1.4: Stakeholder Concepts

Who are stakeholders in your water supply?

While you might immediately think of your water utility, city or county agencies, you are also a stakeholder in the water supply. You are a resident and you use the water in some fashion (e.g., drinking, cooking, cleaning yourself and clothes, irrigating, and swimming).

How much interest do you have in the water supply? And how much power do you wield in critical discussions about water?

Learning Objectives

After reading this section, you should be able to:

• Identify and classify stakeholders
• Differentiate among stakeholders according to the level of interest and the level of power

Stakeholders are people with a “stake” in an idea or project. These could be people who are financially related to the idea or project, interested in the environmental impacts, or just plain curious. In many nationwide issues, like the presidential election, health insurance, or gasoline prices, all residents of the United States have a “stake.” Some issues are much more regional, such as water supply issues or air pollution issues, in which residents in a smaller geographic area have a stake while some issues, such as health care, are nationwide issues

Stakeholders are typically classified as internal or external. An internal stakeholder is a person within an organization, such as a staff person or board member, while an external stakeholder is outside an organization. For example, suppose that staff at a water agency was considering changing the rules for a turf grass removal program, commonly called "Cash for Grass," in order to stop rebating artificial turf. Here is a table of the internal and external stakeholders who have a “stake” in this proposal to remove artificial turf from the Cash for Grass program:

Internal Stakeholders	External Stakeholders
Staff at the water agency	Residents in the area
Management at the water agency	Landscapers (who install plant material)
Board members at the water agency	Contractors (who install artificial turf)

Why is it important to identify stakeholders and categorize them? As you work in the water industry, you will find that reaching out, listening to, and working with stakeholder groups is critical to your success. In the example above, what would happen if staff didn't reach out to contractors who install artificial turf? It's possible that they would become very angry because a potential source of income (installation of artificial turf for rebates) has been taken away from them. They might make phone calls to managers and board members. They might attend board meetings to speak and protest during public comment. Their anger might have been moderated if staff had reached out ahead of time to explain the reason for the rule change and offer some alternative strategies to move ahead.

Let's take another example from the water industry. Let's say the customer service manager decided to implement a new software program that sent work orders to field representatives. The customer service manager bought the software with her own manager's approval, but chose not to introduce customer service and field staff to the new product. Instead, the customer service manager rolled out the product at a meeting after the software was purchased. How do you think the staff felt? They may have had valid concerns about the software, but the entire purchase was presented to them like a done deal. The customer service manager should have identified her stakeholders, including internal stakeholders like customer service and field staff, ahead of time.

Stakeholders are people very specifically interested in an idea or concept whether it's artificial turf or work order software. Stakeholders are specific to the locale as well as the concept. For example, the City of Beverly Hills developed a cultural plan, which included an extensive list of stakeholder groups: residents, businesses, chamber of commerce, entertainment industry, faith-based communities, fashion community, financial sector, gay community, homeowners associations, Iranian community, lawyers associations, media, private galleries, restaurants, senior community, service clubs, and the tourist industry, including hotels and visitors.

A cultural plan for a different city would have different stakeholder groups and, a stakeholder list for a different issue in the same city would have different stakeholders. Let’s look at what would happen if we looked at a different issue, like water supply reliability, and identify internal and external stakeholders in Beverly Hills. Stakeholders who were added to the list are in blue text. Many of the stakeholder groups that were interested in a cultural plan do not appear below because they may not be interested in water supply reliability.

Internal Stakeholders for Water Supply Plan	External Stakeholders for Water Supply Plan
City of Beverly Hills staff	Residents
City of Beverly Hills management	Businesses
Beverly Hills City Manager	Chamber of Commerce
Beverly Hills City Council	Environmental Groups
Metropolitan Water District (wholesale supplier of water)	Homeowners’ Associations (HOAs)
	Large Residential Users (A Top 100 List)
	Media
	Restaurants
	Tourism & Hotel Industry
	Visitors

The list is by no means all-inclusive, but shows that there are some groups that will be constant in an area because they are powerful (HOAs, tourism & hotel industry, and restaurants) and some groups that are specific to an issue (e.g., Environmental Groups and Top 100 water users). This list is shorter and more focused on where the water is used.

Once you have identified your stakeholders, you can arrange them according to their level of interest and power.

Figure \(\PageIndex{1}\): Stakeholders Matrix by Zirguezi is licensed under CC0 1.0 - Power vs. Interest Chart

In terms of water issues, most of the public, most of the time, unfortunately, has a relatively low level of interest and low level of power, which would classify them as Apathetics. But come drought time? You will have a much higher level of interest for most people and they will shift from the Apathetics to the Defenders. They may not have a high level of power, but their interest in water supply reliability is much higher.

Not everyone who is powerful is interested in all issues. For water supply, there are frequently groups that simply do not perceive water supply to be an issue, and choose to focus their energy elsewhere. They would be considered Latents (“latent” means that the interest is lying dormant, but could be expressed with the right circumstances). A Latent stakeholder might become more interested in water supply reliability if he/she were involved in a development that needed water, if there was a drought, or if there were mandatory watering schedules or penalties that affected his/her interests.

One of the most important issues in water supply management in the state of California is the challenge of the Sacramento-San Joaquin Bay Delta. Formed by the confluence of the Sacramento and the San Joaquin Rivers, the Bay Delta, south of Sacramento is the source of continual stakeholder challenges. Who are the stakeholders in the Bay Delta? At first, it seems obvious: there are residents and farmers who live and work in the Delta. While they are the most visible stakeholders, the water supply for much of Southern California flows through the Delta so Central Valley farmers and Southern Californians are also stakeholders (most Southern Californians would be Latents though until a crisis arises). Likewise, Northern Californians are stakeholders, because this is water that is leaving their area. Frequently discussions about the Bay Delta are framed around the strong interest and immense amounts of power that Southern California wields and the high interest, but low amounts of power that the farmers in the Bay Delta hold. We will discuss more about the Bay Delta in the section on the State Water Project.

You've learned about the importance of involving stakeholders and that stakeholders can be classified as internal or external and in terms of power and influence as well as interest. In Part Two of this text, you'll look at four major surface water development projects in terms of stakeholders.

Try It!

1. Identify a water-related issue in your area. Try typing into Google "water issues" and the name of the community. Who are the stakeholders? Classify them as internal or external. Classify each stakeholder on a grid in terms of their interest and power.
2. In the water-related issue you chose above, what are ways (other than the drought) to increase the level of interest of stakeholders in the issue?
3. Add the stakeholders in the conservation program rule change scenario to a chart in terms of interest and power. Who has both a lot of interest and a lot of power? Who has neither interest nor power?

Key Terms

Stakeholders⁠—People or organizations with a “stake” in an idea or concept