Stakeholder management can make or break a project, and it's more complex than a project manager thinks. Here's how to guide, influence, and communicate with everyone affected by the project.
Stakeholder management is critical to the success of a project. When key people are notified and on task, the project runs smoothly, but when those who are affected by or have an impact on the project are excluded, the project can collapse.
Stakeholder management is important, but many project managers find it difficult to implement effective stakeholder management, and often, it's a top-down problem, starting with the CIO.
IT can't succeed without good stakeholder coordination and management," says Barry Brunsman, head of consulting at professional services firm KPMG. As a result, Brunsman and others suggest that CIOs should be intentional about stakeholder management, develop the skills needed to excel at this task, and create processes to ensure that this work is an integral part of all IT projects and digital initiatives.
Brett Tucker, an adjunct professor of cyber risk management at Carnegie Mellon University's Heinz School, said, "This is an important issue to focus on, and CIOs can and should set the tone and practices for effective stakeholder management. ”
The rewards of doing so are enormous, as having and executing a sound stakeholder management strategy can dramatically improve individual, team, project, and company performance.
This is a task that should not be overlooked, because if it is overlooked, it puts the success of the project at risk," Tucker added.
Here's a high-level guide to effective stakeholder management.
Definition of stakeholder management
Stakeholder management is a process of identifying, engaging, organizing, and improving relationships with any individual, functional group, or internal and external parties that may be affected by or have an impact on the outcome of a project. It is an ongoing, purposeful process that must be guided according to the established plan that the organization must execute.
Stakeholder management has long been critical to the success of a project, but in the modern era, it has become even more critical and challenging as the number of stakeholders in a typical enterprise plan has increased, and these stakeholders are now often geographically dispersed, making the organization of communication, coordination, and collaboration more complex.
Mike Shaklik, Partner and Global Head of CIO Consulting, Infosys Consulting, said: "We are seeing a growing need for stronger relationships, but it is often more difficult to build them now. You have to incorporate the principles of stakeholder management into project delivery so that you can ask better questions, have better conversations, and ultimately achieve better results. ”
It is also important to note that stakeholder management involves much more than the word "management" implies. Stakeholder management is more about directing, influencing, communicating, and coordinating with stakeholders than actually managing them.
As Samir Datt, Global Head of Technology Strategy and Architecture at consulting firm Protiviti, explains: "For me, the most basic form of stakeholder management is having structures, processes, and relationships to ensure that we get important priorities, risks, and metrics from stakeholders to successfully complete a project, which is to be able to define project value, communicate progress, and demonstrate that the project meets stakeholder expectations." ”
Benefits of stakeholder management
There are many benefits that can come with well-executed stakeholder management, including:
Identify and include all stakeholders: Stakeholders vary from project to project, and not all stakeholders are equally important to the execution and success of a project. Additionally, the need for stakeholder engagement may vary as the project progresses. A good stakeholder management plan can help project leaders identify all stakeholders and determine which stakeholders need to be involved in which phases of project execution. "These are key questions that need to be answered accurately, because if you identify the wrong people as stakeholders, you end up with either the wrong information, or too much information, or contradictory information — and then you're going down the wrong path entirely," said TE Wu, CEO and Chief Program Officer at PMO Advisory and associate professor at Montclair State University, and a project management professional.
Improve role clarity and focus: Stakeholder planning can help project managers set realistic expectations for each type of stakeholder in any given project, thereby increasing the clarity of their roles.
Higher productivity: Stakeholders who understand their own and others' roles are more likely to stick to tasks, increasing productivity and increasing the odds that the project will stay on scope from the start.
Increase engagement: A well-thought-out stakeholder management plan explains how the project will impact each stakeholder, allowing them to understand how completed initiatives can benefit their day-to-day roles. This insight helps to keep stakeholders engaged, even if they're already stuck in the mire of day-to-day tasks.
Increased project leader insight: Increased engagement means that stakeholders are more willing to share their views on the project – information that can better shape the direction of the project and the plan for its successful completion. "At the very least, this helps you incorporate the knowledge, purpose, and perspective of your stakeholders into what you're supposed to do," Wu said. ”
Reduce risk: A clearly developed and executed stakeholder management plan can reduce conflict by improving role clarity and engagement, and it can also help reduce other risks that exist in the successful execution of the project, as the stakeholders involved are better able to identify challenges and issues that may pose a hindrance. "Good stakeholder management is a mechanism that helps you identify potential problems early and take the necessary corrective actions to prevent them from occurring," Datt noted. ”
Stakeholder management processes and plans
Stakeholder management involves multiple components, from identifying stakeholders, to determining which stakeholders need what information, and when that information is needed. Each component is critical, and one of them flows into the next as an important part of developing a strong stakeholder management plan.
Identify stakeholders.
The project manager should first conduct a stakeholder analysis to create a list of stakeholders who should be involved in the project. The results of the analysis should be recorded in a register of stakeholders and should include the names of the stakeholders, their current roles, the stakeholders' roles in the project, contact information, and their impact on the project results. In this way, stakeholder analysis tools can be used to help identify stakeholders and assess their importance to the success of the project.
The Stakeholder Register is a baseline that sets the tone for all stakeholder communications throughout the project lifecycle, and this important document explains why each stakeholder was selected and what the purpose of that stakeholder is within the scope of the project.
Here's an example of a stakeholder register:
Identify and document the roles and impacts of each stakeholder.
The stakeholder roster should clarify the role and impact of each stakeholder. In order to accomplish this information, you will not only need to use the information from the stakeholder analysis process, but you will also need to meet with the stakeholders (ideally) to determine their interest in the project and their impact on the project's execution and results.
Prioritize stakeholders.
After conducting a thorough stakeholder analysis and documenting each person and their role in the stakeholder register, it is necessary to prioritize stakeholders based on the level of stakeholder involvement required and the expected impact on the project.
The priorities are as follows:
High-impact, high-stake stakeholders are those who play a key role in the success of the project and have a significant impact, such as a project sponsor or business leader.
High-impact, low-stake stakeholders may be secondary leaders who may not currently have a direct stake but can influence the outcome of the project.
Low-impact, high-stakes stakeholders are likely to play more of a guiding and supportive role, not directly involved but able to rally forces or play a disruptive role.
Low-impact, low-interest stakeholders may have no influence on the project and are only occasionally interested in the project's progress. These stakeholders may be working in other departments that are not directly affected by the project.
Develop a communication plan for stakeholders.
Effective stakeholder management requires comprehensive communication with stakeholders. This communication must involve the right individuals at the right time, and the right communication channels must convey the right message.
This should include how to report milestones to ensure that all stakeholders are informed so that they have the information they need when it comes time to make a decision," said Krista Phillips, Project Management Professional Certified Project Management Professional, Project Management Institute (PMI) Regional Chapter Leader, and IT Project Manager.
The project communication plan should include:
A description of the type of communication.
Frequency of communication.
Format (e.g., email, person-to-person communication, **.)
Participants in each type of communication.
Distribution of communication.
Final deliverables.
The person in charge of each communication.
Establish a mechanism for collecting information from stakeholders.
According to Brunsman, stakeholder management requires more than just communicating project information to stakeholders, but should also include opportunities for stakeholders to share their views and insights with project managers and their supervisors. "Make sure communication isn't a one-way street," Brunsman advises.
Establish a governance structure.
Tucker said that the strongest stakeholder management plan should also include governance to ensure that requirements are met and that all participants contribute as required.
Therefore, CIOs, their direct reporters, project managers, and other leaders should identify mechanisms for validating and tracking program progress.
Tucker recommends using the Rasci Matrix project management tool to identify, assign, and monitor who is doing what, and more specifically, who is responsible, accountable, supporter, advisor, and informant.
Stakeholder management best practices
In addition to developing a stakeholder management plan, there are some best practices that can help you manage stakeholders smoothly, revolving around the need for transparency, inclusivity, clarity, and timeliness.
Transparency: Transparency is critical when managing stakeholders, as it helps build trust, allows you to establish a direct connection with the leader's intentions, and helps stakeholders decide whether or not they are willing to buy a project.
Clarity: Strong project leaders are able to communicate clearly and make complex things simple. Providing clarity also allows stakeholders at all levels to focus and focus on the task, making it easier to keep the project on track.
Inclusivity: As teams become more and more dispersed, inclusivity becomes paramount. Whether it's different perspectives, experiences, backgrounds, genders, beliefs, or other factors, inclusion means applying equity across the board, rather than making concessions to just certain stakeholders.
Timeliness: Managing stakeholder management schedules and ensuring timely communication is critical to ensuring effective relationships with all stakeholders involved in the success of the project.