Stakeholder management is the controlling and directing of people, organizations, or institutions that have some level of investment and are affected by the deliverables and benefits of a business process or undertaking. According to Project Manager, Project stakeholders may be either internal or external, but in any case, they want to benefit from the project’s outcome. Therefore, stakeholder management is fundamental for a successful project.
Several aspects of program administration cater to stakeholders:
- Identifying
- Analyzing
- Planning
- Controlling
These steps all have impacts on the outcome of projects. We must note that stakeholder relationships can positively or negatively impact the project result, depending on how it is managed. When stakeholders are managed effectively and efficiently, the project execution is more seamless and guarantees a greater chance of success.
The Relationship Between Stakeholder Management and Project Administration
Addressing the expectations and needs of all stakeholders connected with a project is what stakeholder management does. Whether these relationships are favorable or unfavorable affects the life cycle of the project.
This relationship can be likened to passengers heading to a destination on a bus, as in the scenario above. The project manager is the driver, and the intended project outcome is arriving at the destination safely and on time. The passengers in the bus are the stakeholders and are heavily invested in the project; they have paid fares, booked tickets, arranged their schedules, etc, to make it to that destination on time and safely. If the bus gets to the destination late or experiences an accident, this will undoubtedly affect the passengers and the project.
Types of Stakeholders
We have two types of stakeholders.
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Internal stakeholders are directly involved in the project and are part of the organization in charge. They could be team members, managers, sponsors, etc. Their goal is to achieve the strategic objectives of the project. The passengers going to destination XYZ are internal stakeholders.
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External Stakeholders are, however, not directly related to the organization. They are essential to the business and are affected by the project results. They could be clients, vendors, investors, partners, etc. An example of an external stakeholder would be the attendant at the gas station, the mechanic who serviced the bus for the journey.
Components of Stakeholder Management in Project Management
Some crucial elements feature in the setup of a stakeholder management plan. Formulating a list of the stakeholders alongside an information grid and stakeholder map that details the impact and influence of each stakeholder on the project is crucial. The plan should stipulate each stakeholder's communication plan and pattern, project reporting techniques, conflict resolution strategies, and other strategies employed in different situations.
1. Stakeholder Identification: In identifying stakeholders for a project, it is important to consider that they can be either internal or external; it is necessary to know them and their influence on the project. Following the narration above, identifying them will include getting passengers headed to destination XYZ. Anyone passenger not going to this destination is automatically disqualified.
2. Stakeholder Analysis: Once all the stakeholders have been identified, the next step is to analyze each identified subject. You must examine each key interest group and map their power, interest, influence, and potential impact. The power/interest grid will help you prioritize stakeholders regarding how much they can control and want to influence the project. This process should include steps from identification to mapping their stakeholders to prioritization. The basic concept here is that stakeholder analysis involves drawing out the levels of influence, impact, and importance they wield on the project. Are there pregnant passengers? Will some passengers be disabled? This information can only be obtained by analyzing the passengers (stakeholders). The information will help the project manager plan properly.
3. Stakeholder Planning: The next step is to engage stakeholders after completing the analysis. The analysis has provided the necessary information that should help determine their communication needs, how frequently they need to be communicated with, and their preferred communication method. Some high-power stakeholders prefer intensive engagement, while the low-interest stakeholders prefer minimal engagement. As mentioned above, planning heavily depends on the result of the analysis. The driver might have to place the elderly passengers in seats with more legroom, assign seats that are near the convenience room to pregnant passengers and passengers with children, etc
4. Engagement & Communication: You must include stakeholder engagement methods while planning. Engagement could be through feedback sessions, update meetings, progress newsletters, etc. You need to understand the engagement and communication plan and incorporate them into the stakeholder planning process. It is also crucial for you to tailor the communications strategy to the needs of each stakeholder. The correct time of arrival and departure must be communicated to the passengers. It is expected that the passengers would provide methods of communication to the project manager to make communication easy. Some passengers like text alerts about the oncoming trip; others prefer calls or emails.
5. Managing Expectations: At this stage, you should set the stakeholders' expectations, and they should be accurate throughout the project. Your plan should include conflict resolution, clear and comprehensive project objectives, risk analysis, and constraints. You must map the level and depth of stakeholder involvement in the project Have a feedback schedule and a communication outline. Being honest, transparent, and realistic when communicating expectations to stakeholders at every project stage is vital. It is vital to let passengers know if there will be delays, if the trip will be prolonged, or if there is any information about the trip.
6. Monitoring & Control: Monitor stakeholder relationships, feedback, and attitudes towards the project. Adjust strategies and plans if there are any changes in their positions or interests.
7. Feedback Loop: When feedback is received, it has to be incorporated into the project process to improve it. These will affect strategies and deliverables, but ultimately, they will help to keep the project aligned with stakeholder needs and expectations. If the passengers gave feedback that there were no trash cans on the bus, the driver could communicate this to the bus management. Having more trash cans on board can elevate the passenger experience.
Benefits of Effective Stakeholder Management
The advantages of effective stakeholder management include
- Improved understanding of stakeholder needs and concerns.
- Greater buy-in and support for the project.
- There are fewer surprises as potential issues are identified and addressed early.
- Enhanced project reputation and increased chances of future collaborations.
Neglecting stakeholder management can lead to misunderstandings, conflicts, resistance, and potential project failure. Thus, proactive stakeholder management is essential for the successful delivery of projects.
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