When it comes to project management, you cannot run away from stakeholder management. Taking care of your project stakeholders can greatly increase the odds of success for your projects. But what is stakeholder management anyway?
Stakeholder management is a set of processes and tools where you identify, understand, and engage with your stakeholders to manage their expectations, needs, and feelings. Stakeholders are people or parties that impact your project or work. The goal is to ensure that the stakeholders influence your project positively.
This article explores what stakeholder management is. We will also look into how you can develop a stakeholder management plan by following several simple steps.
What Is Stakeholder Management?
Stakeholder management refers to a series of ongoing processes where you organize, engage, and improve the relationships with your project’s stakeholders.
According to the PMI (Project Management Institute), stakeholders refer to the people, parties, or organizations that may have an interest in your project. They also play a part in influencing the direction and outcome of it in some way.
A stakeholder is…
- an individual, group, or organization that
- may affect, be affected by, or perceive itself to be affected by a
- decision, activity, or outcome
…of a project.
(Definition of a Stakeholder according to the PMBOK Guide)
Take, for example, a sponsor for your project. This person will be a very important stakeholder in your project. You would want to manage your sponsor well and ensure you have their support.
Stakeholder engagement is considered one of the main parts of project management and greatly influences the success of your projects and work.
Many discussions about stakeholder management tend to treat the subject as ‘how to treat stakeholders, to get what you want out of them.’ This approach may feel like you are herding sheep, which is contrary to human nature. All stakeholders actually pursue their own goals.
Also, such an episodic approach to stakeholder management does not bode well long term. Instead, we will try to present a more consistent and predictable stakeholder management style where you stay engaged long-term.
Your job is to align their goals to your project and then encourage them to take actions that contribute to the success of your project and their own as well. This may mean you and the stakeholder may be ‘using’ each other. Still, it is, after all, a ‘win-win’ proposition that everybody should agree to.
We will also look at stakeholder management, not as a one-off effort, but as something you continue to do long term.
Stakeholder Management According to PMI (Project Management Institute)
| PMI’S PMBOK GUIDE PROCESSES | REAL WORLD ACTIVITIES |
|---|---|
| 13.1 Identify Stakeholders | Conduct interviews with peers. Conduct interviews with project owners. Brainstorm with the project team. Review industry standards. Analyze stakeholders. Log your findings in Stakeholder Register. |
| 13.2 Plan Stakeholder Engagement | Write out engagement plans for the top 20% of stakeholders. Collaborate with leadership on “difficult” cases. Develop empathy. Develop business acumen. |
| 13.3 Manage Stakeholder Engagement | Continuously build relationships with people in your company. Find supporters to help with difficult people. Interact with stakeholders following your plan. Continuously log the results of your interactions. Adjust engagement plans when needed. |
| 13.4 Monitor Stakeholder Engagement | Review engagement plans. Review stakeholder register. Log risks when appropriate in the Risk Register. Identify new stakeholders. Redo stakeholder analysis from time to time. |
Why Should You Care About Stakeholder Management?
Knowing your stakeholders allows you to plan how to engage them well. You should harness their energy and resources and channel these to your projects. If you manage them properly, stakeholders can easily propel your project to success.
Projects are rarely executed solely by a project team. Many projects out there are complex and may require skills beyond what you have in your team. You cannot simultaneously be a project’s chief cook, server, busser, and bottle washer.
Aside from that, most projects will eventually affect others, which may benefit or suffer negatively.
This means you need to see stakeholder management as crucial – it helps you to develop, maintain, and sustain good relationships with other stakeholders related to your project.
If you invest time and energy in stakeholder management, you can quickly identify and prioritize the stakeholders involved. You can then decide their interests and see how you can align them with your projects. With this in mind, you can work on an engagement strategy with them.
These stakeholders often have the ability and authority to positively or negatively affect your project. Suppose you can identify and engage with them. In that case, you can point their energy, ability, and expertise in the right direction for your project.
Aside from that, you can also ensure that these stakeholders are not doing things that may negatively affect your project and other stakeholders. Instead, you want the stakeholders to use their skills and abilities to help your project.
A well-planned, thought-out, and executed stakeholder management plan can do more than make a project successful. It can also mitigate risks and eliminate potential pitfalls and delays on your project.
A good stakeholder management plan also can bring in information that could be useful for the project outcome. This allows you and your organization to develop ideas and products that may benefit your clients, generate goodwill and revenue.
Another reason to take stakeholder management more seriously is due to the increasingly litigious society we are in today. Having a sound stakeholder management strategy and plan allows any friction and misalignment of interests to be ironed out.
This prevents issues from becoming major disputes, resulting in drastic steps such as lawsuits. Lawsuits generally are expensive and may negatively affect the success of most projects.
How To Manage Stakeholders Well?
Managing stakeholders well requires you to first realize that each stakeholder comes with expectations, feelings, insecurities, etc. You must handle these issues well, by using systematic approach to manage stakeholders in your project.
Managing stakeholders is not something you take an ad-hoc approach to. You want to develop a proper strategy to take on the task and stick to it as your project progresses.
This is because stakeholders are not robots or dead objects. They are often individuals, parties, groups, or organizations that may look at your project with certain expectations, feelings, concerns, insecurities, and many more.
These are powerful drivers, and if not managed well, they may act on their concerns, which may hurt your project.
For example, you are managing a project where you distribute free lunches to underprivileged students in a school. One of the stakeholders would be the school cafeteria operator, who may feel that your projects are causing them to lose sales and business.
If you do not manage their concerns, they may act in ways that may hurt your project. For example, protesting the school principal or superintendent to stop your free lunch project.
Managing these feelings and concerns from stakeholders requires a systematic approach. This helps you to better control and manage these stakeholders. Aside from that, having a system helps you to decide, log, and monitor the progress of the stakeholders, as you engage with them.
How To Set Up A Stakeholder Management Plan?
Setting up a stakeholder management plan requires you to think about your stakeholders before creating a stakeholder register. Then you think about how you would approach and engage them, to manage their expectations and concerns.
Setting up a stakeholder management plan is not rocket science. However, it is also not something you want to take lightly, as there is a systematic way to approach it.
You begin by thinking about how detailed you want to go with your planning before identifying your stakeholders. Then you try to understand things from their perspective before settling on an engagement plan.
Step 1: How Detailed Should The Plan Be?
Start by thinking about your project, and look at its scale. For smaller or simpler projects, chances are it may not involve many parties, individuals, or organizations. This means you may not really need a serious stakeholder management plan.
Suppose you are working on a construction project building a condominium tower. In that case, you will need the most extensive stakeholder management plan.
This is because projects like this will involve many stakeholders, such as buyers, municipal councils, sub-contractors, material suppliers, nearby property owners, and more.
A detailed stakeholder management plan will help you to identify, manage, engage, and track them well. Smaller projects may only require a simpler approach.
You should decide on the stakeholder register template at this point. The methodology you’ll select will dictate the information you need to collect.
Step 2: How to Identify Stakeholders
Once you have decided on the necessity and detail level of your stakeholder management plan, your next step is to identify the stakeholders involved in your project.
There is no magic shortcut in this part. You need to brainstorm and examine your project from multiple angles and identify people, parties, or organizations that:
May Impact The Project By Providing Requirements: Consider how municipal councils may come in and dictate the size of your septic tank when building your new home.
Can Impede The Project By Some Action or Inaction: Suppose you run a free lunch program for underprivileged students. Think about how a school cafeteria operator may protest to the school administration to stop it.
Is Affected By The Project’s Progress Or Its Result: Suppose you are building a condominium tower. Traffic congestion may affect local residents since trucks come in and out, deliver concrete, take up road space, and slow down traffic.
Thinks That The Project May Impact Them: Suppose you are developing an AI program to render graphics. You may want to involve graphic artists as stakeholders in your project since you will negatively impact them.
Generally, many project teams may approach this task by discussing it within the team before reaching out to the leadership. If the project involves clients, you can also discuss this with your client.
Here are some common questions you can ask yourself or your team to get started in identifying stakeholders.
- Who can help with our project?
- Who might be interested in our project?
- Who must be involved? Are there any mandatory processes?
- Who may be against our project?
- What drawbacks might the project have for others?
Step 3: Capture Everything in a Stakeholder Register
Once you have identified your stakeholders, you can put them into a document. This document is often called the stakeholder register.
The contents and complexity of the stakeholder register depend on the needs of your project. It might be fairly simple. Or it can be a comprehensive document that describes all aspects of a stakeholder. For example, you may want to include the following:
Full Name: Just write the name of the person or organization of the entity. In case the name is in a foreign language, consider putting a phonetic transcript. Also, consider bolding the preferred name since some names may not have a surname.
Department: next to their name, add the department or the organization the stakeholder belongs to.
Location: Consider this if you have stakeholders in different cities or countries. If there are time differences, add that in as well.
Role On The Project: List down the stakeholder’s responsibility to the best ability that you can. If there is an official document listing their tasks, use that as your reference.
Preferred Method Of Communication: Not everyone is comfortable using email, and some countries may rely on things such as instant messaging to get things done. Check and confirm this.
Power: This reflects this stakeholder’s authority level to impose its will on the project. Job title, expert knowledge, and reputation can be used to judge a stakeholder’s power.
Impact: How can this stakeholder be able to change the project’s planning of execution? The impact is different from power in that it shows the ability of the stakeholder to move the project forward.
Involvement: How willing and eager is this stakeholder to participate and contribute positively to your project? Write them down here.
Expectations: Think realistically and see what this stakeholder wants to achieve by interacting with your project. Think using the WIIFM acronym (What’s in it for me?)
Engagement Strategy: You will not decide on an action plan to engage with this stakeholder. More on this later.
One crucial part of your stakeholder register is to treat the document with confidentiality. It should not be shared with anyone outside; only necessary people should see it.
This is because it contains the contacts and personal information of your stakeholders. Also, you do not want people to see what you think about your stakeholders.
Step 4: Prioritize Your Stakeholders
The next stage is to look at your list of stakeholders and then work with the top 20% of them. These top 20% of stakeholders would be the ones you believe would influence your project the most.
They could be funders, government bodies, the leadership of you or your client’s organizations, and many more.
The idea here is to apply the 80/20 rule in your stakeholder management. You can consider that 20% of the stakeholders in your register may affect 80% of your project’s success.
Plus, when you think about it, you only have 24 hours a day. With 8 spent sleeping and the other 8 on personal life, you only have 8 more to spend on work. Engaging all stakeholders is close to impossible.
This means you should focus on engaging and working with the top 20% of stakeholders to produce the best result for your effort.
Step 5: Plan Stakeholder Engagement
Now that you have decided on your top 20% of stakeholders, you need to go deeper into each of them and plan how you will engage with them.
This requires you to strategically think about several things listed below. You can create a separate document for each of the stakeholders and keep them together with your stakeholder register.
The Stakeholder’s Expectations: Write down what you think the stakeholder is expecting from your project. For example, perhaps Steven expects that working hard on your project will help him to reach his KPI (Key Performance Indicators). He could then use this to push for promotion.
How Much You Desire The Stakeholder To Engage With Your Project: Some stakeholders, although important, should be best kept at a distance. However, you may want some to be very involved, as they have a lot of impacts.
For example, suppose you have personality issues with Steven and want him less in your project. You can write, “Keep engagement down to weekly email updates, not inviting to team meetings.”
Engagement Plan: In this section, list your actions to get your stakeholder to the engagement level you desire. Generally, the more engaged you want them to be, the more direct and frequent your actions will be. You can decide anything from daily phone calls to bi-weekly report updates.
Step 6: Manage and Monitor Stakeholder Engagement
Now that you have a plan, you must follow it! Below the engagement plan, you want to keep a chronological log of all your interactions.
Engagement Log: As you engage with your stakeholders, you need to track patterns of their behavior. This means at the end of every engagement, consider writing down what you observed from the stakeholder in an engagement log.
Is the stakeholder concerned? Satisfied? Showing signs of hostility? Or losing interest in your project? Write them down so you can take suitable actions to nudge the stakeholder in the right direction.
Your goal is to harness a stakeholder into the engagement level and model of behavior you need for the project. So, you need to monitor whether your initial plan actually works. If not, consider adjusting the plan.
Conclusion: What is Stakeholder Management in the Real World?
Unfortunately, this article was just one piece of a complex project stakeholder management framework: Many other processes happen before and after this one.
If one part doesn’t work, the whole system breaks.
My Stakeholder Management Plan Template connects all processes and tools into one cohesive system. It also provides access to other articles and videos on stakeholder management.
Don’t put your projects and reputation at risk. Ensure you know how stakeholder management works in the real world.
All successful project managers know it’s better to learn from someone else’s experience (aka lessons learned). Tap into my 12 years of practical IT experience and get the Stakeholder Management Plan Template.