Managing Your Stakeholders and Keeping Them Engaged

12 May 2020

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At every phase of a project, from its initiation to its close, stakeholders have a major impact. They can undermine a project, influence its schedule, wreak havoc with budget, expand scope, and take focus away from deliverables. Therefore, it’s crucial for a project manager to identify and list all potential stakeholders of the project in order to mitigate the project’s risks. And once you know who they are – you need to keep them engaged.

The Importance of Stakeholder Management

Two leading causes of project failure are the insufficient involvement of stakeholders and infrequent communication with sponsors and other key stakeholders.

Stakeholder management is the process of identifying key stakeholders, gaining an understanding of their needs and concerns, and establishing a process of managing to their expectations, throughout the life of the project or program.

By prioritizing our focus on stakeholder management practices we project managers can improve the chances of our project achieving it’s objectives.

On that note, lets introduce you to your stakeholders.

Stakeholders - An Introduction

Stakeholders – whether people or organizations – are the participants with a vested interest in the project and who stand to gain or lose something as a result of the project.

They may include:

The project core team;
The project sponsors;
The company’s executives;
The project end users and their functional managers;
Customers and clients;
Investors and shareholders;
Vendors; and
Competitors.

In larger scale projects, you can add to that list with entities like: government agencies, governmental regulatory bodies, national communities and professional associations, industry trade groups, labor unions, your local government and the public at large.

That is a lot of stakeholders.

It therefore makes sense to group these stakeholders or “interested parties” into a few broad categories, allowing you to better handle their interests and needs.

Three common stakeholder groups include:

Primary stakeholders –
These are the project beneficiaries.
Secondary stakeholders –
This group comprises people who participate in the project because they have a stake or interest in it or its deliverables or because they contribute to it.
Other stakeholders (those external bodies, for example) –
These are people or groups not formally involved in the project, but that can be affected by it or that can have an impact on its outcome.

But, not all stakeholders have the same level of interest or want the same return on investment. So it is really important to understand what each of these stakeholders expects from the project so that you may manage to that.

Enter stakeholder identification and analysis – the first step in a four-staged approach to stakeholder management.

Stakeholder Management Approach

Step One: Identify and Assess Your Stakeholders

Your first task is to identify and list all the potential stakeholders for a project in a stakeholder register or stakeholder log. This register includes information about the stakeholder’s interests, involvement, expectations, importance, influence, and impact on the project’s execution, as well as any specific communications requirements.

In order to complete the stakeholder log you will likely need to interview your stakeholder. We recommend investing time early on in the project to understand your stakeholders needs.

Investing time to understand your stakeholders needs, assess their impact to the project, and their priorities, leads to creating real value together in a shorter time frame.

Some use a “Stakeholders Expectation Questionnaire,” an interview style template that lets you capture detailed information about stakeholder objectives, measures that matter and the impact and involvement level of the stakeholder.

Did you know that Project Management templates are available for download on ProjectManagement.com? See link for a Stakeholder Register Template.

Stakeholder Analysis Matrix

With our information collected, its now time to categorize and group our stakeholders.

We typically categorize stakeholders in three ways:

By their level of power and influence;
By their function and impact on the project; and
By their role in the organization.

This allows you to clearly identify your stakeholders that you need to “Manage Closely” and prioritize your interactions with them.

However, don’t focus all your effort, time and attention on them. You may also want to identify additional maps outside the traditional power influence grid, showcasing support or satisfaction levels.

For example, a support index identifies the level of support the project can expect from the stakeholder.
A satisfaction index reports on how well the project meets respective stakeholder expectations and requirements.
A power index examines level of authority or influence possessed by the stakeholder for making decisions or allocating budget.

This analysis isn’t simply something that gets created and filed away as some kind of project artifact. It can actually help drive further action for maximizing project results.

Step Two: Develop a Communication Plan

The second stage in managing stakeholder expectations is to develop a plan for conducting project communications based on stakeholder interest.

This involves planning for communicating regularly on project status and results based on what matters to the stakeholders and where you are at in the project. See a Communications Schedule below.

For example, functional managers may wish to receive a weekly status communication with information related to their employees who are all members of the core project team. Project sponsors and other key stakeholders on the other hand, may only want a monthly status of the project – summarizing milestones on the schedule, the budget and earned value.

It’s important for the project team to log feedback received and discussions generated in their Communications Plan in order to improve future responses and to anticipate further potential risks.

Learn more about adjusting your communications to stakeholders in our Podcast: Building Relationships

Step Three: Manage Stakeholder Engagement

Development of a stakeholder management plan is a part of project management that’s often neglected by organizations. Yet, it’s a crucial process that can make or break projects.

In this third stage, the project team needs to monitor stakeholder engagement; adjusting the stakeholder plan execution as necessary to meet the project’s objectives.

The result will allow the project team to:

Communicate key success factors to the project sponsor;
Develop a mitigation plan to reinforce buy-in by stakeholders who may not be supportive of the project; and
Recruit new, interested stakeholders.

By monitoring community perception, the project team will better understand needs and wants. Reaching out to stakeholders establishes open communication channels among the teams and stakeholders and helps build trust. And, you may be able to increase the visibility of the project to a new business group you hadn’t initially identified as potential stakeholders.

Step Four: Review Stakeholder Communication Effectiveness

This final process step aims to understand the effectiveness of stakeholder engagement and communication, as well the overall status of stakeholders. This includes their awareness of, involvement in and attitude towards the project and occurs throughout project delivery.

While this is stated as your final step, it actually occurs routinely throughout project delivery. Essentially this is the tracking of your stakeholder KPIs.

A number of methods can be employed for gaining feedback depending on the communications and the stakeholders. These could include interactive communications (e.g. meetings) as well as feedback forms, questionnaires and targeted surveys.

Some examples include:

Stakeholder Feedback –
These are the percentage of stakeholders with positive feedback on the project – remember your stakeholder satisfaction index?
Communications Delivery –
This could be the percentage of communications issued to agreed timescales (rolling last 6 months).
Risks / Issues –
And finally, the number of risks / issues relating to stakeholder management.

The types of key performance indicators you could track varies widely. Yet the gathering and reviewing of these will help determine whether the objectives have been achieved or further action is required.

And that really is the hold point of stakeholder management – maintaining a focus on our stakeholders to improve the chances of our project achieving it’s objectives.

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Shaaron Alvares contributed to this article originally published on pcubed.com. It has been updated to reflect current Stakeholder Management practices.

Managing Your Stakeholders and Keeping Them Engaged

Table of Contents

The Importance of Stakeholder Management

Stakeholders - An Introduction

Stakeholder Management Approach

Step One: Identify and Assess Your Stakeholders

Stakeholder Analysis Matrix

Step Two: Develop a Communication Plan

Step Three: Manage Stakeholder Engagement

Step Four: Review Stakeholder Communication Effectiveness

Project Management Delivery

Improve Your Chances of Project Success with Early Mobilisation

Megaprojects: Big Decisions

Improving delivery capability with P3M3

Project Health Checks: Repairing in Motion

Project Resource Management: 5 Steps to Optimize Shared Resources

Post-Implementation Review Best Practices

What are Project Controls

Evolution of Decisions

What is a Project Controls Manager

Keys to a Successful Project Setup

Keys to a Successful Project Setup

What is a Project Controls Manager

Improving delivery capability with P3M3