Whenever a new business concept or strategy strikes you, your first instinct may be to establish a plan of action.

But as you roll out these initiatives, don’t forget to factor in an integral task: communicating with your stakeholders. Each of these individuals or groups holds some sort of interest, or “stake,” in your activities, meaning they may be directly affected by your prospective ventures. Effectively managing your relationships with them, along with their expectations, can help calm the waters so you can sail smoothly toward achieving your short- and long-term enterprises.

Identifying your stakeholders

Before discussing the best practices for communication, you must understand all your potential stakeholders and why they care about your business. They can be divided into two broad categories.

Internal
Stakeholders in this group include those focused on the day-to-day operations of your business, such as its owners, investors, and employees. They are primarily invested in its overall success since their compensation likely depends on its earnings and growth, especially shareholders who hold significant stock in it.

External
Customers, suppliers, and the public at large comprise most of this group. Their interests tend to be more external, concerned largely with your product quality and pricing and general brand identity. Another segment of external stakeholders is government bodies and regulators, who may scrutinize your practices to examine your commitment to environmental standards, local laws, and other guidelines.

Understanding their needs

As you can see, a tremendous range of people and groups can qualify as stakeholders, and each may be affected by different actions and goals of your business, leading to varying—and potentially conflicting—motivations. For example, investors may prioritize boosting profits over employee compensation; likewise, customers may demand lower product prices, causing you to rethink supplier costs.

For this reason, deducing the specific needs and expectations of all your stakeholders is the first step toward balancing their demands effectively. Before you execute any new or altered practices, identify these parties in detail, assess their relation to and influence over your organization, and then open lines of two-way interaction with them.

Valuing stakeholder communication

Of course, making a concerted effort to engage these groups may just seem like another burden to add to your already long list of responsibilities. However, doing so offers many benefits to both them and your organization. Here are some of the top perks to consider.

Enhanced trust and loyalty
When stakeholders feel that their concerns are acknowledged and addressed, they are more likely to trust your brand. This can encourage long-term loyalty (e.g., employees remaining committed to your company, reducing turnover) and consistent patronage (e.g., customers returning for repeat purchases, securing your revenue).

Potential cost savings
Good stakeholder communication can potentially reduce your operational costs. For example, suppliers may offer you discounts should you foster a congenial and loyal relationship with them. Additionally, you could better avoid fees and penalties by staying in contact with government organizations like permit issuers.

Guided practices
Thanks to their varying perspectives, stakeholders can provide valuable insights on how to course-correct or pursue more lucrative strategies. This is particularly true when it comes to investors’ perspectives on your fiscal performance, helping you avoid making uninformed decisions with expensive consequences.

Targeted marketing
Similarly, you can lean on these groups to assist you in shaping your marketing messaging to suit your audience. In an article for Forbes, business professor Benjamin Laker uses the example of a stop-smoking campaign: “Engaging healthcare providers, patients, public health officials, and community leaders from the outset ensures that the campaign is well-rounded and addresses the real needs of the community.” Assess how like efforts such as polling your customers’ opinions on your marketing could equip you to enact more successful campaigns for promoting your upcoming initiatives.

Customizing communication channels

Once you understand the full scope of who your stakeholders are and their impact, you can take direct steps to better communicate with them. First, you should broadcast your company’s goals and activities to each group, being sure to tailor your messaging accordingly while minding their motivations. With investors, for example, you may want to share financial documents that display your current performance and projections along with the costs necessary to implement your innovative strategy. Conversely, when updating employees, adjust your verbiage to focus on the company’s growth potential, helping them feel excited about any upcoming developments. And as soon as you’re ready to market to the public, share the value consumers can obtain from your new initiatives, whether they include new product offerings or more convenient access to your services.

Staying in touch

Communication doesn’t cease once you launch your plans. In fact, you may see more requests for it roll in. As an illustration, your investors may demand to see ongoing financial reports so they can monitor the successes or struggles of your efforts.

Because stakeholders are numerous, you may find it difficult to juggle all their interests, so it’s important that you detail the essential touchpoints as you proceed, leaving no stone unturned. One helpful strategy is to craft a timeline of your objectives that lists who may need to be updated at each step. For example, if you have a retail business you’re expanding, you’ll need to write up a business plan to present to shareholders and potential lenders, speak to government bodies before breaking ground on a new location to obtain the proper permits, and contact your suppliers when you are ready to place orders for this new shop. Revisit this timeline often to ensure that you stay on top of each of these tasks and don’t overlook an important stakeholder.

Setting clear expectations

As with any other communication, the key is to always be open and transparent; otherwise, stakeholders could develop misaligned expectations that cause them to become dissatisfied with your efforts. To demonstrate, inform your clients that you’ll be raising the prices of certain products before it happens, being detailed about the when and why. And if any challenges arise, such as a poor response in consumer polls, notify your investors and employees about them and that you may be altering your initiatives accordingly.

To help facilitate such clarity, maintain open channels via tools such as surveys, Q and A sessions, and suggestion boxes in your internal communications software. Many companies have even adopted the practice of stakeholder interviews, which involves inviting representatives from various groups to share their insights on business decisions. Further, when you make adjustments to your strategies to appease stakeholders, notify them that you have listened to their feedback; such engagement can aid in fostering trust and encouraging future collaboration.

Ultimately, the success of any undertaking you roll out may depend on how deftly you manage your stakeholder relationships. By understanding their identities, wants, and needs and taking in their feedback, you can ensure that each group has its expectations met and is as satisfied as possible. While it’s impossible to please everyone, especially when motivations clash, maintaining open communication across the board will pave the smoothest road to ongoing success.

TAKE ACTION:
List each of your organization’s stakeholder groups in detail, map their key motivators, and then establish policies for communicating any new initiatives with them.