Why Stakeholders Management is key to Project success?

Stakeholders

Before we talk about anything else, lets first under who stakeholders are?

A project stakeholder is an individual, organization, or group that-Takes an active part or interest in project activities, has a potential impact on a project, is affected by the project’s outcome, can be real or perceived. Stakeholders are people or groups that have something to gain or lose from the project. Some are supportive and some are opposed to the project.  Some have a lot of influence, and some have a little.  Some are easy to persuade, and some are not but they all have Stake.

Internal stakeholders - Project Sponsor, Project Investor, Project Manager, Project Team members.

External stakeholders - Vendor, Supplier, Customer, Subcontractors.

Let’s understand Stakeholder Management…

Stakeholder management is the process by which you communicate with and engage your company’s stakeholders, prioritizing them by importance and ensuring that all stakeholders feel valued. Through stakeholder management, you can acquire better business outcomes, while also developing long-lasting relationships.

• Identifying and prioritizing key stakeholders.
• Getting to know stakeholders and their preferred communication methods.
• Interacting with and relating to stakeholders based on their own goals.
• Determining how much influence a stakeholder has on core business operations.
• Beginning to influence and engage with the stakeholder, with the goal of improving the relationship

Stakeholder Identification

The first step is identifying the project’s stakeholders. Start listing down anyone and everyone who is affected by the project. It is surprisingly easy to miss out one key stakeholder that ends up having a extremely large ability to disrupt the project when they don’t feel that they are being adequately consulted. 

Therefore, identification of all the stakeholders, even the most minor ones, is vital.

• Who will be affected (positively and negatively) by your project?
• Who has an interest in your project?
• Who has power over your project?
• Who wants your project to fail?
• Who wants your project to be successful?

Once stakeholders are identified and listed, it is time to maintain Stakeholder register with their names, designation, role, expectations, preferred communication method, Impact, and influence on project and this is updated throughout the project life cycle.

Stakeholder Analysis

Once they are identified, the stakeholders are analyzed to determine their needs and wants, their roles in the project, and how the project affects them.

I. Power-Interest Matrix

There are two primary variables that define the stakeholder’s relationship with the project: Power and Interest.  Power is their ability to change or stop the project, and interest is the size of their overlap with the project’s goals. 

low power, low interest - Stakeholders need to be monitored to ensure they do not unduly influence the project.

low power, high interest - Stakeholders need to be kept informed to ensure they do not generate unnecessary influence on other stakeholders.

high power, low interest - Stakeholders must be kept satisfied. These stakeholders must have all their needs met to ensure they do not derail the project over small issues.

 
high power, high interest  - Stakeholders are major stakeholders and must be actively managed to ensure they remain supportive.

II. Stakeholder Engagement Assessment Matrix

This matrix represents where the stakeholder is now vs. where the stakeholder needs to go. The five columns correspond to the five possible current locations of the stakeholder:  Unaware, opposed, neutral, supportive, and leading.  Each stakeholder is placed in one of the columns in relation to their current (C) status, and their desired (D) status.

This provides the analysis and help to establish a plan for bringing the stakeholder from their current status to the desired status. This plan might involve regular communication, open houses, production of reports and analyses, monitoring, or anything that will win them over and generate their interest and involvement.

Stakeholder Communication

Once there is clarity on mode and frequency to communicate and engage with your stakeholders, it is time to create a Communications Strategy and Plan to deliver the right message to the right stakeholder in a timely manner.

The Communications Strategy and Plan guides the project manager’s engagement with stakeholders. Understanding the stakeholder’s objectives, influence, power, and communication styles are value inputs to the communications strategy. The strategy should focus on what information needs to be communicated, the medium, and regularity. The strategy should also segment the stakeholders into their constituent groups. Stakeholders may be segmented based on influence-power mapping, organization, role, etc. Communications should be tailored to the stakeholder segments based on their needs. The size, complexity, and criticality of the project will dictate the regularity and medium of the project communications. Communications should be on a regular cadence to manage expectations. Overlapping delivery methods also help to ensure the messages are received. The plan should specify information such as-

§  The type of information that should be communicated -the key message.

§  The engagement approaches. 

§  The communication channels - e.g., emails, newsletters, video calls, audio calls etc. 

§  Frequency of engagement and the phase of the project 

§  Whether it should be high level or detailed level?

Stakeholder Engagement

Now its time to execute a Communications Strategy and Plan that was created earlier.

While actively engaging with the stakeholders, there is a need to constantly monitor them to identify whether they may have issues with any development of the project. Take necessary action to address them to get their continuous support. Carefully select a suitable engagement approach based on the type of stakeholder. For example, costly approaches like face-to-face meetings, extensive consultations etc. can be applied with the stakeholders who has high power and high interest -the key players in your project. Less expensive methods such as newsletter and emails can be reserved for those who you should put minimum effort on.

Then measure the effectiveness of your engagement strategy and apply necessary adjustments to improve it as needed.

Stakeholders want to be involved in the business. They want to feel as though their time is valued, as though they are being notified of major events, and that they are being consulted when applicable. Investors and team members can be kept on the same page through regular communications, such as meetings and newsletters. This allows the business to present the information that it needs to present in an organized fashion.

During these communications, investors should be treated as partners rather than a source of capital. They should be engaged as colleagues and peers, and their contributions should be acknowledged. Stakeholders have responsibilities to the company, just as the company has responsibilities to them.