Mcom 320: Step 3 (C): Weight Stakeholder-focused Criteria
1. Get to Know Your Stakeholders
Identify individuals or groups who are directly or indirectly affected by your business case. Understanding who your stakeholders are is the first step in engaging with them effectively.
2. Understand Stakeholder Roles and Influence
Determine the level of influence each stakeholder has over your project or business decisions. Classify stakeholders based on their power, interest, and ability to impact outcomes positively or negatively.
3. Identify Stakeholder Needs and Expectations
Gather insights into what stakeholders expect from and what they value most. This step ensures that you address key concerns and build trust.
4. Engage Stakeholders Early and Often
Involve stakeholders in the early stages of decision-making to build buy-in and reduce resistance. Regular engagement ensures stakeholders feel valued and reduces the likelihood of misunderstandings.
5. Evaluate and Refine Stakeholder Strategies
Periodically review your stakeholder engagement plan and adjust based on feedback and outcomes. Continuous improvement ensures your approach remains relevant and effective.
What You Need to Know about Stakeholders
Stakeholders are individuals, groups, or organizations that have an interest or concern in a business and can affect or be affected by its actions, objectives, and policies.
Who They Are
Internal Stakeholders: Employees, managers, and owners within the organization.
External Stakeholders: Customers, suppliers, investors, creditors, government agencies, and the community.
Stakeholder Matrix/Map
Here is an example of a Stakeholder Matrix/Map that outlines power and interest on the different axes and shows examples of where some stakeholders might lie on that map.
Understanding the Stakeholder Matrix/Map
X-Axis (Interest): Represents the level of interest stakeholders have in the business or project, ranging from low to high
Y-Axis (Power): Represents the level of power stakeholders have to influence the business or project, ranging from low to high
Stakeholder Matrix/Map
Stakeholders in the Matrix
- Employees: High interest, moderate power
- Managers: High interest, high power
- Owners: Very high interest, very high power
- Customers: Moderate interest, moderate power
- Suppliers: Moderate interest, low power
- Investors: High interest, high power
- Creditors: Low interest, moderate power
- Government Agencies: Low interest, high power
- Community: Moderate interest, low power
Key Takeaways
- High Interest, High Power: Stakeholders like managers, owners, and investors are crucial as they have both high interest and high power. Their needs and concerns should be prioritized.
- High Interest, Low Power: Stakeholders like employees and customers have high interest but less power. They should be kept informed and engaged.
- Low Interest, High Power: Stakeholders like government agencies have high power but low interest. Their influence should be managed carefully.
- Low Interest, Low Power: Stakeholders like the community and suppliers have lower interest and power. They should be monitored but require less focus.
Identifying Stakeholder-focused Criteria
Criteria Development: When developing criteria for a business case, consider the interests and power of stakeholders. Criteria should reflect the priorities and concerns of key stakeholders to ensure that the recommended solution aligns with their needs and expectations. Common criteria might include cost, feasibility, impact on stakeholders, and alignment with strategic goals.
Weighted Factor Analysis: A weighted factor analysis is a tool used to evaluate and prioritize different options based on a set of criteria. Each criterion is assigned a weight based on its importance, and each option is scored against these criteria. The weighted scores are then summed to determine the best option.
Steps to Complete a Weighted Factor Analysis:
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Identify Criteria: Determine the key criteria that will be used to evaluate the options. These should reflect the interests and concerns of stakeholders.
Example: Cost, feasibility, impact on stakeholders, alignment with strategic goals, time to implement, risk.
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Assign Weights: Assign a weight to each criterion based on its importance. Weights can be determined through stakeholder input, expert judgment, or historical data.
| Criterion | Weight |
|---|---|
| Cost | 30% |
| Feasibility | 25% |
| Impact on stakeholders | 20% |
| Alignment with strategic goals | 15% |
| Time to implement | 5% |
| Risk | 5% |
Applying the PACADI Model: Stakeholders & Criteria — Case Study: Sourdough & Co.
Jacob and his team identified the key stakeholders who would be affected by the strategic decision and then established the criteria that should drive the final choice.
Key Stakeholders
- Core Customers: Local buyers who value the artisan nature of the bread.
- Employees: Bakers and front-of-house staff who take pride in the bakery’s craft.
- Jacob (Owner): Invested in both the financial health and long-term vision of the business.
- Local Partners: Cafés, farmers’ markets, and potential collaborators who care about quality and community.
- Future Customers: Potential patrons who might be drawn in by stronger branding or new distribution methods.
Weighted Decision Criteria and Justifications
| Criterion | Weight | Justification |
|---|---|---|
| Brand Integrity | 40% | Sourdough & Co.’s primary competitive advantage is its authenticity and artisan quality. Diluting this could cause long-term damage that outweighs short-term gains. |
| Customer Retention | 30% | Keeping existing loyal customers is more cost-effective than acquiring new ones, especially in a niche market where word-of-mouth drives success. |
| Revenue Growth Potential | 30% | While financial sustainability matters, Jacob’s values and business model prioritize steady, values-aligned growth over rapid scaling. |
These weights reflect a strategy-first approach, where the business protects its identity while growing within its core strengths. The criteria also balance qualitative factors (like customer loyalty) with quantitative ones (like revenue).
Apply a recommendation business communication strategy
Use a decision matrix to quantify qualitative decision criteria
Craft executive summaries