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Driving Project Success through Stakeholder Management

Although it has been informal in the past, Stakeholder Management has long been a key differentiator for the truly great project managers.  In the most recent Project Management Book of Knowledge (PMBOK®) 5th edition, the importance of Stakeholder Management has been elevated as a new Knowledge Area. Stakeholder Management consists of the 4 processes:

1. Identify Stakeholders
2. Plan Stakeholder Management
3. Manage Stakeholder Engagement
4. Control Stakeholder Engagement

In this blog, I will first discuss why Stakeholder Management is important, and then provide some tips for managing stakeholders successfully. 

I see Stakeholder Management as the perfect combination of two keys to project success:

1. Being Proactive 
2. Recognizing the Importance of and Focusing on People 

First, let's define what a stakeholder is.  PMBOK® 5th edition defines project stakeholders as "individuals, groups, or organizations who may affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of a project" (394).  With this definition, there can easily be hundreds of stakeholders on a large project.  Why is stakeholder management important?  Consider the following:

  • If I miss a key stakeholder in determining requirements, the odds are high that additional scope will need to be added later when the project is already underway. This not only puts a strain on the schedule, budget, and resources, but also could require some rework for what has already been completed!

  • If I don't engage key executive level stakeholders, my project could unexpectedly be canceled.  This could either be because an executive disagrees with (and was not consulted on) the direction of the project, or simply because the executive has limited knowledge about the project, putting it near the top of the list when there is pressure to cut cost.

  • Stakeholders can be advocates for the project!  They can get other stakeholders interested, excited, and engaged in what's going on.

  • Stakeholders are often "eyes and ears" that can help the project manager to be proactive. They see and hear things that could impact the project. Likewise, they can relay when activities of the project may impact other areas.

  • The stakeholders not only provide requirements, but also provide the best ideas.  Getting and keeping stakeholders engaged increases the quantity and the vetting of ideas for improving the project.

I know what some of you old-timer PMPs are thinking -- "I've been doing stakeholder analysis for a long time and know that it was in earlier editions of the PMBOK®."  You're right!  Identifying stakeholders is nothing new.  Identifying stakeholders was (and is) a key input into our Communications Management Plan -- making sure that the right stakeholders are sent the right information at the right time.  What is new is WHY we communicate the way we do to the different stakeholders.  There is a whole new plan for this -- the Stakeholder Management Plan!  Our stakeholders are a broad and diverse group, with different personalities, different communication styles, and different communication needs.  Some stakeholders may be most engaged when sent a bulleted email, while others may prefer a phone call, while others may prefer meeting for coffee.  Also, the engagement of some stakeholders is more important to project success than others.  An eye-opening example that I recently encountered -- I had been posting meeting minutes onto SharePoint and emailing out the link.  I did this for months.  Several months later, an executive (and important consumer for the meeting minutes) let me know that he read most of his email on his phone, and could not access SharePoint that way.  This was a miss on my end for stakeholder management -- because I overlooked the technology need / communication preference, that stakeholder was not nearly as engaged as he should have been.

So now that I've covered the importance of stakeholder management, I promised a few tips.  See below.

Tips for Identifying Stakeholders:
Start identifying stakeholders close to the project and work your way out

    o  Project Manager -> Core Team -> Steering Committee -> Key Business     contacts ->     Key IT Contacts -> Other stakeholders in the company (e.g. Legal, Purchasing) -> Other     stakeholders outside of the company (e.g.,     external vendors, regulatory agencies,     customers)

    o  Identify as many stakeholders for your project as possible

Assess stakeholders based on interest, power, influence, and impact. This will help you to categorize and group stakeholders in a way that makes managing them easier.

Identified stakeholders can be a great source for determining unidentified stakeholders.  Don't hesitate to ask.

Looking at the stakeholder register for a previous similar project may help. Likewise, lessons learned or change requests from similar projects can sometimes indicate where stakeholders have been missed in the past.

The output of this process is your Stakeholder Register, which lists all stakeholders, their needs and expectations, and your assessment/classification information.
Tips for Planning Stakeholder Management:
It is important to assess the current levels of engagement for your stakeholders, as well as the planned engagement levels that are required for project success. PMBOK® 5th Edition recommends classifying the engagement level of stakeholders with the following classifications:
                    o Unaware
                    o Resistant
                    o Neutral
                    o Supportive
                    o Leading

A matrix is a good tool for comparing current vs. desired engagement levels for each stakeholder.  The matrix should have the stakeholders in a column on the left, and the engagement classifications along the top row.

The output of this process is your Stakeholder Management Plan.  It should contain the Desired and Current engagement levels of key stakeholders, and also what approaches will be taken in order to engage stakeholders to the desired levels.
Tips for Managing Stakeholder Engagement:
Use your plan
Use an Issues Log
Building trust is a priority
Tips for Controlling Stakeholder Engagement
Be sure to update your Stakeholder Register throughout the project, adding and removing stakeholders as appropriate

How do you know how successful you are in engaging key stakeholders and improving their satisfaction?  You should build some approaches to do this into your Stakeholder Management Plan, and then use those to monitor (and adjust where necessary) your stakeholder engagement approaches.  For example, you might consider using surveys.  Or possibly, you will have scheduled touch-base sessions with certain stakeholders where you confirm engagement.  Another option might be tracking the quantity/quality of updates that are provided by the stakeholder.
At this point, you may be thinking that all of this stakeholder management will take too much time.  There are "fires" to be put out for adjusting the project schedule or changing the project scope.  But think about the best run projects and the best project managers from your past.  The odds are high that the key stakeholders were engaged in the project and were critical to its success.  Being more proactive through Stakeholder Management can reduce those "fires" down the road.

I’d be interested to hear about your experiences.  Please comment with your Stakeholder Management success (or horror) stories.


About The Author

Senior Consultant, PMP
CJ is a Senior Project Manager in our Cincinnati Project Services Practice