As you are planning out your project, you will find that stakeholders play a vital role in its success. As a result, you should incorporate analysis of current stakeholders and execute a quality stakeholder management strategy throughout the creation and implementation of the project.
- What Are Stakeholders Specifically?
The Project Management Institute defines stakeholders as anyone who is interested in a project’s success. 1
More specifically, internal stakeholders are anyone directly participating in the project and part of the company—such as employees and executives. 2 On the other hand, external stakeholders, such as investors and suppliers, have a concern for the project but will not be as strongly impacted because they aren’t part of the organization.
To ensure their involvement, the stakeholders need to have some sort of connection with the project and its team. Project managers play this role as they encourage stakeholder participation, clarify and assess the stakeholders’ goals, provide communication to stakeholders, and quickly respond to conflicts and feedback.
- Why Are Stakeholders Important?
Stakeholders appear in a variety of circumstances and often have numerous goals or demands, which can quickly become complicated for project managers. At the same time, stakeholder involvement is vital for project success. 3
For instance, stakeholders can provide insights throughout the project process, allowing for more informed decisions. Additionally, stakeholders by definition have a strong influence over the project, whether monetarily, via their reputation, or through another way. Keeping stakeholders informed and ensuring their satisfaction allows you to maintain the health of their connections.
You may need to constantly engage with some stakeholders and ensure they are completely satisfied, while providing updates and/or keeping an eye on others. Assessing your stakeholders’ value, which removes some of the initial complexity, moves us to the analysis step.
- How to Conduct Stakeholder Analysis
Before you can properly analyze stakeholders, you need to locate and list them.3 To ensure all stakeholders are listed, you should complete this step with the project team. Then, you should organize the stakeholders into one of the four groups the Institute Project Management has specified: low power/low interest, low power/high interest, high power/low interest, and high power/high interest.
Regardless of their interest levels, high power stakeholders should be of high priority. However, your focus should be slightly different: low interest but high power stakeholders should be appeased with the project goals and approach (which often involves regular feedback), whereas stakeholders that are both high power and interest should be continuously involved in the process itself.
While low power stakeholders may not be as vital to the project, they are still important. As a result, you should provide updates and relevant information depending on their interest levels, observing them loosely to evaluate their perspectives of the project.
You will face both supporters and opponents to the project.4 To ensure success, you need to consider both sides as stakeholders. Additionally, you should take a look at any past projects and evaluate what concerns both sides had, and what conflicts needed to be resolved.
This way, you can more easily evaluate current concerns and assess upcoming risks. Often, these risks involve triggers, or issues you anticipate could cause stakeholders to react negatively. For instance, a change to the project plan, business policy, or team structure may, in the stakeholders’ perspective, negatively impact the overall business performance.
With these triggers in mind, you can more easily manage and assess feedback as it comes in. Along with these triggers, you should anticipate how stakeholders may react, and the best way to inform stakeholders about the change without ruffling too many feathers.
Ensuring stakeholder acceptance of changes leads us to the final step: management.
- Ensuring Proper Stakeholder Management
As you work on the project, you should include stakeholders throughout the entire process.3 Namely, you should constantly communicate any changes and progress, and/or provide clear opportunities for continuous involvement (again, depending on their interest and power levels).
To do so, you should consider each stakeholder’s communication preferences – along with how frequently you should communicate with each – and develop a communication strategy accordingly. This way, you not only promote engagement, but also show your dedication to keeping stakeholders in the loop.
Additionally, you should regularly seek out feedback from stakeholders.4 This way, you can catch concerns before they become conflicts, and you can keep your project in a direction that encourages high-power stakeholders to support it.
One way to receive regular, authentic feedback is to set aside time to regularly meet with stakeholders.5 This not only allows you to receive in-depth insights on their perspective, but also shows them that you respect their input.
Throughout this process, you will likely face contradicting opinions among stakeholders. Even if you do not agree with some of the stakeholders’ views, you should still demonstrate that you are listening and seriously considering their input.
Even if you do everything correctly and respect other viewpoints, conflicts may still arise, and stakeholders may start to or continue to oppose the project. In this scenario, you should not debate with the stakeholders, but rather ask leading questions to direct them to your perspective. When you do this, you not only demonstrate your line of reasoning, but also show that you respect their concerns, and that they are not “wrong” so much as they might have missed some context.
1 Smith, L. W. (2000). Stakeholder analysis: a pivotal practice of successful projects. Paper presented at Project Management Institute Annual Seminars & Symposium, Houston, TX. Newtown Square, PA: Project Management Institute. https://www.pmi.org/learning/library/stakeholder-analysis-pivotal-practice-projects-8905
2 “The 6 Key Principles of Effective Stakeholder Management.” https://slidemodel.com/stakeholder-management-key-principles/
3 “What Are Stakeholders? Understanding Their Importance.” https://instituteprojectmanagement.com/blog/what-are-stakeholders-understanding-their-importance/
4 “8 Stakeholder Strategies Used by Top Managers.” https://www.projectpractical.com/stakeholder-management-strategies/
5 Stakeholder Engagement Tips: 5 Tips for Project Managers. https://www.youtube.com/watch?v=APc9S_8v7YY&t=2s
