Project Stakeholder Management : Best
Practice Strategy for Project Communication
Management
- Dr. Kirti Rajhans
Top 10 Reasons for Project Success
1. User Involvement
2. Executive Support
3. Clear Business Objectives
4. Emotional Maturity
5. Optimization
6. Agile Process
7. Project Management Expertise
8. Skilled Resources
9. Execution
10. Tools and Infrastructure
The Standish Group, “CHAOS, 2010: CHAOS Success Factors”
2
User Involvement
Business communications – talking to the
users in their language and customs. Making
sure that users express their opinions, makes
a difference.
• Quality relationship – creating a
cooperative environment with mutually
agreeable ground rules for effective
teamwork.
• Expectation management – starts with
established quality and achievable metrics. Make
sure users know what is expected of them as a part
of the team.
3
Importance of stakeholders
Your project will only be considered successful if its key stakeholders
perceive the project’s outcome as a success.
These perceptions of success or failure are heavily influenced by the
effectiveness of the project’s communications, and relationships with its
stakeholder community, particularly those in management or decision-
making roles.
Successful project managers understand this and are willing to do
whatever is necessary to ensure that this group of stakeholders
understands the project’s needs and are prepared to support it to its
(successful) conclusion.
This requires the project manager to be skilful at advising upwards,
using effective stakeholder management techniques to engage the
support of senior executives and to manage their expectations.
Role of Stakeholders in Projects
Project management, revolves around understanding and meeting client
expectations.
Even the most efficiently completed project will not count as a success if
the client and other important stakeholders are unhappy with the results.
Project stakeholders can often exert considerable influence over the
success of the project with their expertise, political influence, and
additional resources, an essential element of such a plan will be on how
to motivate the client to contribute to the team’s success throughout
the life of the project.
Stakeholders have the power to declare whether your project was
successful or not, hence managing stakeholder expectations is an
important part of the project manager’s job.
Definition - Stakeholder
STAKEHOLDER
“Person or organization (e.g., customer, sponsor,
performing organization, or the public) that is actively
involved in the project, or whose interests may be
positively or negatively affected by execution or
completion of the project. A stakeholder may also exert
influence over the project and its deliverables.”
PMBOK® Guide, Fourth Edition
6
Common Stakeholders?
Common project stakeholders: Other stakeholders:
◦ Project manager ◦ Functional managers
◦ Project team members ◦ Government agencies/regulators
◦ Customers ◦ Suppliers and
◦ Performing organization vendors/subcontractors
◦ Central staff ◦ Resource managers
◦ Project sponsor ◦ Senior management
◦ News media
◦ Special interest groups
◦ Community
Internal versus External ◦ Users
◦ Shareholders
7
Types of Stakeholders
Internal project stakeholders generally include the project
sponsor, project team, support staff, and internal customers for the
project. Other internal stakeholders include top management, other
functional managers, and other project managers
External project stakeholders include the project’s customers (if
they are external to the organization), competitors, suppliers, and
other external groups that are potentially involved in the project or
affected by it, such as government officials and concerned citizens
Common Stakeholders
Project manager - the individual ultimately responsible for managing and leading the
project to its successful conclusion
Sponsor (or client or owner) - the individual, group or organisation that provides the
financial resources, in cash or in kind, for the project
Project board (or steering committee) – directs the project on behalf of the sponsor,
and makes sure that everything goes according to plan
Finance providers - provide the finances required by the project over and above that
contributed directly by the client
Project champion - someone who strongly supports the project and communicates
enthusiasm and charisma about it to others
Consultant - provides specialist advice, information and consulting services for a fee
Performing organisation - the organisation or organisations whose employees are
most directly involved in doing the work of the project
Customer (or end user) - the individuals or organisation who will use the end product.
The terms 'sponsor', 'client' and 'customer' are sometimes used indiscriminately,
however, sponsor and client usually refer to whoever is paying for the project, while
customer usually means the end \ user of the project's end products or services
Project support office - where present, supports the project team as required with
requests for information and training.
Managing the needs of the stakeholders
All projects have a client, an end user (who might be different from the client) and
possibly a number of other external stakeholders (such as suppliers and
subcontractors). Such parties have expectations of the project which the project
manager must seek to meet and it is often the case that they all want something
different.
Establishing who the stakeholders are in a project and what they really want is never
simple. The first thing to do is to ask lots of questions. People are rarely clear in their
first pronouncements and a good project manager can rapidly build credibility by
helping them to clarify their ideas.
Another aspect of this leadership role is to point out where their expectations clash
with those of others and encourage the parties to talk, to try to resolve areas of
conflict.
When developing a new product, for example, reconciling the expectations of finance
directors, design engineers, production people, marketing and customers involves many
leadership skills. The project manager often acts as a broker or negotiator to try to find
a best-fit formula that meets as many needs as possible.
Stakeholders in Construction
There are stakeholders in construction undertakings, just as there are
stakeholders in other endeavors.
The checklist of stakeholders in a construction project is often large and
would include the owners and users of facilities, project managers,
facilities managers, designers, shareholders, legal authorities, employees,
subcontractors, suppliers, process and service providers, competitors,
banks, insurance companies, media, community representatives,
neighbours, general public, government establishments, visitors,
customers, regional development agencies, the natural environment, the
press, pressure groups, civic institutions, etc.
Each of these would influence the course of a project at some stage. Some
bring their influence to bear more often than others. If diverse
stakeholders are present in construction undertakings, then the
construction industry should be able to manage its stakeholders.
PROJECT STAKEHOLDER MANAGEMENT
Project Stakeholder Management includes the processes required to
identify the people, groups, or organizations that could impact or be
impacted by the project, to analyze stakeholder expectations and their
impact on the project, and to develop appropriate management
strategies for effectively engaging stakeholders in project decisions and
executions.
Project Stakeholder Management process includes the following
Stakeholder
Stakeholder Control Engagement
Identify Stakeholders Plan Manage Stakeholders
Management
Identifying Stakeholders
Identify what will change due to this project, to help you
identify potential influencers. Whatever is going to change,
that change will likely influence one or more people or groups, so
they will need to appear on your influencer list.
For example:
New product, line of business
New customer group served
New internal business/operational processes
Changes to project priorities
Resource reallocations among projects
Hiring needed in some groups
Changes in customer relationships
Identify Stakeholders
It is the process of identifying the people, groups, or organizations that could impact or be
impacted by a decision, activity, or outcome of the project, analyzing and documenting
relevant information regarding their interests, involvement, interdependencies, influence
and potential impact on project success. The key benefit of this process is that it allows
the project manager to identify the appropriate focus for each stakeholder or group of
stakeholders. The inputs, tools and techniques, and outputs of this process are depicted
below
Inputs Tools and Techniques Outputs
• Project charter • Stakeholder analysis • Stakeholder register
• Procurement • Expert judgment
documents • Meetings
• Enterprise
environmental
factors
• Organizational
process assets
Fig. source: PMBOK®
Tools and Techniques of Stakeholder management
1. Stakeholder Analysis
Stakeholder analysis is a technique of systematically gathering
and analyzing quantitative information to determine whose
interests should be taken into account throughout the project.
It identifies the interests, expectations, and influence of the
stakeholders and relates them to the purpose of the project.
It also helps to identify stakeholder relationships (with the
project and with other stakeholders) that can be leveraged to
build coalitions and potential partnerships to enhance the
projects chance of success, along with stakeholder
relationships that need to be influenced differently at different
stages of the project or phase.
Tools and Techniques of Stakeholder management
Steps of Stakeholder Analysis
• Identify all potential project stakeholders and relevant information, such as
their roles, departments, interests, knowledge, expectations, and influence
levels. Key stakeholders are usually easy to identify.
• They include anyone in a decision-making or management role who is
impacted by the project outcome, such as the sponsor, the project manager,
and the primary customer. Identifying other stakeholders is usually done by
interviewing identified stakeholders and expanding the list until all potential
stakeholders are included.
• Analyze the potential impact or support each stakeholder could generate,
and classify them so as to define an approach strategy. In large stakeholder
communities, it is important to prioritize the stakeholders to ensure the
efficient use of effort to communicate and manage their expectations.
• Assess how key stakeholders are likely to react or respond in various
situations, in order to plan how to influence them to enhance their support
and mitigate potential negative impacts.
Tools and Techniques of Stakeholder management
Expert Judgment
To ensure comprehensive identification and listing of stakeholders, judgment
and expertise should be sought from groups or individuals with specialized
training or subject matter expertise, such as:
• Senior management;
• Other units within the organization;
• Identified key stakeholders;
• Project managers who have worked on projects in the same area (directly or
through lessons learned)
• Subject matter experts (SMEs) in the business or project area;
• Industry groups and consultants; and
• Professional and technical associations, regulatory bodies, and
nongovernmental organizations (NGOs).
Meetings
Profile analysis meetings are project meetings designed to develop an
understanding of major project stakeholders, and they can be used to
exchange and analyze information about roles, interests, knowledge, and the
overall position of each stakeholder facing the project.
Classifying Stakeholders
After identifying key project stakeholders, you can
use different classification models to determine an
approach for managing stakeholder relationships
A power/interest grid can be used to group
stakeholders based on their level of authority
(power) and their level of concern (interest) for
project outcomes
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Stakeholder Analysis
➢ A technique of systematically gathering and analysing
quantitative and qualitative information to determine
whose interests should be taken into account
throughout the project.
➢ Classification tools
➢ Power/interest grid
➢ Power/influence grid
Classification Models used for Stakeholder
Analysis
Power/interest grid, grouping the stakeholders based on their
level of authority ("power") and their level or concern
("interest") regarding the project outcomes;
Power/influence grid, grouping the stakeholders based on their
level of authority ("power") and their active involvement
("influence") in the project;
Influence/impact grid, grouping the stakeholders based on their
active involvement ("influence") in the project and their ability
to effect changes to the project's planning or execution
("impact"); and
Salience model, describing classes of stakeholders based on
their power (ability to impose their will), urgency (need for
immediate attention), and legitimacy (their involvement is
appropriate).
Power/Interest Grid
High
• Step 1: Identify all potential project
stakeholders and relevant Keep Manage
Satisfied Closely
information •D
•F
• Step 2: Identify the potential impact
Power
•C •G •A
or support each stakeholder could
•H
generate and classify them so as •B
to define an approach strategy. Monitor Keep
(Minimum Effort) Informed
• Step 3: Assess how key
stakeholders are likely to react or •E
respond in various situation Low
Interest High
Sample grid showing classification model
Power/Interest Grid
Power/Influence Grid
The Primary
directions of
influence
Power/Interest Grid for Stakeholder
Prioritization
High power, interested people: these are the people you must fully
engage and make the greatest efforts to satisfy.
High power, less interested people: put enough work in with these
people to keep them satisfied, but not so much that they become bored
with your message.
Low power, interested people: keep these people adequately informed,
and talk to them to ensure that no major issues are arising. These
people can often be very helpful with the detail of your project.
Low power, less interested people: again, monitor these people, but do
not bore them with excessive communication.
The position/importance matrix for project stakeholders
Importance of Managing expectations:
There are often many stakeholders in a project and dissatisfied or disillusioned stakeholders can
cause a project to fail. Managing stakeholder perceptions and expectations is about generating
agreement and harmony between the different views and beliefs held by the stakeholders. It is very
difficult for a project manager to be sure of the thoughts, feelings and attitudes of a project's
stakeholders. When all the stakeholders are 'dancing to the same tune', the project moves towards a
successful outcome. One of the amazing wonders of nature is the way that insects such as ants,
termites, and wasps can create intricate, delicate and wonderfully made structures. These 'projects'
are executed successfully despite varying conditions and all manner of natural obstacles in their way.
At each stage in these projects, hundreds or thousands of 'project participants' seem to know what
to do, when and where; and seem able to make their own micro-contribution fit within a single
overall project objective.
The Impact of Stakeholders On the project
Once the stakeholders and their expectations have been identified, they can be organised by mapping
them in relation to their likely impact on the project. For example, it is important to know:
1. whether or not they are likely to support or oppose the project
2. the power and means available for them to do so
3. the predictability of their behaviour and expected level of interest in the project.
Matrix of stakeholder power versus predictability
Key questions that can help you understand
your stakeholders
What financial or emotional interest do they have in the outcome of your work?
Is it positive or negative?
What motivates them most of all?
What information do they want from you?
How do they want to receive information from you? What is the best way of
communicating your message to them?
What is their current opinion of your work? Is it based on good information?
Key questions that can help you understand
your stakeholders
Who influences their opinions generally, and who influences their
opinion of you? Do some of these influencers therefore become
important stakeholders in their own right?
If they are not likely to be positive, what will win them around to
support your project?
If you don't think you will be able to win them around, how will you
manage their opposition?
Who else might be influenced by their opinions? Do these people
become stakeholders in their own right?
Benefits of using a stakeholder-based
approach
You can use the opinions of the most powerful stakeholders to shape
your projects at an early stage. Not only does this make it more likely
that they will support you, their inputs can also improve the quality of
your project.
Gaining support from powerful stakeholders can help you to win more
resources – this makes it more likely that your projects will be
successful.
By communicating with stakeholders early and frequently, you can
ensure that they fully understand what you are doing and understand
the benefits of your project – this means they can support you actively
when necessary.
You can anticipate what people's reaction to your project may be, and
build into your plan the actions that will win people's support.
Sample Communications Planning
Matrix
Stakeholder Role What? When? How? Response
Internal
Scope
Tom, Dick, Harry Developer Kickoff Meeting Acceptance
Statement
External
Statement of
Jack, Jill Contractor Week 3 Meeting Bid
Work
…
Stakeholder Register
A stakeholder register includes basic information on
stakeholders:
◦ Identification information: The stakeholders’ names, positions,
locations, roles in the project, and contact information
◦ Assessment information: The stakeholders’ major requirements
and expectations, potential influences, and phases of the project in
which stakeholders have the most interest
◦ Stakeholder classification: Is the stakeholder internal or external
to the organization? Is the stakeholder a supporter of the project or
resistant to it?
Outputs of Identifying Stakeholders Process
Stakeholder Register
Contact Role in
Department/ Main Attitude about Major
Name Informatio Project Company Impact Influence
Supervisor expectations the project requirement
n
• Stakeholder Management Strategy
Stakeholder Stakeholder interest(s) in Assessment of impact Potential strategies for gaining support
the project or reducing obstacles
Sample Stakeholder Register
Project Stakeholder Management Processes
Identifying stakeholders: Identifying everyone involved in the project
or affected by it, and determining the best ways to manage relationships
with them.
Planning stakeholder management: Determining strategies to
effectively engage stakeholders
Managing stakeholder engagement: Communicating and working
with project stakeholders to satisfy their needs and expectations,
resolving issues, and fostering engagement in project decisions and
activities
Controlling stakeholder engagement: Monitoring stakeholder
relationships and adjusting plans and strategies for engaging stakeholders
as needed
Project Stakeholder Management Processes
Stakeholder Relationship Complexity
Stakeholder stability over time
Degree of public interest in the project
Degree of cultural diversity
Percent of staff able to converse fluently in the project’s
primary language
Range of time zones with active stakeholders
37
Issue Logs
Understanding the stakeholders’ expectations can help in
managing issues
Issues should be documented in an issue log, a tool used
to document, monitor, and track issues that need
resolution
Unresolved issues can be a major source of conflict and
result in stakeholder expectations not being met
Issue logs can address other knowledge areas as well
Sample Issue Log
Best Practice
Project managers are often faced with challenges, especially in
managing stakeholders
Sometimes they simply cannot meet requests from important
stakeholders
Suggestions for handling these situations include the following:
◦ Be clear from the start
◦ Explain the consequences
◦ Have a contingency plan
◦ Avoid surprises
◦ Take a stand
Controlling Stakeholder Engagement
You cannot control stakeholders, but you can control their
level of engagement
Engagement involves a dialogue in which people seek
understanding and solutions to issues of mutual concern
It is important to set the proper tone at the start of a
project
Stakeholder Analysis Checklist
Multiple Dimensions
Item Description
Identify enterprise environmental factors What are your particular organizational culture, structure,
market conditions, infrastructure, and political influences?
Create the stakeholder register Who is affected by or could impact the project? Includes
roles and personality types.
Conduct a stakeholder analysis Create the matrices of influence and interest, agreement
and trust, to inform PM focus.
Identify organizational assets Leverage policies, procedures, lessons, experts, and power
sources.
Create your approach to handling Your action plan to include influencing tools.
stakeholders
Sensitive Information
As a stakeholder management plan often includes sensitive
information, it should not be part of the official project documents,
which are normally available for all stakeholders to review
In many cases, only project managers and a few other team
members should prepare the stakeholder management plan
Parts of the stakeholder management plan are not written down,
and if they are, distribution is strictly limited
Sample Stakeholder Analysis
Summary:
Project Stakeholder Management
The process of identifying all people or organizations impacted by the project,
and documenting relevant information regarding their interest, involvement,
and impact on project success.
Inputs Tools & Outputs
Techniques
1. Project charter 1. Stakeholder register
1. Stakeholder analysis
2. Procurement 2. Stakeholder
2. Expert judgment
documents management strategy
3. Enterprise
environmental factors
4. Organizational process
assets
