Project Stakeholders

A stakeholder is a person, a group, or an organization that is actively involved in the project or whose interests may be positively or negatively affected by the results achieved by or the completion of the project. As I have extensively covered this topic in my previous article in the PMP Exam prep series we will keep this article short. 

Please do refer to the article to understand more about the different stakeholders in a project because irrespective of whether the project management style is Agile or Traditional, the concept of stakeholder doesn't change. 

A project manager should identify both the internal and external stakeholders of and their influence levels on the project as early as possible (in terms of projects life cycle)

Why are Stakeholders Important? 

Individual stakeholders often have different conflicting objectives. For Example, if you are given the responsibility of setting up a new factory in a city, you could have stakeholders that welcome the move (politicians in the area) whereas you could also have stakeholders who oppose the move (locals who don't want to sell their land for the factory). As project manager, your responsibility includes identifying all the stakeholders who will have a positive or negative influence on the project so that you can foresee potential risks & impacts on your Project. 

In my article on Stakeholders, I have listed down the 12 Most common stakeholders that every Project would have. Don't forget to check it out by Clicking here

Though Stakeholder Management was part of PMBOK 4^th Edition, in the 5^th Edition, a new Knowledge Area got introduced called Project Stakeholder Management. That is how much importance PMI gives toward managing project stakeholders. The following articles from the PMP Exam series on Stakeholder Management will also be useful for you to understand more about Stakeholder Management. Check them out.  

• Stakeholder Analysis
• Identify Stakeholders
• Stakeholder Management Strategy

Trivia: 

You the Project Manager is an extremely important stakeholder for the Project as well. That's why I spent an entire article talking about just you. The article is titled “The Most Influential Stakeholder” which is appropriate because you will have a direct impact on the success or failure of the project.  

Do take time and read it before you move further on this series. 

PMI ACP Exam Prep Home Page 

Chapter 4: Project Life Cycle

Aim: To Describe the Project Life Cycle

The project manager and project team have one shared goal: to carry out the work of the project for the purpose of meeting the project’s objectives. Every project has an inception, a period during which activities move the project toward completion, and a closure (either successful or unsuccessful). Taken together, these phases represent the path a project takes from the beginning to its end and is generally called the project life cycle.

The project life cycle is often formally divided into phases that describe common activities as the project matures. The activities near the beginning of a project look different from activities closer to the end of the project. Most projects share activity characteristics as the project moves through its life cycle. You might see several questions on the exam that ask you to compare different phases in a project’s life cycle. In general, here are the common comparisons of early and late project life cycle activities:

• The least is known about the project near its beginning. As the project matures, more is learned about the project and the product it produces. This process is called progressive elaboration. As you learn more about the project, all plans and projections become more accurate.
• The level of uncertainty and risk is the highest at the beginning of a project. As more is learned about the project and more of the project’s work is completed, uncertainty and risk decreases.
• Stakeholders assert the greatest influence on the outcome of a project at the beginning. After the project starts, the stakeholder influence continually declines. Their influence to affect the project’s outcome is lowest towards the end of the project.
• Costs and personnel activity are both low at the beginning of a project, are high near the middle of the project, and tend to taper off to a low level as the project nears completion.
• The cost associated with project changes is at its lowest point at the project’s beginning. No work has been done, so changing is easy. As more and more work is completed, the cost of making any changes rises.

One of the more important relationships to understand throughout the project life cycle is the relationship between project knowledge and risk. As stated earlier, knowledge of a project increases as more work is done due to progressive elaboration, and risk decreases as the project moves toward completion.

Another important relationship present in a project’s life cycle is the relationship between the declining influence of stakeholders on the outcome of a project and the cost of changes and error corrections. Because little or no work has been accomplished near the beginning of a project, changes require few adjustments and are generally low in cost.
At the same time, stakeholders can assert their authority and make changes to the project’s direction. As more work is accomplished, the impact and cost of changes increase and leave stakeholders with fewer and fewer viable options to affect the project’s product.

The image below summarizes these relationships:

Although all projects are unique, they do share common components or processes that are normally grouped together. Below are the generally accepted process groups defined in the PMBOK:
• Initiating
• Planning
• Executing
• Controlling
• Closing

Moving from one phase in the life cycle to another is generally accompanied by a transfer of technical material or control from one group to another. Most phases officially end when the work from one phase is accepted as sufficient to meet that phase’s objectives and is passed onto the next phase. The work from one phase could be documentation, plans, components necessary for a subsequent phase, or any work product that contributes to the project’s objectives.

You can learn more about the Project Lifecycle by Clicking Here

Who Are the Stakeholders?

A project exists to satisfy a need or requirement. Without a need of some sort, a project is not necessary. Needs originate with one or more people; someone has to state a need. As a result, a project fills the need and likely affects some people or organizations. All people and organizations that have an interest in the project or its outcome are called project stakeholders. The stakeholders provide input to the requirements of the project and the direction the project should take throughout its life cycle.

The list of stakeholders can be large and can change as the project progresses. One of the first requirements to properly manage a project is the creation of a key stakeholder list. Be very careful to include all key stakeholders. Many projects have been derailed due to the political fallout of excluding a key stakeholder. Every potential stakeholder cannot be included in all aspects of a project, so it is important to identify the stakeholders who represent all other stakeholders.

Although it sounds easy to create a list of stakeholders, the ground reality is far from easy. You often need to ask many questions about many people to ensure you create a complete stakeholder list. Because stakeholders provide input for the project requirements and mould the image of the project and its expectations, it is vitally important that you be as persistent as necessary to identify all potential stakeholders. The Key stakeholders for any project would include

• Project manager - The person responsible for managing the project.
• Customer or user - The person or organization that will receive and use the project’s product or service.
• Performing organization - The organization that performs the work of the project.
• Project team members - The members of the team who are directly involved in performing the work of the project.
• Project management team - Project team members who are directly involved in managing the project.
• Sponsor - The person or organization that provides the authority and financial resources for the project.
• Influencers - People or groups not directly related to the project’s product but with the ability to affect the project in a positive or negative way.
• Project management office (PMO) - If the PMO exists, it can be a stakeholder if it has responsibility for the project’s outcome.

You can learn more about the Project Stakeholders by Clicking Here

The Project Manager

One of the most visible & Obvious stakeholders is the project manager. The project manager is the person responsible for managing the project and is a key stakeholder. Although the project manager is the most visible stakeholder, he does not have the ultimate authority or responsibility for any project. Senior management, specifically the project sponsor, has the ultimate authority for the project. Senior management issues the project charter and is responsible for the project itself. The project manager is granted the authority by senior management to get the job done and to resolve any issues that might arise during the course of the project.

You can learn more about the Roles & Responsibilities of a Project Manager by Clicking Here

Exam Watch:
You must have a clear understanding of the project manager’s roles and responsibilities for this exam. If you have a pdf version of the PMBOK, search for the word “Project Manager,” and look at all the responsibilities defined. Know what a project manager must do, should do, and should not do.

Managing Project Constraints

Managing projects is a continual process of balancing the various competing project variables, or constraints. Historically, project managers have focused on the three most common constraints of scope, time, and cost. But in reality, there are more than just three constraints. Each of the project constraints are related and have an effect on the outcome of the project. The project manager must manage the competing constraints to successfully complete a project. Too much attention on one generally means one or more of the others suffer. A major concern of the project manager is to ensure each of these variables is balanced with the others at all times. The project constraints include, but are not limited to

• Scope - How much work is to be done? Increasing the scope causes more work to be done, and vice versa.
• Quality - What quality standards must the project fulfill? Higher quality standards often require more work, impacting other constraints.
• Schedule - The time required to complete the project. Modifying the schedule alters the start and end dates for tasks in the project and can alter the project’s overall end date.
• Budget - The cost required to accomplish the project’s objectives. Modifying the cost of the project generally has an impact on the scope, time, or quality of the project.
• Resources - Resources that are available to conduct the work of the project.
• Risk - Each decision made in the planning and execution of a project comes with risk. Riskier decisions might have consequences that affect other constraints.

Any change to one of the variables has some effect on one, or several, of the remaining variables. Likewise, a change to any of the variables has an impact on the overall outcome of the project. The key to understanding the project constraints is that they are all interrelated. For example, if you decrease the cost of your project, it is likely that you decrease the quality and perhaps even increase the risk. With less money, less work gets done. Or, you might find that it takes more time to produce the same result with less money. Either way, a change to cost affects other variables.

Even though this concept is fairly straightforward, a project manager must stay on top of each one to ensure they are balanced. In addition to managing the project constraints, the project manager also is responsible for explaining the need for balance to the stakeholders. All too often, stakeholders favor one constraint over another. You have to ensure that the stakeholders understand the need for balancing all constraints.

Project Management Process Groups

Work executed during the project can be expressed in specific groups of processes. Each project moves through each of the groups of processes, some more than once. These common collections of processes that the PMBOK defines are called process groups. Process groups serve to group processes in a project that represent related tasks and mark a project’s migration toward completion.

Remember that the five process groups defined by the PMBOK are
• Initiating - Defines the project objectives and grants authority to the project manager
• Planning - Refines the project objectives and scope and plans the steps necessary to meet the project’s objectives
• Executing - Puts the project plan into motion and performs the work of the project
• Monitoring and Controlling - Measures the performance of the executing activities and compares the results with the project plan
• Closing - Documents the formal acceptance of the project’s product and brings all aspects of the project to a close

Understanding Project Life Cycle and Project Management Processes Relationships

The PMBOK defines 42 project processes, grouped into five process groups. These processes define the path a project takes through its life cycle. The processes are not linear; some overlap with one another. In fact, some processes are iterative and are executed multiple times in a single project. It is important to become comfortable with the process flow and how it defines the project life cycle.

Throughout the life of a project, different processes are needed at different times. A project starts with little activity. As the project comes to life, more tasks are executed and more processes are active at the same time. This high level of activity increases until nearing the completion of the project (or project phase). As the end nears, activity starts to diminish until the termination point is reached.

Processes, Process Groups, and Knowledge Areas

The best way to prepare for questions that test your knowledge of the project management processes is to know and understand each of the processes, along with its process group and knowledge area assignment.

You can learn more about the Processes, Process Groups & Knowledge Areas by Clicking Here. The details are available in a table format that is easy to understand.

Understanding Process Interaction Customization

The five process groups defined in the PMBOK are general in nature and common to projects. However, all projects are unique and some do not require all 42 individual project processes. The processes defined in the PMBOK are there for use when needed. You should need the majority of the processes to properly manage a project, but in some cases you will not require each process.

Because projects differ from one another, a specific process can differ dramatically between projects. For example, the process of developing a communication plan is simple and straightforward for a small project with local team members. However, the process is much more involved and complicated if the team is large and located in several countries.
Understand the five process groups and 42 processes as defined in the PMBOK. But, more importantly, understand when and how to use each process. The exam focuses more on process implementation than process memorization. Be prepared to really think about which processes you need for a particular project.

Prev: Chapter 3

Next: Chapter 5

Chapter 21: Identifying the Project Stakeholders

In the chapter on Project Stakeholders a few chapters back, we had listed down some of the important stakeholders in any project. In this chapter, we are going to look at how exactly we can identify the stakeholders for a project and the rationale behind the whole process of Identifying Stakeholders.

So, lets get started!!!

Who are Project Stakeholders?

I would suggest you go back to the chapter on Project Stakeholders to refresh your understanding of who these people are. But, to summarize in short, Project Stakeholders are individuals & organizations whose interests are affected by the Projects Execution and Completion. A point to note is that, this impact on them could be either positive or negative. To put it simply, they have something to gain or lose depending on the success of the project.

Usually, project managers overlook negative stakeholders which might increase the project risk. Ignoring such negative stakeholders will have a damaging impact on the project. So, it is important that you, as the project manager identify all stakeholders esp. the Negative stakeholders.

Why Identify the Stakeholders?

Identifying all the project stakeholders might be a difficult task, but the obvious ones include the project manager, program manager, portfolio manager, customers and users, project sponsor, project management office, project team, operations management, sellers and business partners, and functional managers. A detailed explanation of all these stakeholders can be viewed here

In addition to these key stakeholders, there can be a number of other less obvious stakeholders inside and outside of your organization. Depending upon the project, these might include investors, sellers, contractors, family members of the project team members, government agencies, media, and even the society as a whole.

It is critical for the success of the project that you identify positive and negative stakeholders early on in the project, understand and analyze their varying and conflicting expectations, and manage those expectations throughout the project.

Identifying the Stakeholders:

The process of identifying stakeholders is a bit complicated and requires careful and cautious effort from the Project Management Team. This activity would include:

1. Identify individuals and organizations that will influence the project and will be impacted by the project.
2. Document relevant information about the individuals and organizations and about their interests and involvement in the project.
3. Document how these individuals and organizations can influence the project and how they can be impacted by the project.
4. Determine their levels of importance.

Let us now look at a picture to understand this process better:

As you can see, there is an input to the stakeholder identification process, it uses a set of tools and techniques and provides an output. This output is our stakeholder document that outlines the stakeholders in the project and the impact (positive or negative) that they might have on the project.

Because identifying and analyzing the stakeholders and managing their expectations and influence is so critical to the success of the project, you should start this task early on in the project.

Let us now take a detailed look at how the whole process of identifying stakeholders happens.

Input to Identifying Stakeholders

As in the picture above, the following entities are the input to the stakeholder identification process.

Project charter

The project charter greatly helps to identify stakeholders by revealing the internal and external individuals and groups who either are directly involved in the project or will potentially be impacted by it. Project sponsors, customers, and departments of the performing organization participating in the project are some examples of stakeholders who can be identified by using the project charter.

Procurement documents

If the project originated from procurement activity, then the procurement documents, such as the contract, will be useful to identify the stakeholders. Even if this project is going to use procurement in order to produce part of its product, the procurement documents will help to identify some (not all) stakeholders, such as sellers and suppliers.

Enterprise environmental factors

Examples of the enterprise environmental factors that help identify stakeholders include governmental and industry standards, organizational cultures, and organizational structure. It’s important to understand the organization’s culture and structure in order to identify some stakeholders and their possible impact on the project, because different people will have different levels of authority and influence under different cultures and structures. More details on Enterprise Environmental Factors can be found in the article “click here”

Organizational process assets

The stakeholder register templates and the stakeholder registers from previous projects can be useful to create the stakeholder registers for the current project at hand. Another example of the organizational process assets helpful in identifying stakeholders are the lessons learned from previous projects. All process assets in an organization can found in the Project Management Office (PMO). More details on Organizational Process Assets can be found in this article “click here”

Tools and Techniques for Identifying Stakeholders

The tools and techniques used to identify stakeholders include expert judgment and stakeholder analysis. Expert Judgment was discussed in the Previous Chapter and it plays a significant role in identification of stakeholders. Stakeholder Analysis will be covered in the Next. An experienced project manager would put to use all his learnings and expertise and identify all possible stakeholders. Plus you need to conduct lot of meetings to get the necessary inputs to allow you to identify the stakeholders.

Output of Identifying Stakeholders

The output items of the Identify Stakeholders process are the stakeholder register and the stakeholder management strategy.

What is Stakeholder Register?

After your stakeholder analysis and identification, you store all the information about the stakeholders that you identified in a document called the stakeholder register. This information includes:

• Identification - For example, name, location, organizational position, project role and contact information.
• Assessment - Requirements and expectations coming from this stakeholder, the part or the phase of the project that is of most interest to this stakeholder, and assessment of his/her potential influence on the project.
• Classification - There will be a whole array of different kinds of project stakeholders with varied influence. So it’s helpful to classify them by using suitable criteria, such as whether they are internal or external to the performing organization, proponents or opponents of the project, and so on.

The Stakeholder Management Strategy is the plan that you put forth as to how you are going to manage and handle each of the stakeholders. This is something we will be looking in great detail in one of the next chapters.

Note: In PMBOK 4th Edition this process also had an output which was the Stakeholder Management Strategy but that has been removed in the 5th edition. So, the input, tools, output chart above has been updated to remove this

Previous: Developing a Project Charter

Next: Stakeholder Analysis

Chapter 17: Introduction to Project Initiation

As you learned in the previous section on Introduction to Project Management, you manage projects through processes. You also learned that a process has an input, uses some tools and techniques, and produces output. You manage the initiation of a project through a process group called the initiating process group, which consists of two processes: Develop Project Charter and Identify Stakeholders. Before you can initiate a project, it must originate from somewhere.

In this section (a bunch of chapters) we will be looking at one big question:

How is a Project Initiated?

So, lets get started!!!

Initiating a Project:

Initiating a project means defining the project, getting approval from people to start it, and identifying and analyzing the project stakeholders. During this stage the initial scope of the project is defined. Accordingly, initial resources are determined and allocated, a project manager with an appropriate authority level is assigned, and project stakeholders are identified.

Defining the project includes the following tasks:

1. Developing project objectives and describing how they are related to the organization’s business objectives and strategy. (Remember the Project/Program/Portfolio Relationship chapter?)
2. Specifying the project deliverables, such as products, services, or results, that will meet the objectives of starting this project.
3. Based on the objectives and deliverables, defining the initial scope of the project by explaining what will be done and drawing boundaries around what will be done and what will not be done.
4. Based on the initial scope, estimating the project duration and the resources needed. Only an Initial estimate would be made so that resources can be procured accordingly. An even accurate estimate would be made during the planning phase
5. Defining the success criteria. The project definition is incomplete without defining its success.
6. Assigning the initial project resources.
7. Assigning a project manager if one is not already assigned.
8. Authorizing the project. While different organizations may have a different process to approve the processes, the standard way to do it is to approve the document that holds the definition of the project, such as the project charter.

Note: The processes in the initiating process group, just like any other process group, can also be used to initiate a phase of a project that has multiple phases.

Based on the project definition, you will identify the project stakeholders.

Look at the image below and you will understand the process of how inputs are provided to create the project charter.

Every organization has a business strategy and based on the business needs, someone in the top management writes down a statement of work and makes a business case. This business case and the statement of work are the starting points to develop the initial project scope and thereby determine what needs to be done in order to meet the business strategy. All these things go into the Project Charter which in turn is an input to the process of identifying the Stakeholders. Remember the chapter on Project Stakeholders?

Trivia:
It’s a good policy to involve customers and other important stakeholders in the initiation stage of the project. It gives them the feeling of shared ownership that will greatly contribute to the success of the project by positively influencing factors such as deliverable acceptance and stakeholder satisfaction.

In the next chapter, we will ponder more about the origin of projects and how they are initiated!!!

Previous: Important Terms - Introduction to Project Management

Next: Origin of Projects

Chapter 9: The Most Influential Stakeholder

In the previous chapter, we took a look at all the people who maybe stakeholders in a project and can have a positive or negative impact on a project. In this chapter, we are going to look at the most influential stakeholder in a project, the person on whom a bulk of the weight of the projects success or failure rests on…

So, lets get started!!!

Who is this Most Influential Stakeholder?

Well the answer is YOU

You, the project manager, are a very special project stakeholder yourself. The job (role) of a project manager is extremely challenging and thereby exciting. Depending on the organizational structure of your organization, you may be reporting to a functional manager, a program manager, a portfolio manager, or to some other manager or executive. Nevertheless, it is your responsibility to work with your team and other relevant individuals and groups, such as program managers and portfolio managers, to bring all the pieces together and make the project happen i.e., to achieve the project objectives.

To do this, you need a range of skills and capabilities. They are:

1. Communication
2. Negotiation
3. Problem Solving
4. Influencing
5. Leadership

Let us take a look at these skills, one by one.

Communication

The importance of communication in project management cannot be overemphasized. Even a well scheduled and well funded project can fail in the hands of a hardworking team of experts due to the lack of proper communication. As a project manager, you might be dealing with a wide variety of individuals, ranging from executives, to marketing personnel, to hardcore technologists. You should be able to wear different communication hats depending upon whom you are communicating with. For example, you will not be using technical jargon to talk to executives or marketing folks, and you will not speak marketing terms to the software developers.

You will be speaking to different stakeholders in their language, while filling the language gap between different functional groups and eliminating misunderstandings due to miscommunication. The key point is that you put on the appropriate communication hat depending on which individual you are dealing with. You, as the project manager must be able to switch communication hats quickly and avoid technical jargon and acronyms that are not understood by the person or group with whom you are communicating. The goal is clarity of the language to convey the message accurately.

You will be communicating throughout the project. So, for any project, you must develop a communication strategy that addresses the following issues:

1. What needs to be communicated?
2. With whom do you want to communicate?
3. How do you want to communicate or what is the medium of communication?
4. What is the outcome of your communication?

The answer to all of the above questions would vary depending on the situation and the mode that the other party is most comfortable with. Some users might like email while some prefer a face to face meeting. You, as the project manager must take the judgment call and choose the best mode such that all the parties are happy. Also, You need to monitor your communication and its results to see what works and what does not, so you can improve communication.

Negotiation

A negotiation is give and take, with the goal of generating a win-win outcome for both parties. You might need to negotiate at any stage of the project lifecycle. A good negotiator can resolve a conflict between two people and make them both feel that, they have won.
Here are some examples of negotiations:

1. Negotiating with stakeholders regarding expectations during the project planning. For example, the suggested deadline for the project schedule might not be practical, or you might need a certain type or quantity of resources to make it happen.
2. Negotiating with functional managers to obtain human resources, such as software developers.
3. Negotiating with team members for specific job assignments and possibly during conflict resolution among the team members.
4. Negotiating changes to the project schedule, budget, or both because a stakeholder proposed changes to the project objectives.
5. Negotiating with external vendors in procurement. However, in contract negotiations, representatives from the legal department might be involved.

Problem Solving

Project-related problems might occur among the stakeholders or with the projects. Most commonly problems come up within the project team. Either way, they are there to damage the project. Your task is to identify the problem early enough and to solve it. Here is the general technique for accomplishing this:

1. Look for early warning signs by paying close attention to formal progress reports and to what the team members say and do regarding the project.
2. Once you identify a potential problem, do your homework. Understand and identify the problem clearly by collecting more information without passing judgment.
3. Once the problem and its causes are clearly identified, work with the appropriate stakeholders, such as project team members, to explore multiple solutions.
4. Evaluate the multiple solutions and choose the one you will implement.
The key point throughout the problem-solving process is to focus on the problem, not on the individuals, with the goal of finding the solution in order to help the project succeed. There should be no finger-pointing. At the end of the day the success of the project should be your goal.

Influencing

Influencing means getting individuals or groups to do what you want them to do without necessarily having formal authority to mandate an outcome from them. This is increasingly becoming an essential management skill in today’s world. People no longer appreciate authoritative bosses and they tend to rebel or under perform if we try to exercise control on them. But, if we can influence them, then they will not only do what you want but also be happy about it. To exercise influence, you must understand the formal and informal structure of your organization. Again, you might need to use influencing when you are dealing with any aspect of the project—for example, controlling changes to the project, negotiating schedule or resource assignments, resolving conflicts, and so on.

Leadership

In the traditional organizational structure, project managers do not have formal authority over the project team members who perform the teamwork. So you have no other choice than to manage by leadership and not by authority. The good news is that managing by leadership is more effective and productive than managing by authority anyway. A project team is generally a group of individuals coming together for the lifetime of the project from different functional groups with different skills and experience. They need a leader to show them the vision and to excite, inspire, and motivate them toward the goals and the objectives of the project. You, the project manager, are that leader. You can lead your team in the right path to ensure the success of the project.

The Golden Triplet

PMI recommends that in addition to the skills related to application areas and management, an effective project manager must have the following three characteristics:
1. Knowledge - knowledge of project management.
2. Performance - The ability to use the knowledge to perform the project i.e., to make accomplishments and get the job done.
3. Personal - This relates to the behavior of the project manager while performing the project and the related activities. This includes personal effectiveness, attitude, ethics and leadership.

In other words, an effective project manager uses personal abilities, such as a positive attitude, leadership skills, good ethics and professional behavior to apply project management knowledge effectively in order to lead the project to success.


Previous: Project Stakeholders

Next: Organizational Influence on Projects