What is Project Stakeholder Management? 

Stakeholders are those who have a stake in the project and its outcome. The person or people who have invested in the project and affected by the project’s outcome are referred to as Stakeholders. It is absolutely necessary to communicate and constantly keep in touch with the stakeholders – which is ideally the best practice for good stakeholder management. When projects fail to deliver its outcome, the main cause is cited is the lack of communication between key stakeholders.

What is Project Stakeholder Management?

The success of any project depends on its fulfilment of the expectations of the stakeholders, which means the project has delivered on its promise. The management of stakeholders and influencing their expectations is the main responsibility of the project manager. It is the stakeholders who decide on the acceptance of the project delivery underscoring the importance of project stakeholder management.

Project stakeholder management involves identifying the people or groups, that can impact the project,  analyzing stakeholder expectations for effectively engaging stakeholders through business strategies for project decisions and execution. It also focuses on constant and continuous communications with stakeholders for regular updates and conflict resolution and enhances stakeholder engagement.

The processes defined in Project Stakeholder Management are defined below:

• Identify Stakeholders. The objective of this process is a stakeholder register.
• Plan Stakeholder Management. The objective of this process stakeholder management plan.
• Manage Stakeholder Engagement. The objective of this process issue log, change requests.
• Control Stakeholder Engagement. The objective of this process work performance information, change requests

What is the difficulty in Project Stakeholder Management?

It can be conflicting views and objectives. One of the stakeholders who has a major stake might want a new feature or functionality which can be negated by another stakeholder wielding appreciable influence. And this is the reason to classify the stakeholders in order of importance and priority. And the role of the project manager is critical in balancing out the expectations to resolve differences and steer through the conflicts.

How do you classify the stakeholders?

The stakeholders can be classified using Stakeholder Analysis.

Even before the stakeholder management begins, it is important to identify the stakeholders. Stakeholder analysis is used to classify stakeholders by identifying their r needs and requirements. Everything boils down to need, which includes information need that’s crucial for stakeholder management.

The stakeholders and their relationships to the project manager are listed below.

Top Management

Top management is represented by the company’s CEO or CFO or Presiden, vice-presidents, directors, division managers, the corporate operating committee, and others. These are the people that direct the strategy and responsible for the development of the organization.

The Project Team

The project team can be made up of dedicated or even shared resources, and at times borrowed resources on a part-time basis are deployed. The project manager, need to provide leadership, direction, and support to team members in accomplishing their tasks.

Peers

The people at the same level in the organization as the project manager are called peers. Peers may or may not be as part of the project team and don’t have any responsibilities or accountability towards the outcome of the project.

Resource Managers

The resources that can be borrowed are not in the control of project managers as they can be controlled by other managers. So the relationship with those managers ought to be good for a smooth transition of resources moving in and out based on mutual understanding.

Internal Customers

Internal customers are the persons who are customers for projects within the organization. Inter customers meet internal demands and have the power to accept or reject the work. The project manager must get their buy-in early of the work about deliverables and update the customers about issues and address them as well.

External customer

External Customers are customers of a business or project that can be marketed and impact the quality of service and its value.

Government

Dealings with government departments which can include all or some levels of government from municipal, provincial, federal, to international.

Contractors, subcontractors, and suppliers

When companies don’t have the in-house expertise or lack of resources, the work is farmed out to contractors or subcontractors or suppliers.

How to analyze stakeholders?

All the potential stakeholders should be listed and analyzed by placing them into categories.  The classification of the stakeholders is important as the interest of every stakeholder will vary and some stakeholders will prove to be more than the others. This stakeholder analysis will decide about the frequency of communication with the select group of stakeholders and the information to be communicated.

The stakeholders can be broken down into four categories:

·  High power, highly interested people (Manage Closely): These stakeholders are the key players and should be engaged by making all efforts in satisfying them with regular updates.

·  High power, less interested people (Keep Satisfied): These stakeholders must be kept satisfied not so much and again not less to the point of boring with communication inflow.

·  Low power, highly interested people (Keep Informed): These stakeholders must be adequately informed and consulted with regard to their area of expertise to ensure no major problems arise.

·  Low power, less interested people (Monitor): These stakeholders must be monitored by informing about general information again, and should not be burdened with excessive communication.

Culture of Stakeholders

It is possible that project stakeholders may not share a common culture, in which case, the project management must adapt its work processes to cope with cultural differences. The cultural difference that can affect a project is of three major aspects: Communications, Negotiations and Decision making.

Communication is the most critical aspect of differences in culture as Project managers may come across barriers with regard to languages and context. When the same language is not shared between stakeholders, it slows down communication and project execution as information exchange ought to be accurate and fast. Usually, the “need-to-know” information that is critical to the project is shared. When project stakeholders represent a different culture, the cultural influence can cause confusion in communication, negotiation and decision making.

Managing Stakeholders

Projects often have more than one stakeholder. more the number of stakeholders, the greater are the challenges as it adds on to the stress and complexity levels of the project. The emotional investment of the stakeholder and their influence on the project execution can impact the outcome. how does it make it so complex? Project stakeholders more often than not tend to agree or disagree which adds on to the complexity, and larger the stake then more is their say and influence of the project. So it is very vital for the project manager to manage the stakeholders by amicably solving the situation or the conflicts arising out of agreement or disagreement. This is one of the foremost reasons as to why the project manager’s role is very challenging. 

How to Identify Project Stakeholders?

The process of stakeholder identification begins even before the project starts. The identification process starts no sooner the charter is approved by the sponsor.

Stakeholder identification is not a one-time exercise but a continuous process as new ones get introduced in the course of the project and old ones may pull out citing lack of interest. So this shuffle in terms of power and interest brings about the changes about the old and new stakeholders and hence it is important to identify and keep a tab about them.

Some of the techniques and documents that help in stakeholder identification are listed below:

• Project Charter
• Contract Documents
• Procurement Documents
• OPA and EEF
• Interview the Experts
• Brainstorming Sessions

Project Charter

A project charter contains the names of the project manager, sponsor, client, and key stakeholders.

Contract Documents

The contract agreement records the names of suppliers,  and contacts representing the customer who have a stake in the project.

Enterprise Environmental Factors And Organizational Process Assets

 The enterprise environmental factors and organizational process assets are sources to identify many stakeholders. Also,  the stakeholder register and lessons learned documents from past projects will also disclose the stakeholders involved in the project.

Interviews with Experts

There is no need to interview all the stakeholders. The most influential ones are interviewed to gain insight and information to understand their expectation as a stakeholder.

Try to ask open-ended questions during the interview and consider keeping one team member with you to record important information.

Brainstorming Sessions

Brainstorming with team members and experts is one of the best strategies in extracting information from the stakeholders. This exercise will help in identifying the stakeholders who wield considerable influence in the project execution and objectives.

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