Stakeholders in Project Management

Your project’s success depends on the satisfaction of your project stakeholders. Sometimes, you have completed the project; the client has accepted all deliverables. However, the project is not successful because some of your stakeholders are not happy.

Stakeholder satisfaction is a sign of successful project completion.

Now, you might be wondering who the project stakeholders are and whom you have to satisfy for the successful completion of your project.

I am writing this blog post to answer these queries, and I hope to clear up any doubts you may have about project stakeholders

Stakeholders

According to the PMBOK Guide, “A stakeholder is an individual, group, or organization who may affect, be affected by or perceive itself to be affected by a decision, activity, or outcome of a project.”

Put more simply, a stakeholder is a person, a group of people, or an organization that has an interest in your project or is affected by its outcome, directly or indirectly. It may include project team members, project sponsors, organization members, and people outside of your organization.

If the project is small, you will have a few stakeholders. For a larger project, you may have a huge number of stakeholders, which may include communities or the public. In this case, managing stakeholders will be challenging.

For example, if you are going to construct a dam, the number of stakeholders will be large. They will include governments, local authorities, the population that is going to be displaced, the population living near the dam, environmentalists, the project management team, higher management, etc.

Not all stakeholders are equal. Everyone has different requirements and expectations. You should treat them according to their requirements and expectations. Failing to do so can jeopardize your project’s success.

If you understand stakeholders’ needs, expectations, and requirements, your chances of success increase. Overlooking any important stakeholder can make the situation more difficult for you at later stages of the project. It may cause a delay in the project, cost overrun, and in the most severe cases, abrupt project termination.

Types of Project Stakeholders

Project stakeholders can be grouped into two categories:

1. Internal Stakeholders

2. External Stakeholders

Internal Stakeholders

Internal stakeholders are within the organization. For example:

◉ A sponsor

◉ An internal customer or client (if the project is for an internal need of an organization)

◉ A project team

◉ A program manager

◉ A portfolio manager

◉ Management

◉ Another group’s manager (e.g., functional manager, operational manager, admin manager, etc.).

These stakeholders generally have the highest interest in the project’s success.

External Stakeholders

External stakeholders are outside the organization. For example:

◉ An external customer or client (if the project is a result of a contract)

◉ An end user of the project’s outcome

◉ A supplier

◉ Subcontractors

◉ The government

◉ Local authorities

◉ Local communities

◉ The media

As you can see, external stakeholders include clients, governments, and local authorities, and these are very powerful entities. Therefore, you have to manage them carefully.

Positive Stakeholders and Negative Stakeholders

Stakeholders can be positive or negative.

A positive stakeholder sees the project’s positive side and benefits from its success. These stakeholders help the project management team to complete the project successfully.

On the other hand, a negative stakeholder sees the outcome and may be negatively impacted by the project or its outcome. This type of stakeholder is less likely to contribute to the success of the project.

Many professionals think that competitors are also negative stakeholders as your project affects them as well. Please note that competitors are not negative stakeholders because you have to manage your stakeholders proactively to complete your project successfully, but you do not manage or fulfill your competitors’ requirements.

The public can be a stakeholder, as we have seen in the earlier example. In this case, it would be impractical to manage the whole population, so you will consult their public figures or leaders to understand their requirements and expectations. 

Some examples of this type of project are related to mining, the environment, roads, railways, dam building, etc.

Some stakeholders will have low interest or influence on your project. However, you have to manage them as well, because they could become influential stakeholders.

Source: pmstudycircle.com

Continue reading

Stakeholders in Project Management

It is imperative for you to identify all stakeholders at the beginning of the project and create a strategy to manage them for the success of your project. It will help you run the project with minimum obstruction because the sooner you identify them; the sooner you can start communication and involve them with your project. With this, they will feel connected to the project, can understand the benefit of your project, and will render support whenever you need it.

Your projects’ success depends on all your stakeholders are happiness.

It may happen that even though you have completed the project and the client accepts all deliverables, the project is not successfully completed because some of your stakeholders are not happy.

Therefore, it is imperative for you to keep all your stakeholders satisfied if you want to complete your project successfully.

Now many questions may arise such as: Who are the stakeholders and what types of stakeholders exist? Whom do you have to satisfy to complete your project successfully?

Therefore, I am writing this blog post to answer these types of questions, and I hope after reading it you will have answers to your queries regarding the project stakeholders.

Stakeholders

According to the PMBOK Guide “A stakeholder is an individual, group, or organization who may affect, be affected by or perceive itself to be affected by a decision, activity, or outcome of a project.”

In other words, you can say that a stakeholder is a person, group of people or an organization that has an interest in your project or is affected by its outcome either directly or indirectly; this may include your project team members, project sponsors, your organization members, and people outside of your organization as well.

The stakeholder list may be low if the project is small. However, if the project is large and spread out in a large geographical area, you may have a huge number of stakeholders, which may include communities or the general public.

All stakeholders are not equal; every stakeholder has different requirements and expectations. You should treat every stakeholder according to their requirements and expectations. Failing to do so can jeopardize your project’s success.

If you know every stakeholder, their needs, expectations, and requirements, it will increase the chance of the project’s success. If you miss any important stakeholder, you may face many difficulties in the later stages of the project such as delay in the project, cost overrun, and in the most severe cases, they may terminate the project.

Type of Project Stakeholders

Project stakeholders can be grouped into two categories:

1. Internal Stakeholders
2. External Stakeholders

Internal Stakeholders

Internal stakeholders are internal to the organization. For example:

◈ A sponsor

◈ An internal customer or client (if the project arose due to an internal need of an organization)

◈ A project team

◈ A program manager

◈ A portfolio manager

◈ Management

◈ Another group’s manager internal to the organization (e.g., functional manager, operational manager, admin manager, etc.).

External Stakeholders

These stakeholders are external to the organization. For example:

◈ An external customer or client (if project arose due to a contract)

◈ An end user of project’s outcome

◈ A supplier

◈ Subcontractors

◈ The government

◈ Local communities

◈ The media

Stakeholders can be positive or negative.

A positive stakeholder sees the project’s positive side and benefit from its success. These stakeholders help the project management team to complete the project successfully.

On the other hand, a negative stakeholder sees the negative outcome of the project and may be negatively impacted by the project or its outcome. This type of stakeholder is less likely to contribute to your success of the project.

I have been asked many times whether competitors are negative stakeholders. Please note that competitors are not negative stakeholders because you have to manage your stakeholders proactively to complete your project successfully, but you do not manage your competitors or fulfill their requirements; the objective of your project is not to meet your competitors’ requirements.

In some cases, the general public can be a stakeholder. In this case, it would be impractical to manage the whole population so you will consult their public figures or leaders to understand their requirements and expectations better. Some examples of this type of project are related to mining, the environment, road, rail, dam building, etc.

It is vital for you to identify your project stakeholders at a very early stage of the project.

Some of these stakeholders will have a minimum interest or influence on the project. However, you have to take care of them as well, because no one knows when they will become dominant stakeholders and if the dominant stakeholders will become less influential.

Continue reading

Project Stakeholder Management

Stakeholder Analysis and Mapping is done to map the interest of your stakeholders. It is a process of systematically analyzing and gathering qualitative information to determine whose interest should be taken into account.

Stakeholder Analysis and Mapping is important because it helps project leaders and managers to access a stakeholder's interest, positions, alliances and knowledge related to the project.

When Stakeholder Analysis need to be done?

Stakeholder analysis should always be done at the beginning of a project. Such analysis is helpful in the drafting of a log frame. Log frame is nothing but a general approach to project planning, monitoring, and evaluation in the form of a 'logframe matrix'. Whenever log frames are reconsidered during the life cycle of a project, a stakeholder analysis will be useful. Which means whenever mid-term reviews or annual monitoring is handled, stakeholder analysis should be the part of it.

Stakeholders Categorization

Stakeholders are categorized into two categories

Internal stakeholders	External stakeholders
Within the organization: Employees and Management	Outside the organization: Government & Trade Association

Process for Stakeholder Analysis

Following are the primary aspect needs to be considered for stakeholder analysis

Step 1) Identify your stakeholders: Your boss, your team, senior executives, prospective customers, your family, etc.

Step 2) Assess how those stakeholders could be impacted or have an effect on the organization

Step 3) Prioritize your Stakeholders-

StakeHolder Type	Action
High power, interested people	Manage closely
High power, less interested people	Keep satisfied
Low power, interested people	Keep informed
Low power, less interested people	Monitor with minimum effort

Step 4) Identify areas of conflicts (organization vs. stakeholder, stakeholder vs. stakeholder)

Step 5) Prioritize, reconcile and balance stakeholders

Step 6) Align significant stakeholder needs with organizations strategies and actions

Things to take care while dealing with stakeholders

◉ Could you eliminate processes, which do not add stakeholder value?

◉ How would you communicate with stakeholders?

◉ Do your communications encourage stakeholder exchange?

◉ Do you communicate the stakeholder the value of the deal?

Important questions to ask during Stakeholder Analysis Mapping

Different attribute check for stakeholder	Question to ask your stakeholders
Identification of stakeholder	Who is paying for the project? Who will receive the deliverables or profits from the project? Both from your organization and client organization who will work with you to implement the project? Identify the expert for the project domain in the organization.
Interest	What direct benefit do stakeholders expect to get from the project? What outcomes do stakeholders expect as a result of the project? What changes do stakeholders need to make as a result of the project? Are there any conflicts of interest amongst the stakeholders?
Influence	What legitimate authority do stakeholders have in the organization? Who controls the project assets and resources? What degree of influence or negotiation power do your identified stakeholders carry in the organization?
Impact	How much impact stakeholder could have on the project and does this going to affect the success of the project

Also, you need to figure out when stakeholders will become involved in the following-

◈ Project Vision

◈ Project Scope Definition

◈ Business Process Analysis

◈ Needs Elicitation

◈ Requirement Validation

◈ Design reviews

◈ User Acceptance Testing

You can create a "Participation Matrix Table" for the stakeholders as given below

Participation Type	Inform	Consult	Partner	Control
Needs Assessment
Planning
Implement
Monitoring & Evaluation

Tips to manage your Stakeholders

◈ Do not complain. Accept stakeholders as they are

◈ For guaranteed success, get the key leadership involved.

◈ Make sure, you involve your stakeholders early in the business analysis process

◈ In case of a sensitive issue, ensure full confidentiality to all stakeholders to win their trust.

◈ To avoid conflicts, help all stakeholders in realizing their personal gains from the project.

◈ Stakeholders mapping and analysis always helps.

Continue reading

What is a Stakeholder? How to Identify, Analyze and Manage Project Stakeholders

One of the first steps in project management planning is the identification of stakeholders. In order to accomplish this, you need to understand what a stakeholder is. Loosely defined, a stakeholder is a person or group of people who can affect or be affected by a given project. Stakeholders can be individuals working on a project, groups of people or organizations, or even segments of a population. A stakeholder may be actively involved in a project’s work, affected by the project’s outcome, or in a position to affect the project’s success. Stakeholders can be an internal part of a project’s organization, or external, such as customers, creditors, unions, or members of a community.

Depending on the complexity and scope of a project there may be very few or extremely large numbers of stakeholders. A project may be a part of a city or county public works department and may include all members of the community as stakeholders and number in the thousands. In determining what a stakeholder is, it is important that we consider anyone who may fall into any of these categories. As we move on toward stakeholder identification we must analyze the project landscape and determine what individuals or groups can influence and affect the project or be affected by its performance and outcome.

So what is a Stakeholder? Stakeholders can be:

◉ The project manager, sponsor, and team
◉ The customer (individual or organization)
◉ Suppliers of material or other resources
◉ Creditors
◉ Employees
◉ Unions
◉ City, community, or other geographic region
◉ Professional organizations
◉ Any individual or group impacted by the project
◉ Any individual or group in a position to support or prevent project success
◉ Internal or external; local or international

Stakeholder Identification

So now we have answered the question: what is a stakeholder? The next step is to use this knowledge to answer the question: who is a stakeholder? This question is answered during the stakeholder identification process. Stakeholder identification is the process used to identify all stakeholders for a project. It is important to understand that not all stakeholders will have the same influence or effect on a project, nor will they be affected in the same manner. There are many ways to identify stakeholders for a project; however, it should be done in a methodical and logical way to ensure that stakeholders are not easily omitted. This may be done by looking at stakeholders organizationally, geographically, or by involvement with various project phases or outcomes.

Another way of determining stakeholders is to identify those who are directly impacted by the project and those who may be indirectly affected. Examples of directly impacted stakeholders are the project team members or a customer who the project is being done for. Those indirectly affected may include an adjacent organization or members of the local community. Directly affected stakeholders will usually have greater influence and impact of a project than those indirectly affected. While these details are developed and analyzed further in the Stakeholder Analysis process, it is important to begin thinking about them now and helps provide a systematic way to identify stakeholders.

An outcome of identifying stakeholders should be a project stakeholder register. This is where the project team captures the names, contact information, titles, organizations, and other pertinent information of all stakeholders. This is a necessary tool during Stakeholder Management and will provide significant value for the project team to communicate with stakeholders in an organized manner.

Stakeholder Analysis

Now that you’ve conducted the Stakeholder Identification process you should have a comprehensive list of all of the project stakeholders. If you’ve used one of the approaches we’ve discussed you should also have them grouped by geographic region, organization, project involvement, or whether or not they’re directly or indirectly impacted by the project. While stakeholder analysis is done for each individual stakeholder, these groupings are helpful in determining the level of detail required in this process.

The stakeholder analysis process requires a close look at each stakeholder to gather more in depth information in order to understand their impact, involvement, communication requirements, and preferences. Is this stakeholder organized? Are they a cohesive organization? Do they support this project or are they critical of it? How influential or powerful are they? Do they prefer to be notified via phone call or email? How often? What is this stakeholder’s interest in this project? These are the types of questions that must be answered in order to provide a complete analysis. Usually a chart or table is used to capture all of this information with stakeholders’ names listed one per row and a list of column headings addressing the types of questions asked above.

Many times a project team will create the stakeholder analysis by using the stakeholder register and simply adding a greater level of detail to each entry. It is recommended to leave these documents separate and create a stakeholder analysis independent of the register. The analysis may contain information that should not be distributed freely to all of the stakeholders as the register should be. In addition to the general information contained in the stakeholder register, the stakeholder analysis contains.

Stakeholder Management

Stakeholder Management is where you will use all of the information you’ve collected and develop a strategy to manage stakeholders. No matter how much you plan or how invested you are in a project, poor stakeholder management can easily cause a project to fail. It is a key component of executing and completing a successful project. A large portion of stakeholder management focuses on communication.

The cornerstone of stakeholder management is understanding who needs what information and when or how often they need it. There will also be stakeholders who support the project and those who may either be opposed to it or who present obstacles to the project’s success. Your stakeholder management strategy must be geared toward maintaining support from those who are in favor of the project while winning over those opposed or at least mitigating the risks they may present.

The questions you’ve asked and answered about each stakeholder in the Stakeholder Analysis process are your guide for how to interact with each stakeholder and satisfy their individual requirements. By determining how powerful a stakeholder is and whether or not they support or oppose the project will allow the project manager to create a strategy for communicating and working with that stakeholder to ensure project success. Some stakeholders may require little interaction or communication while some require nearly constant communication. Stakeholder Management is where these strategies are developed and executed. If a stakeholder is opposed to a project maybe it is because they seek more involvement or awareness and the project manager can work with that individual to win their favor and support.

By understanding what a stakeholder is and using a thorough and systematic approach to Stakeholder Identification, Analysis, and Management, a project manager can significantly improve his or her chances of success. As projects become more complex and involved, so does managing their stakeholders. It is easy to lose track or omit key project players and by not properly utilizing these processes and tools project managers will lose their ability to effectively communicate with stakeholders in a manner necessary to ensure a successful project.

Continue reading