Stakeholder Management Process

1. Stakeholder Analysis

Stakeholder analysis is not a single step but a series of steps, stakeholder identification, stakeholder mapping and stakeholder prioritization. In simple terms, stakeholder analysis could be defined as the process of understanding who your project stakeholders are, what’s their level of influence and involvement, and their importance for your project or business.

2. Stakeholder Identification

Stakeholder identification is the first step in the stakeholder analysis process and it’s the base of your stakeholder management plan. As its name implies, this process consists in identifying all your internal and external stakeholders. Later these stakeholders will be analyzed, prioritized and engaged.

Here are some things project managers should consider during the stakeholder identification process:

• Review project planning documents such as your project charter to help you find stakeholder information.
• Look for any government regulations that might apply to your project. If so, those government agencies become project stakeholders.
• Ask your team members and other internal stakeholders for feedback.
• Identify all the people and organizations involved with your supply chain.

3. Stakeholder Mapping

Now that you’ve identified all your internal and external stakeholders, it’s time to determine their level of interest and the power or influence they have over the project. This is an important step in the stakeholder relationship management process, because this is when you’ll get the information needed for stakeholder prioritization.

The easiest way to do this is to create a power interest grid or power interest matrix.

4. Stakeholder Prioritization

Once you have a thorough list, you can begin prioritizing your project stakeholders by their importance to the project. Decide who among them have the most influence on the project and are affected by it.

Once you’ve determined who your key stakeholders are, it will be easier to keep an eye on them and determine which are the best stakeholder management strategies to keep them satisfied.

5. Stakeholder Engagement

Finally, with the information created in your stakeholder map, you figure out how to engage your stakeholders. This is the process by which you decide how you’ll communicate and interact with your project stakeholders.

This leads to a stakeholder communication plan that outlines the channels and frequency of communications between you and each project stakeholder. You can use our communication plan template to get started.

Source

Managing Stakeholder Relationships

If you’ve never plan stakeholder management on a project before, it can be difficult to imagine how you would go about doing this on and individual level. Think about the various stakeholders involved on a large project. How would you plan on managing the involvement of stakeholders listed here?

High power, interested people:

You should fully engage with these stakeholders — you should make sure that they are very satisfied with the communications you send them.

High power, less interested people:

You should make sure that these people feel satisfied with your communications. Don’t communicate with them too much though otherwise your message may become boring.

Low power, interested people:

You should ensure that these people are adequately informed.  They may be able to help you with the details of your project, suggesting a way of doing something that you haven’t already thought of.

Low power, less interested people:

You should monitor these people, ensuring that you send updates about the project, but ensuring that you do not bore them with excessive communication.

Managing Stakeholder Relationships Video

Exercise 1: Stakeholder Relationship Mapping

Use the following space or a large sheet of paper to identify stakeholders and their relationships to local planning issues and/or each other.  If desired, make notes directly on the paper or use different symbols or lines to identify important relationships (i.e. common interests, influence, etc.).  This type of exercise is useful for identifying stakeholders, brainstorming potential issues, and uncovering hidden relationships.

Examples:         Graphic from Bryson, 2004 and Bryant, 2003.  Photos 1 and 2 from Stakeholder Analysis, Museum Notes Blog, February 7, 2011.  Photo 3 from Stakeholder Interests, Sustainable Sanitation and Water Management, 2010.

Managing Stakeholders

Often there is more than one major stakeholder in the project. An increase in the number of stakeholders adds stress to the project and influences the project’s complexity level. The business or emotional investment of the stakeholder in the project and the ability of the stakeholder to influence the project outcomes or execution approach will also influence the stakeholder complexity of the project. In addition to the number of stakeholders and their level of investment, the degree to which the project stakeholders agree or disagree  influences the project’s complexity.

A small commercial construction project will typically have several stakeholders. All the building permitting agencies, environmental agencies, and labour and safety agencies have an interest in the project and can influence the execution plan of the project. The neighbours will have an interest in the architectural appeal, the noise, and the purpose of the building.

Example: Tire Plant in India

A U.S. chemical company chartered a project team to design and build a plant to produce the raw materials for building truck tires designed for unpaved roads. The plant was to be built in India a few years after an accident that killed several Indians and involved a different U.S. chemical company. When the company announced the new project and began to break ground, the community backlash was so strong that the project was shut down. A highly involved stakeholder can significantly influence your project.

Example: Wind Turbine on a College Campus

A small college in South Carolina won a competitive grant to erect and operate a wind turbine on campus. The engineering department submitted the grant as a demonstration project for engineering students to expose students to wind technology. The campus facilities department found only one location for the wind turbine that would not disrupt the flow of traffic on campus. The engineering department found that location unacceptable for students who had to maintain the wind turbine. The county construction permitting department had no policies for permitting a wind turbine and would not provide a building permit. The college had to go to the county council and get an exception to county rules. The marketing department wanted the wind turbine placed in a highly visible location to promote the innovative approach of the college.

Each of the college’s stakeholders had a legitimate interest in the location of the wind turbine. The number of stakeholders on the project, multiplied by their passion for the subject and the lack of agreement on the location, increased the complexity of the project. Significant time and resources of a project will be dedicated to identifying, understanding, and managing client expectations.

Example: Stakeholders and a Bridge Project

The Department of Highways chartered a project to upgrade a number of bridges that crossed the interstate in one of the larger cities in South Carolina. The closing of these bridges severely impacted traffic congestion, including a large shopping mall. The contract included provisions for minimizing the impact on the traffic and communities near the construction areas. This provision allowed businesses or interested parties to review the project schedule and make suggestions that would lessen the impact of the construction. The project leadership invested significant time and resources in developing alignment among the various political stakeholders on the project approach and schedule.

Relationship Building Tips

Take the time to identify all stakeholders before starting a new project. Include those who are impacted by the project, as well as groups with the ability to impact the project. Then, begin the process of building strong relationships with each one using the following method.

• Analyze stakeholders: Conduct a stakeholder analysis, or an assessment of a project’s key participants, and how the project will affect their problems and needs. Identify their individual characteristics and interests. Find out what motivates them, as well as what provokes them. Define roles and level of participation, and determine if there are conflicts of interest among groups of stakeholders.
• Assess influence: Measure the degree to which stakeholders can influence the project. The more influential a stakeholder is, the more a project manager will need their support. Think about the question, “What’s in it for them?” when considering stakeholders. Knowing what each stakeholder needs or wants from the project will enable the project manager to gauge his or her level of support. And remember to balance support against influence. Is it more important to have strong support from a stakeholder with little influence, or lukewarm support from one with a high level of influence?
• Understand their expectations: Nail down stakeholders’ specific expectations. Ask for clarification when needed to be sure they are completely understood.
• Define “success”: Every stakeholder may have a different idea of what project success looks like. Discovering this at the end of the project is a formula for failure. Gather definitions up front and include them in the objectives to help ensure that all stakeholders will be supportive of the final outcomes.
• Keep stakeholders involved: Don’t just report to stakeholders. Ask for their input. Get to know them better by scheduling time for coffee, lunch, or quick meetings. Measure each stakeholder’s capacity to participate and honour time constraints.
• Keep stakeholders informed: Send regular status updates. Daily may be too much; monthly is not enough. One update per week is usually about right. Hold project meetings as required, but don’t let too much time pass between meetings. Be sure to answer stakeholders’ questions and emails promptly. Regular communication is always appreciated – and may even soften the blow when you have bad news to share.

These are the basics of building strong stakeholder relationships. But as in any relationship, there are subtleties that every successful project manager understands – such as learning the differences between and relating well to different types stakeholders.

How to Relate to Different Types of Stakeholders

By conducting a stakeholder analysis, project managers can gather enough information on which to build strong relationships – regardless of the differences between them. For example, the needs and wants of a director of marketing will be different from those of a chief information officer. Therefore, the project manager’s engagement with each will need to be different as well.

Stakeholders with financial concerns will need to know the potential return of the project’s outcomes. Others will support projects if there is sound evidence of their value to improving operations, boosting market share, increasing production, or meeting other company objectives.

Keep each stakeholder’s expectations and needs in mind throughout each conversation, report or email, no matter how casual or formal the communication may be. Remember that the company’s interests are more important than any individual’s – yours or a stakeholder’s. When forced to choose between them, put the company’s needs first.

No matter what their needs or wants, all stakeholders will respect the project manager who:

• Is always honest, even when telling them something they don’t want to hear
• Takes ownership of the project
• Is predictable and reliable
• Stands by his or her decisions
• Takes accountability for mistakes

Supportive Stakeholders are Essential to Project Success

Achieving a project’s objectives takes a focused, well-organized project manager who can engage with a committed team and gain the support of all stakeholders. Building strong, trusting relationships with interested parties from the start can make the difference between project success and failure.

Business Ethical Dilemmas and Stakeholders Video

Globa Ethics Solutions YouTube video:

Text Attributions

This chapter was adapted and remixed by Adrienne Watt from the following sources:

• Opening text and text under “Project Stakeholders” adapted from “Project Stakeholders” in Project Management by Merrie Barron and Andrew Barron. Licensed under a CC BY 4.0 licence.
• Text under “Politics of Projects” adapted from “The Politics of Projects”  in Project Management by Merrie Barron and Andrew Barron. Licensed under a CC BY 4.0 licence.

• Text under “Culture of Stakeholders” adapted from Culture of Stakeholders in Project Management From Simple to Complex by author(s) whose names have been removed at the request of the original publisher. Licensed under a   CC BY-NC-SA 4.0 licence

• Text under “Relationship Building Tips adapted from How to Build Relationships with Stakeholders by Erin Palmer. © CC BY (Attribution).
• Text under “Tools to Help Stakeholder Management” adapted from
  Project Decelerators – Lack of Stakeholder Support by Jose Solera. © CC BY (Attribution).