Can You Afford Not to Manage Your Project’s Stakeholders?

Stakeholder management is a critical component for the successful delivery of any project. A stakeholder could be any individual, group or organization that can affect, be affected by, or perceive itself to be affected by a project. Effective Stakeholder Management creates positive relationships with stakeholders through the appropriate management of their expectations and agreed objectives.

To achieve this, the project management team needs to ensure that stakeholders are effectively involved in project decisions and execution throughout the lifecycle of the project, to gain support for the project and anticipate resistance, conflict, or competing objectives among the project’s stakeholders. This will require the team perform the following processes:

Identify Stakeholders – identify by name and title the people, groups, and organizations that have significant influence on project direction and its success or who are significantly impacted by the project.

Plan Stakeholder Management – identify and develop appropriate strategies and tactics for effectively engaging stakeholders in a manner appropriate to the stakeholders’ interest and involvement in the project.

Manage Stakeholder Engagement – outlines the process of communicating and working with stakeholders to meet their needs and expectations, and to address issues as they occur.

Monitor and Control Stakeholder Engagement – describes the methods that will be used to monitor and control stakeholder engagement and alert the project team if problems are surfacing.

Project Management Information Systems (PMIS) like PMWeb will enable the organization to formalize the different processes needed to manage the project’s stakeholders across the complete portfolio of projects. The knowledge that will become available from the information captured from the stakeholders’ data will provide the organization with the insight to make better and faster informed decisions when it comes to managing stakeholders.

Identify Stakeholders

In order to manage stakeholders, the project team first needs to clearly identify and assess all potential stakeholders. The PMWeb company directory module will be used to maintain a single stakeholder repository where the details of all potential stakeholders that the organization could be interacting with on their current projects, past projects and planned projects.

Some questions that are relevant for deciding who should be considered a stakeholder for the project or not include:

1.      Will the person or their organization be directly or indirectly affected by this project?

2.      Does the person or their organization hold a position from which they can influence the project?

3.      Does the person have an impact on the project’s resources (material, personnel, funding)?

4.      Does the person or their organization have any special skills or capabilities the project will require?

5.      Does the person potentially benefit from the project or are they in a position to resist this change?

6.      At what point does the person have the greatest impact on the project?

Plan Stakeholder Management

For each identified stakeholder, a stakeholder analysis will be carried out for which the relevant information (interests, involvement, interdependencies, influence, and potential impact on project success) are gathered, documented and analyzed. The Stakeholder Analysis Matrix document template will be used to list the stakeholders that could influence or impact a project. The document template which is created in PMWeb using the custom form builder details current level of influence and impact of each stakeholder and the desired level of influence and impact of the stakeholder. Each will be scored on a scale of 5 where for influence 1 is for low influence while 5 is high influence. On the other hand, a score for 1 for impact means negative impact while 5 is positive impact.

In addition, the form will detail what is important to the stakeholder, how could the stakeholder contribute to the project, how could the stakeholder block the project, strategy for engaging the stakeholder and which company and team member will be responsible for managing this stakeholder. This document template will be updated when new stakeholders get identified or when the captured details get updated.

The data captured in the Stakeholder Analysis Matrix document template will be used to create the Stakeholder Assessment Matrix report where it will display the current stakeholder level of interest in the project and the desired level of interest in the project. The matrix will have four quadrants, Detractors (low influence and negative impact) which is colored in Green, Blockers (high influence and negative impact) colored in Amber, Supporters (low influence and positive impact) colored in Yellow and Champions (high influence and positive impact) which is colored in Red. The matrix will display each stakeholder as a bubble where the size of the bubble details the interest level (by multiplying influence level with impact level). The Y-Axis will be level of influence while X-Axis will be level of impact.

Manage Stakeholder Engagement

Stakeholder Engagement Management is the process of communicating and working with stakeholders to meet their needs and expectations, and to address issues as they occur. Stakeholder Engagement Management is the process to systematically foster appropriate stakeholder engagement in project activities throughout the life of the project. The key benefit of this process is that it allows the Project Manager to increase support and minimize resistance from stakeholders, significantly increasing the chances to achieve project success.

To effectively manage stakeholder engagement, the Project Manager will utilize the Communication Matrix and strategies identified above to communicate project related information to key stakeholders in a proactive and timely manner. Leveraging the information provided in the Communication Matrix, the project will have the ability to increase support and minimize stakeholder resistance throughout the life of the project. Managing stakeholder engagement helps to increase the probability of project success by ensuring that stakeholders clearly understand the project goals, objectives, benefits, and risks.

PMWeb enables the project team to create the different reports and dashboards listed in the communicate matrix that are needed to be shared with the project stakeholders. The information communicated in those reports and dashboards are based on the data captured from the different project management processes that PMWeb was used to automate. An example of the tabular report that could be required by stakeholders is a log of all project issues that might impact the successful delivery of the project. Of course, similar to the projects issues report, other reports can be generated to address other specific project information such as deliverables log, change orders register, safety incidents among many others.

The information captured from the different project management processes will also become the basis for calculating the Key Performance Indicators (KPIs) to report on the projects’ critical success factors. Traditionally, projects’ KPIs will report on projects’ schedule, cost, quality and safety performance. Nevertheless, there are emerging projects’ KPIs that will report on risk, disputes, sustainability, stakeholder satisfaction among others. Those KPIs are usually grouped into a single page dashboard to provide the stakeholder with a single version of the truth of what is being reported. For example, a stakeholder who is interested in the project’s financial status might require a dashboard that has details on the approved project budget, budget adjustments, awarded contracts, approved, pending and disputed change orders, progress invoices for approved work in place and other related financial data. The same applies for other stakeholders that might need details on the project schedule, risk and issues, quality, safety among others.

On the other hands, there are other stakeholders who might be interested in having a dashboard that provides a single version of the truth about the overall project’s performance. This could include financial, schedule, risk, issues, quality, safety among others. Sometimes there could be more than one project dashboard layout depending on the stakeholder requirements.

In addition, there could be stakeholders who are interested in having a single version of the truth for the complete projects portfolio executed by the organization or maybe projects that are part of specific program or strategic initiative. Again, the layout of this enterprise dashboard can be designed in any form and format.

Monitor and Control Stakeholder Engagement

Monitor and control Stakeholder Engagement is the process of monitoring overall project stakeholder relationships and adjusting strategies and plans for engaging stakeholders. The project team needs to continue to be actively listening and soliciting input and feedback from stakeholders to make sure communications are being effective, well received and understood, and also to capture important information to help make adjustments to ensure communications needs are met and to respond to problem areas.

The project management team should take all necessary measures to reduce the likelihood of having the Stakeholder Expectation Gap. A risk that is caused when the stakeholder expected value of what the project will deliver exceeds the value that the project will actually deliver. Successful stakeholder engagement will drastically reduce the likelihood of this risk and on the contrary will increase the chances of having satisfied stakeholders.

The project team needs to keep updating the stakeholder directory, stakeholder analysis matrix and project communication matrix to reflect all updates and changes to those documents. This could also require developing new communication reports and dashboards to meet the growing requirements of the projects stakeholders.

In addition, the project team needs to watch for stakeholders who avoids direct contact, being defensive, raising their tone of voice or giving a vague response. The project team needs to document such incidents using PMWeb Action Management module. For each noticed unfavorable reaction or response, the project team who issued the action request will state the needed action, who will be involved in taking the needed actions to rectify this issue and by when and link the action to the relevant documents and records that relate to this unfavorable reaction or response.

The project team member can also invite other project team members to the issued action document to provide their input on how it will best to address this unfavorable reaction or response. Those could be different than those who were assigned with specific actions to rectify the issue.

The Action Management Report will be maintained by the project team to monitor and control the stakeholder engagement and management and to ensure that there are no pending actions that could negatively impact the relation with the different project stakeholders. The layout, format and performance indicators can be adjusted the reflect the organization’s own reporting needs.