Core Concepts #1: Stakeholders

The “who” of tradespace exploration

Matt Fitzgerald
The Tradespace
6 min readSep 18, 2023

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Business people sitting around a table with notepads, pens, and phones

This is part one of a seven-part series of posts on the core concepts of tradespace exploration, designed to help beginners become familiar with terminology and the general structure of tradespace data. Click here to find the other posts in this series, as well as other Tradespace 101 posts.

When analyzing a decision, it’s always important to know the stakeholders. Stakeholders are the “who” of a decision problem: any person or group affected by the outcome of the decision. To make a successful decision, we must satisfy the stakeholders. At the very least, we need to know the decision makers: the subset of stakeholders who actually choose the outcome. For many problems, you yourself may be the only decision maker — or if you are doing tradespace exploration for work, perhaps your boss or your boss’ boss. For complex problems, we may extend our analysis to include many stakeholders ranging from those directly involved in the decision to those only indirectly affected.

Why do we need to know the stakeholders? Because we need to know what they care about! How do they decide whether or not a solution is “good”? What criteria are they using? This dictates the data collection and/or modeling that we need to perform in order to present a complete picture of the problem when performing a MATE study. The core tenet of Value-Focused Thinking (a decision-making approach that underlies MATE, which we’ll discuss more in a later post) is that we must first understand what the stakeholders want if we are going to generate creative, high-value solutions.

What’s the best way to get this information from a stakeholder? Ask them! The best analysts go straight to the source to make sure they are capturing the correct data. This interaction can take many forms, ranging from a formal in-person interview, to a casual conversation, to a chain of emails, or even via interaction with an official proxy like an assistant. The more detail about stakeholder needs that can be gathered, the better — typically, this process is limited by practical concerns like busy schedules. Do your best to find the method that is most effective for each individual stakeholder.

When figuring out who the stakeholders in your decision are, it can be helpful to separate them into basic tiers.

To illustrate this step by step, we’ll use the example of buying a family car.

A car with angry speech bubbles around it
A lot of different people can have opinions about a car — how do we prioritize who to listen to?
  • Decision makers. The stakeholders who actually choose the final outcome. These are the most important stakeholders to actively engage while exploring the tradespace, as satisfying their needs is mandatory. If there are multiple decision makers, they will have to agree on a solution, potentially turning a regular decision into a negotiation.

When buying a new family car, likely the two decision makers are you and your spouse. Both of you need to sign off on this decision before making the purchase.

  • Participating stakeholders. Any stakeholders that aren’t decision makers (i.e., they don’t actually get to make the final call) but do “have a seat at the table”. Many decision makers are willing and able to incorporate the opinions of other people, and if so it is useful to understand the needs of these people as well.

You carpool to the city for work with your best friend, and you alternate who drives: you could certainly buy your car with or without his approval, depending on how many stakeholders you want to heed. But maybe he is a mechanic, and you value his input on what cars he thinks are good. Capturing his opinions will give you more useful information to work with when exploring.

  • Non-participating stakeholders. Sometimes there are stakeholders that are neither decision makers nor actively participating in the decision process, but do have opinions worth taking into consideration. Capturing the needs of this group can be useful but is less important than the prior groups.

You aren’t planning on consulting with your kids on this decision (they mostly want fire decals on the side of your car, which is not a priority for you). However, it might be worth considering what their needs are regarding backseat space and comfort, since they will be affected by your choice as well.

  • Omitted stakeholders. There are often people who are marginally affected by your choices that you simply choose to ignore. There’s nothing wrong with this: there has to be a cutoff somewhere! Just make sure that you are okay with any potential drawbacks or fallout that comes of not considering the needs of this group.

You regularly drive your kids’ friends to and from school and sports practices, so technically they are affected by this decision. However, it’s not important to you what they want, and you figure that satisfying your kids (in the prior group) is probably sufficient to also satisfy other kids.

The most important takeaway: always make sure to spend the necessary time identifying the stakeholders for the decision, and then prioritize interacting with them and eliciting/understanding their needs corresponding to their tier of importance. If you skip this step, you run the risk of “answering the wrong question” and wasting both your time and the stakeholders’ time. Good luck!

A marquee that says “Bonus Tips”

Always remember that not all stakeholders are “winners” — people who are negatively affected by a decision are also stakeholders. Decisions that have externalities (side-effect consequences, usually negative) will often have to find a way to satisfy these stakeholders, as they can fight, block, or otherwise make life difficult for the decision makers. Large infrastructure projects are a classic example, as neighbors will strain against construction noise, increased local traffic, or other nuisances. Explicitly considering these stakeholders can reduce the chance of roadblocks when attempting to implement a chosen plan.

The relationships between stakeholders can sometimes have additional impact on the way that problems are solved. For complex problems with many stakeholders, it can be invaluable to understand these relationships before attempting to find solutions that will satisfy everyone. Though we won’t go into too much detail here, some examples of extra wrinkles between stakeholders are:

  • Competition. Normally, we assume that stakeholders are collaborating in good faith to find a solution that works for them all — this is typically true for any stakeholder actually participating in the tradespace exploration process. However, some problems feature direct competition between stakeholders, who will actively search for solutions that result in the greatest difference in value between themselves and (some) others. Competitive stakeholders should be treated with caution, as they are more likely to lie or misrepresent their needs in an attempt to game the system to be more in their favor. This is the main reason why participation is often limited to collaborative stakeholders. Stakeholders affected primarily by externalities (as mentioned earlier) can easily become competitive if they do not feel that their needs are being considered.
  • Representation. Sometimes stakeholders participating in a decision making process are representatives for a larger group of people, such as a politician for their constituents. Their objectives and opinions will often be blended with the larger group, complicating the elicitation of their needs. In this case it can help if you also have some access to the group and not just the participating stakeholder.
  • Voting. Some decisions are made via a voting process, typically involving a larger number of stakeholders. There are multiple voting systems that can have different impacts on the way the stakeholders are likely to approach the problem. Voting systems that assign no veto power have no decision makers (using the classic definition) because no single person is mandatory for an agreement. However, sometimes stakeholders that are considered more important (based on voting rules or personal influence) are given the “decision maker” label anyway.
  • Coalitions. Stakeholders, particularly those who are not decision makers, will often band together into coalitions to increase their influence on the decision. This is especially common for voting problems, as their coordination can directly increase their bargaining power, but it can occur even for informal decisions. Coalitions can be used to simplify the problem by reducing the number of discrete stakeholders — but be wary that coalitions can always break apart again! Talking to all the members of a coalition can help you prepare for this possibility.

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Matt Fitzgerald
The Tradespace

Data exploration and analysis. Negotiation. Visualization. Film, baseball, dogs.