Understanding Stakeholder Management

Understanding Stakeholder Management

Project managers often face numerous conflicts when managing both internal and external stakeholders in a project. The difference in the perspective of how stakeholders work drives the behaviors that can create challenging situations for project managers in which indirectly, may even derail a project. This article provides insight on how to manage and understand both internal and external stakeholders to ensure a successful project.
Introduction
Stakeholder Management is one of the key aspects in a project that requires
special attention from the project manager. The term special attention is used due to the various differences in opinions coming from each stakeholder who can directly or indirectly affect the success of the project. The project manager quite often fails to understand or misinterprets the actual requirements coming from the relevant stakeholders. And sometimes, Project Managers simply cannot meet the requests from important stakeholders nor entertain any
special requests .
This paper recommends some of the key practices that can be used effectively to establish and manage stakeholder relationships successfully from the beginning to the end of the project. Some of the key areas that a project manager needs to adhere to while managing stakeholders are as below:
i. Identification of Stakeholders
ii. Stakeholder Register
iii. Stakeholders Power/Interest Grid
iv. Stakeholder Engagement Management
Just before we go into the details of best practices, let us first understand and define the term, stakeholder.
Stakeholder Defined
A stakeholder is a person, group of people, or an organization involved in a project, or affected by the project’s outcome. Stakeholders are individuals and organizations that have secured a position of interest in the project. The involvement and input of stakeholders help to define, clarify, change, and contribute to the triple constraints and most importantly, the success of the project. To ensure the project is successful, the project manager needs to identify stakeholders early in the project, determine their needs and expectations, and manage and influence those expectations over the course of the project.
Identify Stakeholders
First and foremost, we need to identify the stakeholders involved in the project as it’s very critical for a project manager to identify the requirements, needs, interest and authority vested in each stakeholder and other related matters at the very initial stage. Stakeholders can be divided into two groups; internal and external. Internal stakeholders refers to project sponsors, project teams, support staff and others while external stakeholders refers to project’s customers, competitors, suppliers, and other external groups that are potentially involved in the project. Every project manager needs to ensure that these two groups’ roles and responsibility do not overlap. They should also be reminded that identifying a stakeholder is an iterative process as there will be some stakeholders leaving and some coming on board during the projects’ life cycle.
Managing internal stakeholders, to a certain extend can be considered less problematic compared to managing external stakeholders. One of the many reasons is because of the impact external stakeholders have in the organization. For example, the external stakeholders are not employees of the company hence they are free from some of the constraints that may normally be imposed on the employees of the company. Another potential problem has to do with solving conflicting interests between stakeholders by taking into account their level of influence on the project.
Stakeholder Register
A stakeholder register is a document that should contain all the basic information on all the stakeholders who are involved in a project which can be classified into:
Identity Information:
Should contain the stakeholders’ name, position, roles and responsibilities and contact information.
Stakeholder Classification:
Should contain information to determine if the stakeholder is internal or external to the project and also if the stakeholder is ¹ supportive, ²resistant, ³neutral, ⁴leading or
⁵unaware of the project as per PMBOK.
Assessment Information:
Should contain the stakeholders’ major requirements and expectations, and phases of the project in which stakeholders have the most interest in as not all stakeholders will be required for all the phases of the project.
Stakeholder Influence Level:
Should contain information of influence/ interest level that a stakeholder has on the project. This can be elaborated in detail by using the Power/Interest Grid™ as per best practices.
Stakeholder Power/Interest Grid
A power/interest grid can be used to group stakeholders based on their level of authority and their level of concern (interest) for the project’s output. The matrix below can be used to gauge the most influential and most impacted stakeholder groups so that a focused stakeholder management strategy and plan can be developed and executed. Once the Power/Interest Gris is obtained, it can be added into the Stakeholder Register for reference.
Stakeholder Engagement Management
Stakeholder engagement is key to the success of a project and a project manager plays an important role in ensuring that stakeholders are engaged at all times. As Will Rogers says, “Even if you are on the right track, you will get run over if you just sit there.” What this means is that if the project manager fails to control the level of stakeholder engagement from the start, even if the project is progressing well, it tends to fail as potential complications might arise. Project managers can’t control the stakeholders but can control their engagement level in a given project; they can ensure all stakeholders are actively involved in relevant project activities rather than just attending and acting as an observer. Project managers should have interactive dialogues with stakeholders using the agreed mode of communication and establish schedules schedules that have activities related to each stakeholder. This ensures that the stakeholders don’t have responses such as “I don’t know” or “I’m not aware” when the deliverables are expected from them.
Conclusion
Project managers are often faced with challenges; especially when managing stakeholder requests. At times, they are unable to entertain or execute all the requests made to them. The project manager, together with all stakeholders, needs to commit to a number of critical elements to ensure a solid working relationship that will lead to project success; such as confirming commitment stakeholder commitment, agreeing on project goals, objectives, vision, and even communication methods.
Project Managers must learn to identify, understand, and work with a variety of stakeholders. Suggestions for handling these situations include the following:
Be clear and take a stand with the project elements such as scope, budget and schedule from the start of the project.
Explain the consequences that might happen when a stakeholder submits a request beyond the agreed upon scope.
Have a contingency plan to avoid any surprises.
Ensure stakeholders do not go beyond their level of power/influence, consideration of the impact to the project is important.
¹supportive- stakeholder is aware of the project and supportive of changes beneficial to the project’s success.
²resistant- stakeholder is aware of the project yet resistant to changes.
³neutral- stakeholder is aware of the project but neither supportive or resistant. More of an observer.
⁴leading- stakeholder is aware of the project and actively engaged to ensure the project’s success.
⁵unaware – stakeholder has no information about the project.

Written by:
Muralitharan Ramalingam, Mohana Dass Visvanathan Nair, Foong Mei Yuen, Sarawanan Nadras
Corporate Program Management, MIMOS BERHAD
Technology Park Malaysia
Kuala Lumpur, Malaysia
Tags: Stakeholder Management

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