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What is Stakeholder Management?

24 Jan 2024
What is Stakeholder Management?

Stakeholder refers to the individuals and organisations actively involved in the project or whose interests may be positively or negatively affected due to project execution or successful project completion.

Stakeholder management is identifying individuals or groups interested in the project or organisation and then developing and maintaining relationships with them. Managing stakeholders is essential because they can significantly impact a project's success or failure. For example, if you're trying to get a new product off the ground, you'll need to convince customers to buy it. And if you're trying to implement a new company-wide process, you'll need to get buy-in from employees. 

Stakeholders are those other than project managers and project leaders. Stakeholders may include the project sponsor, project team, and users who will use the product/service. Stakeholder management is crucial in project relationships.

This article will describe stakeholder management, how to develop stakeholder management strategies and the process. 

What is Stakeholder Management?

Project stakeholders can be internal (e.g., members of your team) or external (e.g., customers, suppliers). Each stakeholder may have different interests, personalities and perspectives, and all of them as a group may negatively or positively impact the project delivery.

Thus, Stakeholder management is about understanding what each stakeholder wants from the project.

In other words, Stakeholder management is the process of engaging with someone who will be impacted by your project's success or failure in a professional capacity.

 Good stakeholder management will help you to:

  • Build strong relationships with stakeholders
  • Communicate effectively with stakeholders
  • Identify and manage risks associated with stakeholders
  • Maximise opportunities for successful project delivery

Developing Your Stakeholder Management Strategy

One of the key responsibilities in project management is to manage stakeholders. This means identifying who they are, understanding their interests, and developing strategies to engage them throughout the project lifecycle.

Developing an effective stakeholder management strategy involves understanding the needs and expectations of your key stakeholders and then aligning your communication and engagement activities to meet those needs.

The following pointers can help you get started:

 1. Define your stakeholder groups: who are they, and what are their concerns?

 2. Identify the key stakeholders within each group, such as the decision-makers, opinion leaders, etc.

 3. Understand what each stakeholder group wants from you and how their expectations might change over time.

 4. Develop a communication plan for each stakeholder group, outlining how you will inform them about your project or initiative.

 5. Make sure you have a process in place for managing stakeholder feedback so that you can quickly address any concerns that arise.

By developing a comprehensive stakeholder management strategy, you can ensure that everyone involved in your project or initiative is kept up-to-date and engaged throughout its duration.

Identify your Stakeholders

As you develop your stakeholder management strategy, it is crucial to identify your stakeholders. To do this, you must consider internal and external factors that may impact your organisation.

Internally, you will want to consider departments or teams that your project or initiative could impact. For instance, if you are launching a new product, you will need to involve your marketing and sales teams in the process. External stakeholders could include customers, suppliers, partners, or local community members.

Once you have identified all potential stakeholders, you will need to assess their level of interest and influence. This will help you ascertain how much time and resources you should invest in engaging with each group. For example, a key customer may have a high level of interest and influence, while a local community member may have a low level of interest but a strong influence.

Prioritise Your Stakeholders

After identifying, it is crucial to prioritise your stakeholders based on their level of interest and influence. This will ensure you invest your time and resources in the right areas.  

Prioritising your stakeholders means identifying which stakeholders are the most important to the success of your project and ensuring that they are given the attention they need.

There are some factors that you can consider when prioritising your stakeholders. The first is their level of interest in the project. Stakeholders with a high level of interest are typically more involved in the project and have a more significant impact on its success or failure.

Another factor to consider is the power each stakeholder has over the project. Stakeholders with more power can make decisions that significantly impact the project, so it's essential to keep them informed and engaged throughout the process.

Finally, it would help to consider each stakeholder's ability to influence others. Stakeholders who influence others can help promote your project or support it when necessary.

Once you've considered these factors, you should create a list of your stakeholders in order of priority. This will help you ensure that you're giving proper attention to the most important people in your project.

There are a variety of stakeholder management techniques that you can use, but one of the most crucial is to prioritise your stakeholders.

Interview Your Stakeholders

To prioritise and manage your stakeholders, you need to understand them. One of the effective ways to do that is to interview them.

As a project manager, you may feel, "I already know my stakeholders, and I don't need to interview them." However, taking the time to sit down and talk with your stakeholders will give you a whole new level of understanding about what they want and how you can best work together.

 When you're interviewing your stakeholders, there are a few key questions you can ask:

  • What are their goals and objectives?
  • What are their expectations for the project?
  • What is their preferred method of communication?
  • What information do they need from you?
  • What is their level of influence on the project?
  • What could make them unhappy with the project?

By asking these questions, you'll better understand what motivates and is important to your stakeholders. Armed with this knowledge, you can more effectively manage your stakeholders throughout the project.

Create a Power Interest Grid

A Power Interest Grid is a tool used to help identify and assess the interests and power of stakeholders. It is a grid with three axes: power, interest, and salience. 

Power is the potential of a stakeholder to influence the project. Interest is the degree to which a stakeholder is affected by the project. Salience is the degree to which a stakeholder's interests are known and considered in project planning.

The Power Interest Grid can be used to help identify key stakeholders, assess their influence on the project, and develop strategies for managing them.

Set & Manage Expectations

Setting and managing expectations from the beginning is vital to successfully managing stakeholders. This means being clear about what you can and cannot do, what you will and will not do, and what the timeline for deliverables will be. It also means setting realistic expectations for yourself and the team.

If you can effectively set and manage expectations, achieving successful stakeholder management will go a long way.

Stakeholder Management Process

The stakeholder management process is a well-ordered way to identify, assess, and manage the expectations of individuals or groups with a vested interest in the outcome of a project.

The process begins with identifying all stakeholders and their interests. Once all stakeholders have been identified, their level of influence and engagement must be assessed. This assessment will help determine what communication and management strategies must implement to effectively manage expectations.

Once the stakeholder management plan is in place, monitoring and adjusting as necessary throughout the project lifecycle is essential. Regular reviews will ensure that stakeholders remain satisfied and that the project remains on track.

Stakeholder Analysis

In any project, it's crucial to identify and assess the interests of key stakeholders early on. This process is known as stakeholder analysis.

There are several ways to go about conducting a stakeholder analysis. One popular method is to map out the stakeholders according to their interests and influence over the project.

It's also important to consider each stakeholder's goals and objectives. What do they hope to gain from the project? What are their concerns? Identifying this information can help you develop strategies for managing stakeholders throughout the project lifecycle.

Stakeholder Identification

When it comes to projects, there are always a variety of stakeholders involved. This can include project sponsors, managers, team members, and others vested in the project's success or failure.

The first step in effective stakeholder management is to identify all stakeholders involved in the project. This step includes understanding their role in the project, their level of influence, and their expectations.

After identifying all the stakeholders, assessing their needs and interests is essential. These details will be used to develop a strategy for managing the stakeholders throughout the project lifecycle.

Stakeholder Mapping

To effectively manage stakeholders, mapping out who they are and their interests are vital. This process is known as stakeholder mapping.

There are different ways to go about mapping stakeholders. One popular method is to create a grid with two axes: influence and interest. Influence refers to how much power or sway a stakeholder has over the project or initiative, while interest refers to how invested the stakeholder is in its success or outcome.

Once you have mapped out your stakeholders, you can start developing strategies for managing them. This may include engaging with them regularly, keeping them up-to-date on progress, or addressing their concerns promptly.

The most important thing is to make that all stakeholders are kept happy and on board with the project – otherwise, it could be at risk of failure.

Stakeholder Prioritisation

There are many different ways to prioritise stakeholders, but some standard methods include using a grid analysis or a stakeholder map.

A stakeholder map is another tool that can be used to prioritise stakeholders. This method involves plotting the stakeholders on a map according to their power and interest. This can be a helpful way to see which stakeholders are the most important to the project's success.

A grid analysis is a tool that can help you visualise and compare the importance of different stakeholders. This method can be used to identify which stakeholders should be given the most attention.

Stakeholder Engagement

Stakeholder engagement is the process by which businesses and organisations seek to understand and respond to the needs and expectations of their key stakeholders.

Engaging stakeholders is essential to the success of any project or initiative. Stakeholders can provide valuable insights, feedback, and support that can help make your project more successful.

There are some ways to engage stakeholders, but some of the most effective methods include holding meetings, sending updates and information, and involving them in decision-making.

By meeting stakeholders regularly and involving them in decision-making, you can ensure that your project or initiative has the best chance of success.

When engaging stakeholders, it is essential to remember that you are trying to develop a relationship of trust and mutual respect.

Here are some tips on how to engage stakeholders in a way that is productive and positive:

- Be clear about your objectives

- Do your research

- Be transparent

- Be open to feedback

- Be respectful

- Seek common ground

There are many different ways to engage stakeholders, and the most effective approach will vary depending on the context and goals of the engagement. However, some common stakeholder engagement methods include surveys, focus groups, interviews, and forums.

The benefits of engaging stakeholders include improved communication, increased understanding of stakeholder needs, and building trust and relationships. Additionally, engaging stakeholders can help businesses and organisations identify opportunities and make better decisions. IPM offers Stakeholder Management and Communications course to help you explore the process of identifying stakeholders, analysing their diverse roles and investments in the project, managing stakeholders, dealing with problem stakeholders, and listening to stakeholder concerns. After course completion, you can make an efficient stakeholder management plan, manage conflicts and maintain stakeholder engagement.