On this page:

• The Significance of Stakeholder Management in Project Success
• Identifying and Prioritizing Project Stakeholders
• Engaging Stakeholders for Project Alignment and Support
• Mitigating Risks and Challenges through Stakeholder Engagement

Once upon a time, in the state of Transylvania, Project Management Professionals (PMPs)^® had identified a significant risk to their projects. The existence of the vampire, Count Dracula, was creating quite a few problems on the human resource front and many projects were running behind schedule because of staffing problems. However, the risk response planners commissioned a study to see if the Dracula menace could be mitigated completely. Their research discovered that a wooden stake through the heart of the Count would eliminate the risk entirely. So the PMPs^® sent out a request for quotation to find someone to wield the stake. When the contract was awarded (during the Conduct Procurements process), their supplier evaluation proved accurate and the Count was safely dispatched. However, the PMPs^® were anxious in case another vampire should emerge, so they maintained someone to hold the stake as a risk mitigation strategy in future projects. And this is why project managers to this day place great importance on stakeholders.

The Significance of Stakeholder Management in Project Success

While this story is fanciful, the importance of stakeholders in any project most certainly is not. So important is the management of stakeholders that the Project Management Institute (PMI)^® factored out Project Stakeholder Management into its own knowledge area in the Guide to the Project Management Body of Knowledge (PMBOK^® Guide).

Stakeholders are often regarded by project managers as risks and that is a reasonable approach to take. A risk is an uncertainty and stakeholders, being people, can change their minds and no longer support the project. For a PMP^®, every stakeholder must be managed throughout the project and supplied with the specific information that they require. Depending on the individuals involved, they should be engaged in the planning and execution of the project – providing input to the decision-making process and even being allowed to make decisions where appropriate. In essence, it is important to know your stakeholders.

But before formulating a detailed profile of each stakeholder, the project manager must identify each and every one. This can be difficult and should be approached seriously. The immediate stakeholders are easy enough to find: the people working on the project team, those who approved and financed the project and other departments within the organization. More difficult to identify are the external stakeholders. The project manager needs to be aware of any regulatory body that controls this sector and to learn about their requirements for the project’s deliverables. Similarly, the project manager needs to engage with the sales and marketing people to be clear what the target audience for the deliverables is. It can really help in the design process to identify potential end users and learn what they expect of our products and services.

Identifying and Prioritizing Project Stakeholders

Other potential stakeholders are those who are aware of the project but are not sure what it is about. This is a common problem with automation projects – people carrying out manual tasks often fear for their future when high-tech investments are rumoured. Projects are change agents, so the experienced project manager will realize that people generally fear change and need help to overcome their concerns. If layoffs will be a consequence of the project, then the human resource department becomes a stakeholder as it will have to deal with this.

Just like risks, PMPs^® are advised to prioritize stakeholders. However, instead of using probability and impact scales, stakeholders can be ranked in terms of concepts like power and interest in the project. Powerful, highly engaged stakeholders need to be managed closely, while those with less power and little interest just need to be monitored – this will remind PMPs^® of the Watch List of risks! Other factors can be used to classify stakeholders – you can look at stakeholders in terms of power and influence, or influence and potential impact. If you want a more detailed classification, you might try a Salience Model, which considers power, urgency and legitimacy.

Engaging Stakeholders for Project Alignment and Support

Once the stakeholders have been ranked, then it is important to determine their dispositions towards the project. Those with PMP^® training will recall the Stakeholders’ Engagement Assessment Matrix. This allows you to record the stakeholders’ current and desired dispositions towards the project. The PMI^® offers a choice of: Unaware, Resistant, Neutral, Supportive or Leading.

Strangely enough, unaware or neutral stakeholders are potentially more dangerous to a project’s success than resistant ones. At least with the resistant stakeholders, you know where you stand and can work to win them over to a supportive position. Some project managers (not PMPs^® I’m sure) believe that keeping unaware stakeholders in the dark is a good thing – by the time they find out what is going on, it will be too late. However, even if this is true, it will generate bad feelings and could do tremendous damage to the organization as a whole, if it is perceived to be less than upfront in its dealings. Similarly, neutral stakeholders can fall on either side, so they need to be engaged with so that the project manager can get the benefits clear in their minds before other influences come to bear.

Mitigating Risks and Challenges through Stakeholder Engagement

Stakeholder engagement requires a bit of planning. Identify key milestones in the project and ask yourself: who should contribute to this task and who should be informed when this task is complete? Keep them involved and keep them informed. Whatever you do, do not forget them.

If you would like to learn more about Project Stakeholder Management and other project management areas, please visit our training page. We run our project management courses online in our virtual classroom for your convenience. To get more details, please contact us directly.