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The Definitive Guide to Stakeholders in Project Management

 MS MS

Published: 17th September 2021

Part of the role of project manager involves communicating with a wide range of individuals for the duration of the project. These individuals could include new members of the team to more experienced team members. It could also include people from suppliers to stakeholders. In this guide to stakeholders we look at why it is necessary to satisfy the different requirements that each of these different groups of people will have, as well as making sure that they understand exactly what is going on with the project.

This can be a challenge. However, of all of these groups the one that may cause the most challenges and that can be the hardest to communicate effectively with is your stakeholders.

Our definitive guide to stakeholders in project management will identify who they are, what stakeholder relationships entail and how a project manager should aim to perfect these relationships. Whether you are a project manager who has just got your PM accreditation or someone who has been working as a project manager for a while there are always things that you can do to help smooth these relationships along.

meeting stakeholders for the first time

What is a stakeholder?

It is important to remember that all projects are collaborative efforts. While a project manager may be the person who is seen to be in charge of the project if the project itself is to be a success, they will need people to work on the project and they will also need to report back to other individuals on the progress of the project.

The other people who are involved in the project, be they the client, the leadership within the company you work for or indeed the other members of the team are all in fact stakeholders in the project. That is to say that they have a stake in the project itself, albeit different from one individual to the next.

Throughout this guide, we’ve been talking a lot about the various people involved in taking a project from idea to execution: your team, other departments within the organisation, leadership, clients, and more.

The official definition of a project stakeholder, according to the Project Management Institute, is:

“Those 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.”

These are the people who have something to lose, or gain, from the outcome of the project. They are a varied range of individuals and their interests in the project are not all the same although they are all hoping for the same outcome – a successful project that when completed does what was asked of it. Sometimes your stakeholders may also have conflicting interests in the project, and this is something you will need to learn how to balance.

It is also entirely possible that at some point during the project, particularly in the case of a lengthier project, your list of stakeholders may change. This can result in the influence that some of the stakeholders have also changing.

Guide to Stakeholders: What is a project managers responsibility?

As a project manager, one of your chief responsibilities is to ensure that stakeholders are kept informed about the project. They must be involved where necessary, and feel like they are being kept on board where necessary. The happiness of your stakeholders is one of the key considerations to completing a project that is successful. It is therefore of vital important that you ensure you are doing the right things at the right times where stakeholders are involved.

Managing complex relationships with stakeholders is one of the key project management skills that any project manager will need. However, this is often easier said than done.

communicating with stakeholders on a project

Who are the stakeholders in any project?

Now that we know what a stakeholder is and what the project manager’s responsibility towards them is. It is necessary to identify the stakeholders in any particular project.

The list of stakeholders may be longer than you think, but you can split your stakeholders into two very distinct groups. These are internal and external stakeholders.

  • Internal stakeholders – These are stakeholders who are found within the company that the project manager works for. They can include members of the team, executives and managers.
  • External stakeholders – As you might surmise, external stakeholders are groups or individuals who are outside of the company. These include investors, supplies, customers and users.

One thing to point out is that Stakeholders do not always work for the manager of the project. This can add another layer of complexity to the work that is involved. The project manager is required to communicate with a range of people who range in terms of seniority and also have different degrees of influence, engagement and even interest in the project.

Examples of Stakeholders

Examples of stakeholders in a project include:

  • Project manager
  • Members of the team
  • Managers
  • Executives or senior management
  • Company owners
  • Investors
  • Sponsors
  • Financiers
  • Suppliers or vendors
  • Customers
  • End users

As a project manager it is important to identify which stakeholders you need to focus on to help the project. This can be done by carrying out a stakeholder analysis.

How is a stakeholder analysis completed?

Once the charter for your project is complete and the scope has been defined for the project, the project manager will be able to start identifying the stakeholders.

Every guide to stakeholders analysis will tell you that the first step in identifying your stakeholders is to take a look at all of the project documentation, including your project plan. This will help you to complete the list of stakeholders. You can separate them into internal and external.

Some of these stakeholders will be involved in the project from the very start. However, others may not become involved until later. Knowing who they are in advance can be very useful. You will be able to build up your relationship with them and also help them to feel like they are involved, which should make for a great stakeholder relationship.

Once you have identified all of your stakeholders you will need to begin to prioritise them. This is an important step because it will help you to understand where you will need to invest the majority of your resources. You need to know who the key decision makers are at any particular time in the lifecycle of the project. That way, you know you are talking to the right stakeholder at the right time.

The simplest way to look at stakeholder prioritisation is to use a grid for power/interest (you may prefer to use power/influence or impact/influence).

Using a grid will allow you to answer two very important questions to identify your key stakeholders. This means you can group them into a total of four different categories.

project stakeholder analysis using a Kanban board

Consider the following:

What level of power do they hold?

  • How important is it that they are happy with the results and progress of the project?
  • How important are they to the success of the project?
  • What is their influence on other stakeholder, the project and the team – this might be negative or positive influence

What is their level of interest?

  • Is the project very important to them or are they only loosely connected with it?
  • Are they directly accountable for the project?
  • Are they relying on the project for other results or work?
  • Do they have any concerns about the project, or do they have any opposition to the project?

Those stakeholders who fall in to the interested and powerful category are those who a project manager needs to pay closest attention to. This is because they are the individuals who can have the most influence over the project – be this good or bad influence.

Guide to Stakeholders: Understanding the Stakeholders

Once you have fully identified exactly who your most important stakeholders are then you will know exactly who you need to prioritise. It is also important to understand exactly what expectation they might have from the project.

The best way to do this, and particularly in respect of key stakeholders could be to meet up in a face-to-face situation so you can discuss the project properly. You will need to know a number of things including what they feel would be success in the project. You can also focus on any concerns or worries that they might have about the project, what they want from the project, and what the impact of a negative, or positive, outcome for the project would have on them. It is also helpful to find out if there are any potential conflicts of interest that might possibly arise between them and the other stakeholders.

The main reason to hold these conversations is to help you to understand exactly what each stakeholder wants from the project. Having the conversations face to face will allow you to get a better idea of the emotions that each stakeholder has in respect of the project. It will also help you to create a better idea of how your network of stakeholders are linked.

It will also help you to put those project management skills to use and get a good sense of what each stakeholder is about. You can also finid out what their communication style is. Some stakeholders will undoubtedly prefer to be kept in the loop all of the time whilst others will prefer a quick update when there are developments. Some of them will prefer to speak to the project manager whilst others will be too busy and will prefer an email update that they can look at when they have some free time. Don’t forget to look out for any little cues that will also let you know how each stakeholder ticks.

Guide to Stakeholders: Managing Project Stakeholders

Unfortunately, identifying your stakeholders and working out their needs is just one part of the puzzle. If you want your project to be successful then you will need to pay attention to the requirements that your stakeholders have laid out. Their objectives and happiness should be a consideration as the project progresses.

Your stakeholder isn’t always correct, however. As a project manager it will fall to you to sometimes need to advise stakeholders when they have expectations of the project that are unrealistic. These might be in relation to timescales or even the budget. It can often require you to remind them of the project plan that was originally agreed on at the beginning of the project.

To some extent the project work will be the easy part. However, balancing the needs and requirements of the stakeholders is where can be tricker. This is especially true when it means ensuring that the project that you have agreed on is delivered as it should be.

There are some things you can do to help with this.

Document the needs and role of each stakeholder

An important part of any guide to stakeholders is documenting the information that you have gained about them. This will ensure that you remember everything that you need to know. Putting the information into a list will also help you to keep track of everyone and will ensure that you are pushing the project in the right direction. It will ensure that each stakeholder is being kept updated in the way that works for them and when they need.

Communicate with your stakeholders

Communication really is the key to running a successful project, and this means ensuring that your stakeholders are always keep up to date on every stage of the project. It will be one of the most important parts of the project manager role in the project and should an unforeseen issue occur, that may mean needing to increase the budget or lengthen the timescale will really help should you need to discuss it with the stakeholders. They are more likely to look favourably on a project manager who has been communicating with them on a regular basis.

It is important to remember that over communicating is just as bad as not communicating with your stakeholders and they will probably not look favourably on either of these approaches.

A good way to keep track of everything and ensure that all of your communication, whether this is with your stakeholders, or the members of your team is to use a project management tool that will allow you to store all of your communications in one easy to access location.

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