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 

Important Terms and Definitions - Managing Stakeholders

As with all sections, let us wrap up the section on Stakeholder Management with the important terms we learnt in this section.

• Asynchronous communication - Communication in which the sender and receiver don’t have to be present at the same time, such as written paper or electronic documents, online bulletin boards, e-mail, and the World Wide Web in general.
• Distribute information - The process of making information available to stakeholders according to the project management plan.
• Issue - An item or a matter that is under discussion or dispute and for which there are most likely opposing views and disagreements among the stakeholders.
• Issue log - A tool used to manage issues that includes opening, modifying, tracking, documenting, and resolving issues.
• Managing stakeholder expectations - A process used for communicating and working with stakeholders to stay on the same page with them on the project requirements by addressing their needs and issues as they arise.
• Performance report - A document or a presentation that provides information about the performance, progress, and status of the project.
• Synchronous communication - Communication in which both the sender and the receiver have to be present at the same time, such as face-to-face project meetings and teleconferencing.

Prev: Summary - Managing Stakeholders

Next: Introduction to Monitoring & Controlling Project Work

Summary - Managing Stakeholders

Let us wrap up the section on Managing Stakeholders by summarizing what we learnt in the previous few chapters.

• It is crucial to the success of the project that stakeholder expectations be managed through distribution of the right information to the right stakeholders at the right time by using the right communication methods.
• Processes of managing stakeholder expectations and distributing information are called Manage Stakeholder Expectations and Distribute Information, and they belong to communication management.
• The communication management plan, a part of the project management plan, and performance reports are the major input items to the Distribute Information process.
• The information can be distributed by using various methods, such as reports and presentations.
• The communication management plan and stakeholder management strategy are major inputs to managing stakeholder expectations.
• Management and interpersonal skills are crucial to successfully managing stakeholder expectations.
• Performance reports, a major input to the Distribute Information process, come from monitoring and controlling the project. We haven't covered the monitoring & controlling part yet, but don't worry its coming up very soon.

Prev: Information Distribution

Next: Important Terms - Managing Stakeholders

Chapter 69: Big Picture of Stakeholder Management

As explained at various places during our PMP study series, managing stakeholders is extremely important and vital to the success of the project. Managing stakeholders includes the following processes:
• Identify Stakeholders - This is the process of identifying all the stakeholders, positive and negative, during the project initiation. In this process, you develop a stakeholder register and a stakeholder management strategy. Remember the chapter on Identifying Stakeholders and Stakeholder Management Strategy?
• Collect Requirements - As part of scope planning, this is the process of collecting project and product requirements that will meet the stakeholders’ needs and expectations. In this process you generate the stakeholder requirements document and the requirements management plan.
• Manage Stakeholder Expectations - This is the process of staying on the same page with the stakeholders on requirements by addressing their needs and issues.
• Distribute Information - This is the process of distributing relevant information to the right stakeholders at the right time by using the right methods.

The whole process can be illustrated as below:

Since, we have already covered Identifying Stakeholders and Collecting Requirements in great detail in the previous chapters, we will move on to Manage Stakeholder Expectations in the next chapter.


Prev: Introduction to Stakeholder Management

Next: Managing Stakeholder Expectations

Chapter 68: Introduction to Stakeholder Management

Even if your project succeeded according to the project management plan, it can be deemed as a failure if you did not do one thing right: “Managing Project Stakeholders”. That is how important it is to manage project stakeholders effectively, which includes understanding and managing the influences and expectations of the stakeholders. The core element of managing stakeholders is to manage their expectations to keep them in line with the project management plan.

To accomplish that, you need to distribute the right information to the right stakeholders at the right time by using the right communication method. The right stakeholders can be identified from the stakeholder register developed during project initiation. You must also perform the management according to the stakeholder management strategy developed during the project initiation stage and communicate with the stakeholders according to the communication management plan developed during project planning.

So, the key point we are going to learn in this series of chapter is “How to Effectively Manage Stakeholders”

Prev: Important Terms - Managing the Project Team

Next: Big Picture of Stakeholder Management

Summary - Project Initiation

Let us now summarize whatever we have learnt over the course of the previous few chapters reg. the Project Initiation Phase.

• Organizations start projects for different reasons, such as to meet a business or legal requirement, to take on a business opportunity, or to develop a solution for a problem.
• However, the underlying motivation is always to meet some business objectives in the strategic plan of the organization.
• Three categories of methods are available to select from the proposed projects.
• The first method is the benefit measurement method, which evaluates the benefits from the project.
• Constrained optimization methods focus on the probability of completing the project successfully, and
• Expert judgment relies on expert advice.
• As a project manager, you need to identify each stakeholder: an individual or an organization that is going to gain or lose from the successful completion of your project.
• The initiating project stage is constituted by two processes: Develop Project Charter and Identify Stakeholders.
• The two documents generated by the initiating stage are the project charter, which names and authorizes the project manager, and the stakeholder register, which identifies the project stakeholders and relevant information about them.
• Based on this information, you develop the stakeholder management strategy.
• The project charter also includes project justification based on the business needs and a high-level description of the product or service that the project will offer to meet those business needs.
• Issuing an approved project charter moves the project from the initiation stage into the planning stage, which is composed of a number of processes collectively called the planning process group.
• These processes will be covered in the subsequent chapters.

Previous: Stakeholder Management Strategy

Next: Important Terms & Definitions

Chapter 23: Stakeholder Management Strategy

This is the last chapter in the section on “Initiating a Project” in our PMP preparation series. We have learnt how to identify the stakeholders, analyzed them and classified them into various categories. Now the last step would be to create a strategy to manage the stakeholders. Yes, you create a Stakeholder Management Strategy. This is what we are going to learn in this chapter.

So, lets get started!!!

What is Stakeholder Management Strategy?

The stakeholder management strategy is the approach developed to deal with the stakeholders in the best interests of the project. Once we identify & analyze the stakeholders, it is imperative that any good project manager will put together a plan that can be used to manage these people.
The strategy should include the following elements:

• Key stakeholders
• For each stakeholder, level of influence on the project and level of impact on the stakeholder from the project
• How to manage individual stakeholders
• How to manage groups of stakeholders

For ex: you can create a table that will contain details of every single stakeholder and their details like below:

Stakeholder	Interest in the Project	Assessment of Impact of the Project on the Stakeholder	Level of Influence of the Stakeholder on the Project	Positive Stakeholder or Negative Stakeholder?	Strategy for Maximizing Support or Minimizing Negative Impact
Stakeholder 1	………	………	………	………	………
Stakeholder 2	………	………	………	………	………

The above is just a template and I havent filled in any details. The list would be long if there are numerous stakeholders and the project manager has to fill in the details of all those stakeholders.

Trivia:
The stakeholder management strategy should include both the positive and the negative stakeholders. You should develop and implement the stakeholder management strategy with one goal in mind: to optimize the project success by maximizing the support from the positive stakeholders and minimizing the impact on the project from the negative stakeholders.

As discussed in the previous chapter on stakeholder analysis, you can compare the different stakeholders and prepare a graph/plot to diagrammatically represent them. If the variables (for analysis) are chosen carefully, the output graph will show how much attention each stakeholder would need.

For Ex: let us look at a sample graph to understand better. Lets say X axis represents the level of interest in the project from low to high and the Y axis represents the amount of influence the stakeholder would have on the project from low to high.

If you see the graph above, we have 4 categories of stakeholders, stakeholder 1 has the highest authority level and has the highest interest in the project and hence he is the one we need to spend maximum effort managing whereas stakeholder 3 has the least interest and least authority, but still he too is a stakeholder and we need to spend a little effort to manage him.

Communication of information about the stakeholders is an important part of the stakeholder management strategy. For example, some of the information about certain stakeholders may be too sensitive to be included in a publicly shared document. As a project manager, you must exercise your judgment on which information about which stakeholder can be shared with whom and to what detail. Some stakeholders may make noise on certain things that they need not know, and you must ensure that they don't learn those things.

Trivia:
Even though, you have created a Project Charter and a Stakeholder Management Strategy, a project isnt officially kicked off until the Project Charter is approved. So once that is done (Usually by the Project Sponsor or the PMO) we are good to start the project.

Next:
As the project manager, you have created the project charter, identified all stakeholders and prepared a stakeholder management strategy. So the Project Initiation Phase is successfully complete. We are ready to move on to the next big step. As the next step, you will start Planning for this project.

First, we will wrap up the Initiation chapter with a summary and then move on to the project planning phase.

Previous: Stakeholder Analysis

Next: Summary - Project Initiation

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

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