Key Stakeholders: Definition, Benefits and How To Identify

A key stakeholder plays an important role in a company's long-term success. Key stakeholders can help companies make strategic decisions, minimize risks and grow their business. If you are involved in helping your organization reach its goals, it's important to know who your key stakeholders are and how to recognize them. In this article, we discuss who key stakeholders are, how to identify key stakeholders and what benefits key stakeholders can offer your business.

Who are the key stakeholders in a company?

The key stakeholders in a company are the most crucial stakeholders in a particular business. A stakeholder is any professional affected by a business's operations, projects and victories. Stakeholders vary in the type and amount of interest they have in a company.

A key stakeholder is among the most important stakeholders for a company. Key stakeholders are highly interested in a particular company's success, as they are most affected by its business. Likewise, a business's success and growth often depend upon its key stakeholders.

Related: A Comprehensive Guide to Stakeholders in the Workplace

What are key stakeholders' roles in a business?

A key stakeholder's role within a business varies depending on many factors. The responsibilities of key stakeholders may include:

• Providing financial support to your business

• Helping with business initiatives or assignments

• Asking for updates on your business's current projects or recent developments

• Contributing during planning or company leadership meetings

One of the primary factors that determines if a stakeholder is key is the specific relationship that the stakeholder has with your business. Stakeholders in your company can be customers, employees, investors, supervisors and other individuals who have some type of interest in seeing your business succeed.

Types of key stakeholders

Here are some of the most common types of key stakeholders within a business:

Employees

A company's operations and victories can affect its employees' salaries, job stability, financial security and more. An employee is a key stakeholder when their company can greatly affect them and when they can greatly affect the company. Project managers, for example, can be key stakeholders because they may exercise a lot of control over the success of a company's initiatives and activities.

Customers

The quality and quantity of a business's offerings can affect customers, meaning they are among your stakeholders. A customer may be one of your key stakeholders if they assist with the creation or implementation of a new company project. For example, some businesses ask certain target consumers to be a part of focus groups or receive free samples in exchange for honest reviews.

Some customers may also be key stakeholders if they are experts within your field. For example, if your toothpaste product receives public and positive reviews from dentists, those dentists may play a crucial role in the success of that product line. Likewise, if your company's toothpaste line performs well, the dentists who review your product may have their business positively affected, too.

Investors

Investors are often key stakeholders because their personal or company finances directly relate to your business's success. Simultaneously, the continued financial support of your investors can directly affect your business's success.

For a smaller or medium-sized company, all investors are likely to be key stakeholders. For larger companies with dozens or hundreds of investors, the key investors are likely those who your business financially depends upon the most.

Related: Guide To Understanding Venture Capital

Company leaders

Company leaders are frequently key stakeholders. A business's executives handle crucial decisions related to a company's daily operations, long-term goals and development efforts. These types of decisions can affect both the executives and the company.

Competitors

Although competitors present challenges to your business, competitors are often important stakeholders in your company. If a competitor offers similar products or services to the market, then that competitor can affect your business's strategic decisions or operations. For example, to help distinguish your business from your competitors, your company may work on product or service development, lower your prices or alter your sales tactics.

Government agencies

The government system in your region or nation affects how you conduct your business. Government agencies set laws and regulations for business taxes, workplace safety conditions and financial protections. The government in your area may also have regulations for your particular industry. Medical professionals, for instance, often need to adhere to specific healthcare laws.

Vendors

Many businesses rely on vendors to perform their business operations and projects. Similarly, these vendors depend on your company to financially support their own business. Vendors include suppliers, distributors and contractors with your business. They may supply your company with resources such as raw material, technology or business loans.

Read more: What Is a Vendor?

Communities

A business's local community can affect its business operations and decisions. The local community's opinions of a business, for instance, may influence its reputation both regionally and globally.

Businesses can also affect the local communities they're based in. A local company can provide its community with new employment opportunities, economic developments and financial prosperity.

How to identify key stakeholders

Here are the five steps to identify the key stakeholders at your company:

1. Review your stakeholders

Make a list of all the stakeholders at your company. This list may include:

• Customers

• Investors

• Company leaders or executives

• Creditors, such as banks

• Employees

• Government agencies

• Department managers

• Vendors

• Business owners

• Regional or national communities

• Potential customers

• Professional organizations in your industry

• Suppliers

• Distributors

• Supervisors

• Labor unions

• Shareholders

• Industry trade groups

• Competitors

• Agencies that oversee regulations in your industry or nation

2. Understand the purpose behind identifying your key stakeholders

Sometimes, you may need to identify key stakeholders for your entire company. These general key stakeholders often include company leaders, executives, major investors or creditors and any government agencies that help fund your projects.

You may also sometimes want to identify the key stakeholders of a specific project or initiative at your company. Although there may be overlap between general key stakeholders and key stakeholders for particular projects, these lists of key stakeholders often differ. Key stakeholders for a project, for example, are more likely to include employees, such as department leaders or project supervisors. A project's key stakeholders also more frequently include certain groups of target customers or involved vendors.

Related: How To Engage Project Stakeholders

3. Determine their impact on your operations

Figure out which of your stakeholders have or could have the greatest effect on your company, be it on a specific project or your business as a whole. As you review your list of stakeholders, think about the following in relation to each one:

• If they make or could make a fundamental difference to your business

• If you can specify what you want from the stakeholder

• What you hope to gain from your business's relationship with the stakeholder

• How they have affected your business in the past

• If the stakeholder could help your business develop or grow

• If the stakeholder exists in multiple categories, such as if they are both an investor and executive

• If another stakeholder could easily perform the stakeholder's responsibilities

Related: How To Determine Stakeholder Value

4. Learn their needs in relation to your business

Think about not only how each stakeholder can affect your business but also how your business can affect the stakeholder. For each stakeholder, write down their needs in relation to your business, including:

• Why they are interested in this project or your business as a whole

• What they expect for the project or entire business

• What role or influence they have over operations

• How frequently you need to contact or send them updates

• How important their satisfaction with the project or business is

5. Prioritize your list

Evaluate the stakeholders on your list. Determine which stakeholders most affect your business as well as who your business most affects. The modified list is your group of key stakeholders.

Related: A Guide to Stakeholder Mapping

Benefits of key stakeholders

Key stakeholders can help your business function and develop in several ways. The specific benefits of key stakeholders vary depending on many factors, such as their particular role, expectations and if they are project or general key stakeholders. Here are some of the most common ways that key stakeholders can benefit your business:

• Minimize risks: Stakeholders can offer various perspectives on your business operations or projects. Their unique viewpoints can help your business reduce the effects of business risks or potentially avoid those risks altogether.

• Provide resources: Stakeholders frequently provide businesses with resources necessary to the company's operations or goals. These resources may include financial support, project materials, technology systems or human resources.

• Develop or grow business: Key stakeholders often help make crucial decisions about a company's development opportunities, expansions or structural changes. They have a personal interest in seeing your company grow and succeed.

• Help operations run smoothly: Some potential key stakeholders, such as employees or department leaders, influence the day-to-day operations of your company. These stakeholders play important roles in making sure regular business tasks and assignments function productively.

• Align operations with a strategic vision: Key stakeholders understand the long-term goals of your company. Their knowledge of the company's overall objectives can help ensure that your particular business operations or projects work towards the ultimate vision for the company.

Internal vs. external key stakeholders

Key stakeholders can be external or internal. An internal stakeholder is a professional with a direct relationship with your company. Internal stakeholders include employees, business owners, investors and board members. External key stakeholders, however, are people affected by your business who do not directly work with you. External stakeholders include distributors, regulatory agencies, customers and creditors.

Here are some factors to help you determine whether your stakeholder is internal or external:

Type of interest in your company

Internal key stakeholders have both a financial and personal interest in your business's operations and successes. External stakeholders may benefit financially from your business but rarely have a personal interest in your company. For example, although your suppliers earn income from your business, your business operations do not personally affect them. Your investors, however, are more likely affected by your business both financially and personally, as they have invested their personal finances in your company.

Influence over your company

Internal stakeholders influence a business's day-to-day functions. Employees perform necessary routine responsibilities, board members make crucial decisions about operations and department managers oversee projects and tasks.

External stakeholders, however, rarely affect the daily operations of your company. While your customers, for example, affect your business financially, they do not help with the decisions your employees or company leaders make regularly.

Your business's influence over the stakeholder

Your company wields much greater influence over your internal stakeholders than your external ones. Employees, for instance, rely on your business to provide them stable careers and dependable income. Distributors, however, have other sources of revenue and support systems for their employees.

Stakeholders vs. shareholders

Although shareholders are a type of stakeholder, stakeholders and shareholders are not the same. Shareholders are people who own stocks in a company. A shareholder is a type of external stakeholder because they do not have a direct relationship with your business, but they do have a financial interest in your company's success.

However, most types of stakeholders have a deeper financial interest in a company's operations. Investors, for example, have chosen to financially support a company in its long-term goals. As another example, while a distributor likely has other clients, their financial success still relates to your specific company. A shareholder, however, can transfer their stocks to another company or withdraw their stocks in cash with relative ease. Although they likely want your company to succeed, shareholders can change their financial relationship with your company at any time.