A successful project is a two-way street between the project team and the stakeholders.
The needs and expectations of the stakeholders directly impact the development of the project’s scope, and since communication is effective only when the right information is provided to the people who need or expect it in a manner they can understand, we have to begin discovering the stakeholders and learning about them immediately after the project is chartered.
The best place for initially finding stakeholders is through the project charter, contracts, request for proposals, and statements of work. Stakeholders can also be found by looking at the organizational chart and informal reporting structure and relationships within the organization.
Stakeholders can also come from outside the organization, including customers, suppliers, vendors, investors, industry groups, labor organizations
As we look for stakeholders, we need to keep in mind that not everyone will perceive our project as being beneficial.
Whether their opposition comes from real or imaginary factors, we can’t ignore these negative stakeholders.
We need to identify them, discover the root cause of their opposition, and develop strategies for addressing their issues or mitigating the risks their opposition can create.
The causes of stakeholder opposition are often rooted in:
- The project’s objectives the methods the project will use to achieve its objectives.
- The direct or indirect changes or transformations the project’s objectives will generate.
- The financial or human resource needs of the project.
- The people have chosen (or not chosen) for the project or their roles.
- The vendors or suppliers are chosen (or not chosen) for the project.
Identify Stakeholders Process Decomposition
Identify Stakeholders Process: Inputs
- Project charter
The project charter formally authorizes the project and the project manager.
It also provides the business case, objectives, and success criteria of the project. Charters directly or indirectly identify key stakeholders.
- Procurement documents
If the project is using outside resources or purchasing goods, material, or services then the collection of procurement documents, like contracts, identify additional project stakeholders.
- Enterprise environmental factors
The organizational structure, hierarchy, and formal and informal reporting relationships indicate project stakeholders.
- Organizational process assets
Project plans, stakeholder registers, and lessons learned from other projects can help identify stakeholders.
Identify Stakeholders Process: Tools and Techniques
- Stakeholder analysis
Stakeholder analysis uses a variety of techniques to qualitatively and quantitatively identify the interest, expectations, influences, and needs of stakeholders.
- Expert judgment
Expert judgment is used to assess the interests, influences, and power of stakeholders.
Identify Stakeholders Process: Outputs
- Stakeholder register
The stakeholder register identifies all project stakeholders and contains attributes such as the person's name, title, position, project interest, expectations, and influence.
- Stakeholder management strategy
This document describes the approach that will be taken to maintain or increase the support of stakeholders in the project or to mitigate the risks or remove the obstacles that negative stakeholders can cause.
Stakeholder analysis investigates the interests, expectations, and influences of the project’s stakeholders.
Stakeholder analysis useful for three main reasons:
- In order to be successful, the project must satisfy the needs of the key stakeholders, so we have to know who these people are so that they can be included in project planning activities.
- Both supportive and negative stakeholders generate risk factors in the project. We have to understand all stakeholders to effectively gauge what levels of risk could be generated by their activities.
- It’s likely that the stakeholder population will be quite large.
That makes it impossible for every stakeholder to be actively included in project planning, and it makes it difficult for the project manager to determine which stakeholders are crucial to the project’s success and should, therefore, receive the most of his or her time. Stakeholder analysis helps us determine on whom our time and effort are best spent.
To perform stakeholder analysis, we'll need to:
- Make sure we’ve identified every person, group, or entity affected by the project.
- Assess each stakeholder's interests in the project.
- Know the influence each stakeholder holds.
- Develop proactive strategies for dealing with stakeholders.
- What level of involvement should the stakeholder have in the project, and how much effort should the project manager, plan for managing the stakeholders?
Grids are a tool to plot a stakeholder’s position along two axes that each represents a separate key factor.
The two axes split the grid into four quadrants, and where the plotted point falls gives us an indication of what level of participation the stakeholder needs and how much effort the project manager will want to expand on meeting the stakeholder’s expectations.
In the upper-right quadrant are stakeholders who need actively engaged in the project, usually in a partnership or collaborative relationship.
In the upper-left quadrant are stakeholders who need occasional engagement with the project and project manager.
The project manager needs to keep an open and regular dialogue with the stakeholders in the lower-right quadrant.
And those in the lower-left quadrant need to receive occasional follow-up and information about the project, but the project manager doesn’t want to overwhelm them with communication.
The levels of interest, power, or influence for stakeholders in a project are not always static, so a project manager wants to monitor all stakeholders for a change that moves them into another quadrant requiring a different management strategy.
Commonly used grids are Power/Interest, Power/Influence, and Influence/Impact.
Salience refers to the level of power, legitimacy, and urgency stakeholders have in the project.
Power: This is a subjective determination of how much influence the stakeholder has to impose his or her will.
For example, a chief executive in the company usually has a very high level of power even if he or she isn’t directly involved in the project.
Legitimacy: This is a gauge of how much-vested interest the stakeholder has, giving the stakeholder a legitimate stake in the project.
For example, a marketing manager probably has no legitimacy in a project for the accounting department.
Urgency: This is an assessment of how quickly the stakeholder will expect his or her will to be acted upon.
Stakeholder Management Strategy
The project manager is responsible for ensuring that the needs and expectations of the stakeholders are identified and met while also mitigating the potential obstacles that negative stakeholders might raise.
These efforts are described in the stakeholder management strategy, which is a proactive plan covering both generalized and targeted strategies for keeping positive stakeholders satisfied and mitigating the risks posed by negative stakeholders.
Developing a strategy can be approached as simple as asking ourselves these questions about each stakeholder:
- How will positive stakeholders be kept satisfied?
- How could we reduce or eliminate the opposition from negative stakeholders?
- How can we mitigate the risks negative stakeholders may generate?
- What's the role of others (outside the project) in managing stakeholders?
- What types of communications, forums, and face-to-face opportunities will work best for the various types of information and issues that will need to be addressed?
The stakeholder management strategy will be executed during the Manage Stakeholder Expectations process.
These efforts can take a significant amount of the project manager’s time, but if they aren’t done well, the project can experience significant problems.
Many a project manager has been caught off guard by unseen “political” issues raised by an unhappy stakeholder even though the project appears to otherwise be running smoothly.