What is Stakeholder Management

Stakeholder management is a critical component to the successful delivery of any project, program or activity. A stakeholder is any individual, group or organization that can affect, be affected by, or perceive itself to be affected by a program. 

Stakeholder engagement and stakeholder management are arguably the most important ingredients for successful project delivery for all teams, and yet are often regarded as a fringe activity, or not done at all. Stakeholder management is often considered as “managing up”, “marketing oneself” or “superfluous to my role”, so it is dropped as not being important to take action on during the scheme of day to day activities.  The reason it is so critical is because the more you involve and engage stakeholders in sharing about your project initiatives, the more you will uncover and reduce risks on your projects.

Product, Project & Program Managers depend on people to respond to the outputs and benefits that they deliver. However, all three roles frequently have no formal power of authority and; therefore, HAVE to rely on stakeholder relationships and engagement to achieve their objectives. 

Stakeholder Management is essentially a process, defined as: “the systematic identification, analysis, planning and implementation of actions designed to engage with stakeholders”, while Stakeholder Engagement is the practice of influencing a variety of outcomes through consultation, communication, negotiation, compromise, and relationship building. It can also be where you will learn about the pain points that stakeholders might be experiencing – or in sharing yours, find out why some things are happening. In doing this, you start to uncover opportunities for development of new features, workflows, project initiatives, etc. 

Stakeholders are your OPPORTUNITY PIPELINE! Lean in and spend time here and by building these relationships, you also get to implement things via influencing the right people, who will support what you do.

Who Is A Stakeholder? 

Now that you know how important Stakeholder management is, let’s begin with the basics of Stakeholder Management i.e. who is a stakeholder. A stakeholder is anyone who is likely to be impacted by a project. Broadly, stakeholders can be classified into “Internal Stakeholders” and “External Stakeholders”. 
Internal stakeholders are within your organization. They include your Project sponsor, Project owner, Project team, any person or team who gives inputs for the project or is benefitted by the outcome of the project. It also includes those who may be impacted negatively due to the project, e.g. some people who may have to re-skill due to automation or may have to be moved out. Lastly, it would include senior leaders, who need to be informed, or can offer further context. External stakeholders are outside your organization. These could be your vendors, customers, shareholders, Government, auditors, etc.

You need to identify all project stakeholders. The next step is to classify the stakeholders so that they can be involved appropriately and start communication with them on a regular basis. Communication may often have multiple dimensions that may need to be considered.

  • Internal (within your project) and external (vendors, customer, other projects, and organizations)
  • Formal (minutes, reports, briefings) and informal (memos, emails, ad-hoc discussions)
  • Vertical (between managers & subordinates in the organization) and horizontal (this is between peers)
  • Official (annual report, newsletters) and unofficial (communications which are off the record)
  • Written and oral – Verbal (involves voice inflections) and nonverbal (body language)

10 key Stakeholder Management Principles

  1. Communicate

Before aiming to engage and influence stakeholders, it’s crucial to seek to understand the people you will be working with and relying on throughout the phases of the project lifecycle. Sharing information with stakeholders is important, but it is equally important to first gather information about your stakeholders.

  1. Consult, early and often

A project, particularly in the early stages, may be unclear to its stakeholders for example, in terms of purpose, scope, risks and approach.  Early on and regular consultation is essential to ensure that requirements are agreed and a delivery solution is negotiated that is acceptable to the majority of stakeholders.

  1. Remember, they’re only human

Accept that humans do not always behave in a rational, reasonable, consistent or predictable way and operate with an awareness of human feelings and potential personal agendas. By understanding the root cause of stakeholder behavior, you can assess if there is a better way to work together to maintain a productive relationship.

  1. Plan it! 

A more conscientious and measured approach to stakeholder engagement is essential and therefore encouraged. Invest in careful planning, before engaging stakeholders. Always start with the creation of a stakeholder map, identifying who, how interested they are and how influential they might be to your project, what their pain points are, external, internal, senior leaders, what they are responsible for, then work your plan.

  1. Relationships are key

Developing relationships results in increased trust. And where there is trust, people work together more easily and effectively. Investing effort in identifying and building stakeholder relationships can increase confidence across the project environment, minimise uncertainty, and speed problem solving and decision-making.

  1. Simple, but not easy

Over and above conventional planning, using foresight to anticipate hazards, and taking simple and timely actions with stakeholders can significantly improve project delivery. 

  1. Just part of managing risk

Stakeholders are important influential resources and should be treated as potential sources of influence.

  1. Compromise

The initial step is to establish the most acceptable baseline across a set of stakeholders’ diverging expectations and priorities. Assess the relative importance of all stakeholders to establish a weighted hierarchy against the project requirements and agreed by the project Sponsor.

  1. Understand what success is 

Project success means different things to different people and you need to establish what your stakeholder community perceives success to be for them in the context of project delivery.

  1. Take responsibility

Stakeholder engagement is not the job of one member of the project team. It’s the responsibility of everyone to understand their role and to follow the right approach to communication and engagement. Good project governance requires providing clarity about stakeholder engagement roles and responsibilities and what is expected of people involved in the project.

In summarizing stakeholder management is important since it is the lifeline of effective project relationships. This needs to involve establishing a sound relationship and understanding how their work is contributing to project success. You need to establish trust and maintain relevance. Important stakeholders can provide constraints or requirements based on information from their industry.  This will help you understand the project risks (positive and negative) and constraints. The more you involve and engage stakeholders, the more you will uncover and reduce risks on your project. They help in:

  • Providing Expertise: Remember some stakeholders will have a wealth of knowledge. This could be on current processes, industry insight, or historical knowledge. Project managers may not be experts. Hence it is critical to have people who can provide expert advice.
  • Reducing Risks: The more you involve stakeholders the lesser risks you will have. During discussions on project requirements or constraints, they may come up with issues or concerns about meeting certain targets or needs. Uncovering such risks and discussing a strategy to mitigate them will dramatically increase the success of your project. 
  • Ensure Project Success (Increase Probability): By involving stakeholders in project requirements, you will get their “buy-in”. This will in turn help increase the probability of project success. Now, what if you can partially meet the requirements or say not meet certain stakeholders’ needs? These could be due to conflicting needs or priorities. Here is the chance to set expectations early in the project life cycle. Try some workaround if that helps. This will avoid any last-minute surprises. Will help you manage the relationship throughout the project, creating a Win-Win situation.
  • Getting Project acceptance and alignment: Regularly engage and involve stakeholders from the start. This will ensure you have a positive project conclusion. With this, the team members would have already known the delivery expectations, risks, and how to mitigate the risks. They would have reviewed draft deliverables in the process. The final acceptance and alignment across teams will be smooth during the project closure phase.