However, identifying stakeholders and managing their expectations takes effective leadership skills, excellent communication and an understanding of what drives the individuals involved with the project.
Good stakeholder management not only ensures the working environment runs smoothly, it helps to mitigate risk, align business goals and eliminate delays.
Who are my stakeholders?
Broadly speaking, stakeholders are any individual or organisation – both internal and external – that will be affected by the completion of a project.
This will not always be senior management and identifying the most important stakeholders early on in the project lifecycle can help to provide a framework for its progress.
Common stakeholders include:
· Government agencies
· The community
· PR and marketing agencies
· Resource managers
Apportioning stakeholder resources
With a wide variety of stakeholders potentially being involved or affected by project outcomes, managers will want to prioritise how much time and resources they want to allocate to boosting relationships with each group.
Not all stakeholders have equal interest or influence, so isolating the most important people will give you a much better idea of where to focus your efforts.
A common practice for achieving this is through using a 2×2 matrix, with a stakeholder’s level of influence on the vertical axis and level of interest on the horizontal axis – both on a sliding scale from ‘high’ to ‘low’.
Research your stakeholders and allocate them to one of the four grid squares, each traditionally associated a management value.
High power/high interest: These stakeholders should be managed closely, as they are often considered the key players.
High power/low interest: This group needs to be kept satisfied. While they may not be particularly involved, they have sufficient power to require careful handling.
High interest/low power: Any stakeholders in this band should be kept informed of progress and relevant changes.
Low interest/low power: Individuals or organisations in the low interest and low power group should be monitored, but require the least amount of resources.
Factors affecting stakeholder interest
A stakeholder’s interest in a project will depend on a number of factors, which can alter and shape their perspective over time.
Managers should aim to identify these contributing issues and judge how they affect the overall progression of the project – either positively or negatively.
These factors include:
· Their role in the project or organisation
· History of commitment and associated relationships
· The threats or benefits to their organisation
· Risk of losing credibility
· Prejudices or old alliances
· Brand considerations
· Desire for innovation
Managing stakeholder expectations
However, it is essential for managers to first understand why these particular stakeholders are important, what their requirements are, and whether their desired outcomes are realistic.
A successful project manager should:
· Define the project aims to stakeholders from the outset
· Provide regular progress reports
· Show how progress is resulting in value
· Encourage delegation where necessary
· Open up less formal lines of communication to accommodate busy stakeholders
· Trace accountability and record decisions/agreements
It is also important to be agile to changing market conditions that could ultimately affect stakeholder expectations.
Project managers must constantly reassess their existing preconception of stakeholder motivations and attitudes to account for the evolving business landscape.
There is rarely a one-size-fits-all solution for every stakeholder, meaning a range of communication channels and approaches must be used to achieve optimal results.