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Effective Stakeholder Management

In an earlier article I had discussed on the importance of stakeholder management in projects. Here I have tried to shed some light on how this needs to be performed. Stakeholder management would comprise of the following steps

  1. Identification of Stakeholders

  2. Prioritization of Stakeholders – through Stakeholder analysis

  3. Stakeholder need analysis and Strategy formulation

  4. Plan stakeholder engagement - Defining mode of engagement, Identifying key messages to be passed on and setting up appropriate communication channels

  5. Manage Stakeholders

  6. Measuring overall effectiveness of stakeholder engagement

1) Identify Stakeholders

The very first step is to identify who they are. Stakeholders could be within or outside of the organization, they maybe at different levels within the organization and could offer support or resistance to the project. The starting point could be to identify primary stakeholders; this can be done by referring to initial documents like charter, procurement documents or even consultation with project sponsor. Next, these primary stakeholders could be interviewed and the list can be extended to come up with a comprehensive list of stakeholders in the project.

While trying to identify stakeholders, consideration should be given to understand

  • All those who have an influence on the project

  • All those being impacted by the project

  • All those involved in the project

Techniques like brainstorming and stakeholder identification workshops are usually employed for stakeholder identification.

Stakeholders could be individuals, groups or organizations. These could be documented in a stakeholder register. It may be appropriate to classify them as Positive/Negative/Neutral and as Internal/External

2) Prioritize

Not every stakeholder can influence the project the same way nor every stakeholder is equally interested in the project. For instance, the top management has greater influence on the project as compared to the ‘Manager Operations’. Thus, Project manager needs to prioritize its effort in managing stakeholders accordingly to best utilize time available.

For each identified stakeholder the level of influence, interest and impact need to be analyzed. A Power-Interest grid is commonly used to map the stakeholders like one shown below.

*The above mapping is based on assumptions of ‘power’ and ‘interest’ in a specific to context, which is not discussed here

  • Lower Left Quadrant – these with low power and low interest would demand least effort to be managed. PM can simply watch/monitor them and intervene as required

  • Lower Right Quadrant – these with high power and low interest need to be kept satisfied throughout the project. PM may choose to comply with their instructions. For instance, PM cannot afford to annoy the COO by not complying with any direction (or expectation) passed on.

  • Upper Left Quadrant – these with low power and high interest need to be kept informed. Because of their high level of interest they would like to know what’s happening currently, which way is the project heading, what are our plans etc. Notifying them of these should keep them happy.

  • Upper Right Quadrant – these with high power and high interest are the most important stakeholders in the project and would require maximum attention. PM needs to engage with them very closely by proactively engaging with them and drawing up appropriate strategies.

From the above analysis we draw the conclusion that the CIO/CEO/CFO are the most important stakeholders in the project and require maximum attention.

3) Stakeholder need analysis and Strategy formulation

This is about developing strategies to gain support or reduce obstacles. By engaging the right people in the right way we can make a big difference to project success.

Here is a sample Stakeholder register (based on PMBOK Guide 6th Ed.) that could be used to document the needs and expectations of stakeholders. Initial strategies on how to address the identified needs of the stakeholders should also be discussed and documented at this time.

4) Plan Stakeholder Engagement

This involves identifying current engagement level of various stakeholders and comparing them with desired engagement levels. A possible scale to define Engagement Level is given below (source PMBOK Guide 6th Ed.)

  • Unaware – not aware of the project and its impact

  • Resistant – is aware of project and its consequences and is resisting the project

  • Neutral –aware of project and its consequences but is neither supportive nor resistant

  • Supportive –is aware of project and its consequences and is supportive, contributing as desired

  • Leading - is aware of project and its consequences and is exhibiting leadership by actions such as solving problems, creating novel solutions, setting directions etc.

It is very likely that the engagement level of stakeholders could vary from phase to phase. For example, senior management may need to assume a leading role at the beginning of the project to reduce obstacles from those resisting the project and generate interest among all members while, the engagement level may drop to supportive once the initial course of the project is set.

A stakeholder Engagement Assessment Matrix (as shown below) can be used to display the current vs. planned engagement levels of stakeholders for a particular phase in the project. Through this any gaps in the current and desired levels of engagement can be identified and appropriate engagement modes defined to boost their engagement levels

C – Denotes current engagement level

D – Denotes desired engagement level

The above matrix suggests that

  • The level of engagement of CEO is as desired. We just have to maintain that.

  • CIO needs to be had in a Leading role

  • COO who is resisting the project need to be educated on the benefits of the project to gain support

  • Need to communicate with the CFO who is currently unaware to gain his buy in and have him support the project

Having identified gaps in planned and actual engagement levels of stakeholders, Project Manager needs to plan appropriate modes of engagement to boost the current engagement levels of stakeholders. There is a need to engage with everyone, but the frequency, channel and format would vary from stakeholder to stakeholder. Some examples of modes of engagement would be:

  • Quarterly Management Reviews to engage with senior management

  • Open houses to engage with the local community

  • Use website to engage with general public

This information may be documented in a Stakeholder Management Plan.

6) Manage Stakeholder Engagement

This step is about communicating and working with stakeholders to meet their needs and expectations, address issues, and foster appropriate stakeholder involvement. This is performed by the Project manager all through the project and helps increase support and minimize resistance from stakeholders.

Strategies formulated in step3 and engagement modes planned inn step4 get implemented here.

7) Measuring effectiveness

One way to measure how effective stakeholder engagement has been is to monitor the Stakeholder engagement assessment matrix (above). That is, if the gaps between current and desired levels of engagement are narrowed it indicates that stakeholder engagement has been effective, while the ideal scenario is where they happen to coincide.

Other measures of stakeholder management effectiveness are

  • Increased participation of stakeholders, say in project steering committee meetings

  • Conversion of stakeholders from negative to neutral/positive

  • Open issues showing a decreasing trend

Project manager needs to adjust strategies and engagement modes as corrective measures in case stakeholder engagement hasn’t been effective.

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