Managing stakeholders effectively is a crucial part of project management; I know this personally, based on my experience working with software companies, major retailers, and healthcare companies. Regardless of the type of industry you’re in, understanding how to navigate and manage stakeholder relationships can impact a project’s success or perception of the project’s health. I’ll cover what I believe are the top five most important aspects of managing stakeholders, particularly in technical environments.
What is a Stakeholder?
According to the Project Management Institute (PMI), a stakeholder is “an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project” (Project Management Institute, 2021). In other words, stakeholders are anyone who has a vested interest in the outcome of a project. They can be internal, like team members and executives, or external, like customers, vendors, or regulatory bodies.
Stakeholders play a significant role in projects because they provide resources, set expectations, and have the power to influence project outcomes and other stakeholders. Properly managing stakeholders ensures that their needs and expectations are met, contributing to the overall success of your project (Westland, 2020). Improper management will result in a confusing and potentially chaotic scenario in which the project manager has to spend time unexpectedly on distractors like misinformation, white noise, concerned and vocal stakeholders (not in a good way), and issues that may be specific to the office culture you’re in.
Indicators of Proper Stakeholder Management
Managing stakeholders is not just about keeping them informed; it’s about actively engaging with them and ensuring their needs are met throughout the project lifecycle. Here are a few indicators that stakeholders are being managed the right way:
- Clear Communication: Stakeholders receive regular updates and understand project progress, risks, and changes.
- Stakeholder Satisfaction: Feedback from stakeholders shows a high level of satisfaction with how their interests are being addressed.
- Active Involvement: Stakeholders are actively involved in key project decisions, and their input is considered valuable.
- Conflict Resolution: Conflicts are identified and resolved promptly, minimizing impact on the project (Rodriguez, 2021).
Each of these indicators would merit their own blog post (so stay tuned!), but for this review, identifying them is a good starting point.
Top 5 Aspects of Managing Stakeholders
1. Identify and Prioritize Stakeholders
The first step in managing stakeholders is identifying all individuals and groups who may be impacted by or have an interest in the project. This involves creating a comprehensive stakeholder log that lists each stakeholder, their level of influence, and their interest in the project.
Prioritization is important; not all stakeholders have the same level of influence or interest, and managing their expectations accordingly is key. For example, a senior executive sponsor will have different needs and expectations compared to your department director, an end-user or a supplier. Tools like the Power-Interest Grid can be used to categorize stakeholders based on their power and interest in the project, which helps in determining the level of attention and communication each stakeholder requires (Project Management Institute, 2021). My personal favorite is the RACI (Responsible, Accountable, Consulted, Informed) matrix – this form literally captures the role of each person associated with the project by their needed level of interaction. While not as simple as a Power-Interest Grid, a RACI can drill down to a stakeholder’s interaction with specific deliverables, so it’s scalable and precise.
2. Develop a Stakeholder Engagement Plan
Once stakeholders are identified and prioritized, the next step is to develop a stakeholder engagement plan. This plan outlines how the project team will communicate and interact with stakeholders throughout the project lifecycle. Many project teams make this a component of the overall communication plan as the strategy to engage audiences external to the project’s core teams. The plan should detail the methods of communication (e.g., email, meetings, reports), frequency, and the level of detail required for each stakeholder group.
An effective engagement plan also involves understanding stakeholders’ needs, concerns, and expectations. Conducting stakeholder analysis workshops or interviews can provide valuable insights into what stakeholders expect from the project and how they prefer to be engaged (Williams, 2022).
3. Maintain Regular and Transparent Communication
Communication is the cornerstone of effective stakeholder management – and ultimately, effective project management. It’s essential to establish a regular communication schedule or cadence that keeps stakeholders informed of project progress, changes, and potential risks. This can be achieved through various channels such as status reports, meetings, or project dashboards. Depending on the size and culture in your workplace, communication forums can be as simple as a five-minute huddle with certain stakeholders after a weekly leadership meeting. A good practice is to integrate these touchpoints with stakeholders into their current routine, as opposed to adding yet another meeting on their calendars.
Communication transparency builds trust and credibility. When stakeholders feel they are being kept in the loop and that their concerns are addressed promptly, they are more likely to support the project. Regular communication also helps to manage expectations, reducing the risk of misunderstandings or surprises that could derail the project (Westland, 2020). Think of your project health as a story that’s playing out realtime, and YOU want to control the narrative.
4. Manage Stakeholder Expectations and Resolve Conflicts
One of the most challenging aspects of stakeholder management is managing expectations. Stakeholders may have different and sometimes conflicting expectations about the project outcomes. It’s crucial to set realistic expectations from the outset and manage any changes throughout the project lifecycle – and there will be changes.
Conflict resolution is also a key part of managing stakeholders. Conflicts are inevitable in any project, especially when multiple stakeholders with varying interests are involved. Effective project managers should be skilled in conflict resolution techniques, such as negotiation, mediation, or even escalation when necessary. The goal is to resolve conflicts quickly and amicably to maintain stakeholder support and keep the project on track (Rodriguez, 2021).
5. Continuously Monitor and Adapt Stakeholder Management Strategies
Stakeholder management is not a one-time activity, but a continuous process that requires continual monitoring and adaptation. Stakeholders’ needs, interests, and levels of influence can change throughout the project, and it’s important to adjust your strategies accordingly.
Regularly reviewing the stakeholder engagement plan and gathering feedback can help identify any changes in stakeholder dynamics and allow the project team to adapt their approach. This could involve shifting communication methods, adjusting involvement levels, or even re-prioritizing stakeholders (Williams, 2022).
Tools for Effective Stakeholder Management
Several tools can help in the management of stakeholders:
- Stakeholder Register: As mentioned earlier, this document lists all stakeholders, their contact information, role, influence, and interest in the project. This is often the first step in stakeholder management and serves as a foundational tool for the entire process (Project Management Institute, 2021).
- Power-Interest Grid: A visual tool that helps categorize stakeholders based on their power and interest in the project. This tool aids in prioritizing stakeholders and tailoring communication strategies accordingly (Westland, 2020).
- RACI Matrix: A responsibility assignment matrix that clarifies roles and responsibilities for tasks within the project, ensuring that stakeholders understand their involvement and what is expected of them (Rodriguez, 2021).
- Project Management Software: Tools like Microsoft Project, JIRA, or Asana can help manage communication, tasks, and updates in one central location, making it easier to keep stakeholders informed and engaged (Williams, 2022).
In conclusion…
By following this approach, 1) identifying and prioritizing stakeholders, 2) developing a comprehensive engagement plan, 3) maintaining transparent communication, 4) managing expectations, and 5) continuously monitoring and adapting strategies, you as the PM can ensure that stakeholders are engaged, satisfied, and supportive throughout the project lifecycle. As alluded to here, effective stakeholder management requires a combination of strategic planning, strong communication skills, and the right tools to facilitate engagement and collaboration.
Project Management Institute. (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide)–Seventh Edition. PMI.
Rodriguez, P. (2021). How to Effectively Manage Stakeholders in Project Management. Retrieved from https://superblog.com/articles/how-to-effectively-manage-stakeholders-in-project-management.
Westland, J. (2020). The Project Management Life Cycle: A Complete Step-by-Step Methodology for Initiating, Planning, Executing & Closing a Project Successfully. Kogan Page.
Williams, T. (2022). Stakeholder Management in Healthcare Projects. HealthTech Publishers. Retrieved from https://healthtechpublishers.com/stakeholder-management-healthcare.