What is a Project Stakeholder?
A project manager is not an island, and he does not operate alone when managing a project. Project management is a collaborative endeavor. There are many people involved in the inner workings of a project. The project manager, project sponsor, and project team roles have already been addressed in previous posts. The broader part of the project stakeholder will be addressed in this post.
The Project Management Institute defines a project stakeholder as:
"individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion."
Based on PMI's definition, a stakeholder can be almost anyone, and they often contribute vital resources to the project leading it to successful completion. Examples of project stakeholders include but are not limited to:
customer or end-user
prospective customers
project manager
project team
project sponsor
program and portfolio managers
project management office (PMO)
functional or operational managers within the organization
senior executives
analysts
government
shareholders
alliance partners
suppliers
lenders
trade associations
interest groups
public
Stakeholder management is the process where the project manager identifies his key stakeholders and attempts to win their support. Stakeholder analysis is the initial step in stakeholder management. A project manager and the stakeholder determine the part the stakeholder will play in a project.
Stakeholders are typically involved in project planning and managing and often assist in the following project activities:
create the project charter
create the project scope statement
develop the project management plan
approve project changes
serve on the change control board
identify requirements
manage risk
Since a stakeholder can be almost anyone on a project, it is helpful to complete a stakeholder analysis to identify and understand the needs and expectations of each stakeholder. The purpose of conducting a stakeholder analysis is to reveal stakeholders who will be solid supporters or strong project opponents. A project manager must identify the project stakeholders and attempt to win them over as soon as possible. A stakeholder analysis will identify, prioritize and understand project stakeholders.
The benefits of conducting a stakeholder analysis are that it allows the project manager to:
organize the project
win resources
build understanding
Stakeholder analysis typically indicates a series of techniques or tools to identify and recognize the needs and expectations of project stakeholders. The result of stakeholder analysis is a list of stakeholders and relevant information such as their expectations, attitudes, and interest in the project.
A proven technique commonly used to identify stakeholders is stakeholder mapping which groups stakeholders together into categories. Project managers use this data representation technique to analyze and plan how to build relationships with stakeholders. In addition, stakeholder mapping helps the project manager prioritize their efforts to engage with stakeholders.
How to Conduct a stakeholder analysis:
identify all stakeholders
prioritize stakeholders
understand stakeholders
To identify stakeholders, a project manager will brainstorm who his stakeholders are. Then he will prioritize stakeholders by mapping them out and classifying them according to their power and interest in the project. A power/interest grid is a popular technique used in stakeholder analysis to understand the value stakeholders expect to get from the project
Adapted from Mendelow, A.L. (1981). 'Environmental Scanning - The Impact of the Stakeholder Concept,' ICIS 1981 Proceedings, 20.
The power/interest grid is one of the best techniques to handle what information is communicated to whom on a project. The results of using a power/interest grid are that a project manager will learn how to deal with each stakeholder based on their power and interest in the project.
To decipher the power/interest grid image above:
high power, highly interested people include roles such as the sponsor. These stakeholders must be fully engaged, and so a project manager should make the most significant efforts to satisfy them, aka "manage closely"
high power, less interested people include roles such as the functional manager. A project manager will put enough work in with these stakeholders to keep them satisfied, but not too much that they become bored, aka "keep satisfied"
low power, highly interested people include such roles as support functions such are HR and Finance. A project manager will need to adequately inform these stakeholders and talk to them to ensure no significant issues arise. These stakeholders are often helpful with the details of the project, aka "keep informed"
low power, less interested people include such roles as subject matter experts (SMEs). These stakeholders must be monitored, but a project manager should not bore them with too much communication, aka "monitor"
Lastly, a project manager needs to discover how his key stakeholders feel about the project. Then, he needs to figure out the best method to engage them and the best way to communicate. A project manager can ask stakeholders the following questions to clarify their communication needs:
what interest do they have in the outcome of the project?
what motivates them the most?
what information do they want from the project manager?
what's the best communication method for them?
what's their current opinion of the project manager's work?
who influences their general opinions?
what can a project manager do to win their support if they do not initially have a favorable view of him?
if they cannot be won over, what will the project manager do to address their opposition?
These kinds of questions work well since most people are open about their views. A project manager can ask his stakeholders these questions directly. Asking for their opinions is often the initial step in building successful relationships with them.
Stakeholder analysis is best completed before project initiation, although it is helpful to re-examine critical issues throughout the project. The time invested in doing a stakeholder analysis should vary depending on the project's type and complexity.
References:
Smith, L. W. (2000). Stakeholder analysis a pivotal practice of successful projects [web log]. https://www.pmi.org/learning/library/stakeholder-analysis-pivotal-practice-projects-8905.
2017. A guide to the project management body of knowledge. 6th ed. Newtown Square, Pennsylvania, USA: Project Management Institute, pp.10-28.
Rita Mulcahy's CAPM Exam Prep: Rita's Course in a Book for Passing the Certified Associate in Project Management (CAPM) Exam, by Rita Mulcahy and Rita Mulcahy, RMC Publications, 2018.
