Importance of Stakeholder Management

Defining Project Success

There are several definitions of project success ranging from primitive definitions of delivering agreed scope on time and within budget to others as customer satisfaction, producing products fit for use, meeting requirements, meeting objectives and more. A relatively new definition is ‘Stakeholder Satisfaction’.

Let’s say the Project Manager completed the project on time, within budget, delivering the agreed scope, the product (s) confirmed to specifications and were fit for use and even satisfied the customer. Can we consider it successful? Maybe yes, going by most definitions of project success.

But say, as part of managing this project the project manager

• Burnt-out the team affecting their morale such that some of them quit the organization as a result

• The compliance team complains of non-adherence to QMS standards and documentation requirements

In my view ‘satisfying stakeholders’ is a more profound definition of project success. I believe this definition encapsulates most other definitions of success. Like, in the above case project team members and the compliance team were not satisfied who are also stakeholders of this project. Therefore, in addition to the common notion of project success, stakeholder needs are to be carefully examined and satisfied.

“Stakeholders are individuals, groups or organizations who may affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of a project” – Source PMBOK Guide

The project management community is realizing the importance of stakeholders and stakeholder management is gaining increasing popularity within project management. Symbolic of this is PMI’s adoption; in the last couple of revisions of PMBOK this was consistently addressed, while the fifth edition has been overly aggressive about this to have rendered ‘Stakeholder Management’ the status of a separate knowledge area – well deserved in my opinion.

I may sound to have oversimplified definition of project success as ‘stakeholder satisfaction’ but this is no easy task. Satisfying them is a later challenge, the former one is identifying who they are and what do they want? I think this is most important. If this is not done well, an overall success cannot be achieved.

Things to consider about stakeholders

1. They could be classified as positive, negative and neutral

2. They could be internal or external to the organization. Like Customer, vendors, partners, government agencies, environmental groups, associations etc. are external

3. They vary greatly in terms of the level of influence and their interest in the project.

4. Usually their needs are very unique to the project, thus using a generic checklist may not be enough

5. Their agenda in the project could be obvious as well as hidden. For example, in a project to outsource certain business processes to achieve cost effectiveness, the process owner may be against lay off of resources which he may not directly express.

6. They could have competing needs in the project. For example, in a project executed for an external customer, the customer may want a product that is high in quality, reliability etc. while senior management wants good margins meeting the SLAs and not necessarily over achieving them)

7. Their needs may change during the course of the project.

I’ll bring out in a future article how to effectively manage stakeholders.