Business Growth: Stakeholder Salience Model

This begins a multi-part series exploring tools to help you improve your business. (This post should have appeared on Tuesday, January 31)

Business owners use several tools and techniques to analyze their operations. Sometimes they have to hire consultants to conduct the analysis. I will share some of the tools that consultants use so you can perform them yourself. You may choose to use some of the tools immediately or in the future.

Today’s tool, the Stakeholder Salience Model, will help you recognize and prioritize the stakeholders affiliated with your business. In 1997 Doctors Agle, Mitchell, and Wood developed the Stakeholders Salience Model. The model recognizes your business may be responsible to more people than just you, the owner. They defined a stakeholders as any party who possesses at least one of three attributes:

• Power-to influence the organization or project deliverables (coercive, financial or material, brand or image)
• Legitimacy-of the relationship & actions in terms of desirability, properness, or appropriateness
• Urgency-of the requirements in terns of criticality and time sensitivity for the stakeholder

How to Use the Stakeholder Salience Model

The steps for managing your stakeholders include:

1. List all the possible stakeholders for your business
2. Assign them a priority, and give them attention, according to the diagram above. Assign them a
• 1, 2, or 3 if the only possess one attribute (low priority)
• 4, 5, or 6 if they possess two attributes (medium priority)
• 7 if they possess all three attributes (high priority)
• 8 if they possess none of the attributes (no priority)
3. Decide if you think you should help them change their stake by adding other attributes (for example, you may wish a stakeholder who only possesses legitimacy to become more involved, urgency; or you may wish a lender who has power and legitimacy to lose their power and legitimacy by closing the loan)

Try completing a stakeholder salience analysis of your business. It will help you recognize who possess a stake in your business, what kind of stake they possess, and how much attention you should give to their stake.

I will post later today Thursday’s article outlining the SWOT analysis