagement is getting fresh and potentially challenging input. Engaged stakeholders provide alternative perspectives about our underlying assumptions and proposed goals and strategies. Further removed from a project, stakeholders may see gaps that we might otherwise miss. The input provided won’t always be what we expect, but it can make the work much stronger.

Read more: What Makes an Effective Stakeholder Interview


Stakeholder Engagement in Strategic Planning

Strategic planning is perhaps one of the clearest examples of the value of stakeholder engagement. As with any initiative, you want to make sure you have the greatest chance for a successful outcome. That’s where stakeholder engagement comes in.

Stakeholder engagement is so important for strategic planning that it’s built into the actual process. For example:


So whether you’re designing a new project, launching a new company, or starting a strategic planning process at your organization, make sure stakeholder engagement is at the top of your action plan.

Read more: Engaging Staff in Strategic Planning

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