In project management, a stakeholder is anyone who has a vested interest in the end result of a project and holds a stake in the project's outcome. Customers, agents, recipients, managers, sponsors, etc., are all considered project stakeholders. Project Management Institute (PMI) officially defines a stakeholder as: 

"An individual, group, or organization who may be affected by, or perceive itself to be affected by a decision, activity or outcome of the project."

Since stakeholders directly impact whether a project will succeed or fail, they must be identified and managed throughout the life of a project. Prioritizing stakeholders is not a difficult task, but it does require organizational skills and a significant time investment. According to Joseph Heagney in his popular book, Fundamentals of Project Management, a project manager can prioritize stakeholders by asking the following three questions: 

1. Who benefits from the project?

2. Who contributes to the project?

3. Who is impacted by the project?

After answering these three questions, a project manager must analyze how each stakeholder relates to the project at hand. A stakeholder grid also known as a power/interest grid, as displayed below, is an excellent tool to help manage stakeholders

The goal of creating a stakeholder grid is to ensure that each stakeholder is identified, assigned a role, and has a personal, specific plan to develop their visible commitment. Once stakeholders are identified, they are analyzed based on their interest in the project and their organizational influence or power level. When these dynamics are determined, a project manager can place them in the designated grid quadrant and develop a plan to interact with stakeholders based on their occupied quadrant. The stakeholders with high interest or power can positively or negatively affect the project in a significant way.

Stakeholder engagement represents the project manager's effort to manage and execute the project while involving stakeholders and understanding their concerns. Some stakeholders are critical to a project's success. A project manager must have these specific stakeholders engaged for the project to succeed. There will be different reasons and motivations to involve various stakeholders.

The stakeholder engagement assessment matrix, as displayed below, helps with overall stakeholder management by outlining current and desired levels of project engagement. The stakeholder engagement matrix is a complement to the stakeholder register. Once created, a project manager can create and execute a plan to push each stakeholder toward the desired level within the project.

Not all stakeholders will agree with every element of the project as stated in the project charter. Many various stakeholders are affected differently by the project deliverable. Each one will have multiple levels of technical expertise and product or project knowledge. 

To maximize stakeholder interaction and push everyone in the same direction, a project manager should assess their overall experience and project knowledge levels. It's a common problem for a project manager to be more knowledgeable on a topic than a stakeholder. A project manager should remember to speak to the stakeholder's level of understanding to be effective. The Audience Guide to Knowledge and Communication, displayed below, is a useful tool for project managers to utilize to align communication with stakeholders.

Project managers must make adjustments based on the stakeholder's culture. Simply practicing self-awareness of one's current cultural environment can help a project manager determine whether changes must be made in managing stakeholders in different corporate settings. A person's culture should always be a consideration factor when interacting with stakeholders.

Geert Hofstede, a Dutch social psychologist, found in his 1974 IBM employee study that a society's value system is a blend of five key dimensions which distinguish behavioral indicators within the working culture. The inclination of individuals to use a comparable combination of these dimensions results in the formation of a unique culture. The Five Cultural Dimensions, displayed in the figure below, can be used by project managers when managing stakeholder culture.

Understanding these cultural dimensions will benefit a project manager in developing trust with project stakeholders. Any relationship with a stakeholder that lacks trust is not a healthy working relationship. This lack of trust becomes a huge risk as time progresses. Trust is especially critical when a project manager is managing multicultural stakeholders.

Remote, external stakeholders present unique challenges to a project. This has become our reality in the wake of the Covid-19 pandemic as more project stakeholders are remote. Project managers are usually forced to engage and communicate with these stakeholders via teleconferencing, internet, video conferencing, skype, and other technological media.

Utilizing these communication media can often create significant limitations in communication that lead to relationship barriers. Getting to know each stakeholder via one-on-one interaction while using the five cultural dimensions as a tool can help alleviate or prevent initial distrust and allows a project manager to map out an appropriate approach to working with remote, external stakeholders. A project manager is encouraged to invest time and effort in one-on-one interaction when working with these stakeholders.

Due to differing cultures and backgrounds, it can be difficult to unite project stakeholders and manage them throughout the project lifecycle. Displayed below is the four-step process to use to manage disagreements with stakeholders:

Never forget the importance of project stakeholders. They are integral part of a project for a reason. A project manager needs them to successfully complete a project. You can rely on some or all of the stakeholder management tools presented in this blog post to facilitate good working relationships and adequately communicate with stakeholders on your project.

References:

A Guide to the Project Management Body of Knowledge: (PMBOK Guide). Project Management Institute, 2017.

Heagney, Joseph. Fundamentals of Project Management. AMACOM, 2016.