How to Manage Stakeholder in a Project by Salman Nargolia, Mandeep Kumar, Rajan Pal (spicy books to read TXT) 📕

Introduction

The textbook definition of stakeholder is an individual, group or an organization who may affect, be affected by or precise itself to be affected by a decision, activity or outcome of the project. (6th Edition PMBOK guide). These individuals are affected by the success or failure of the project, they can be both internal people or external people. Most of the time people misunderstand stakeholders as the one who sponsors the project, but its not the case in this e-book, we will try to explain what stakeholders are, what is really at stake in a project and how we can manage these stakeholder or individuals.

What is at Stake and Stakeholders?

To be simple in words a stake is an interest or share in a project, on the other hand a stakeholder is an individual or an organization who are fundamentally affected by the undertaking of a project. Stakeholders can cause hindrance to an organizations daily functioning, long term goals and they can even shutdown an organization completely. Stakeholders can be very helpful for the undertaking of a project if we have their fullest support but they can be a nightmare when they oppose our project. In effect stakeholders have the

control to be a threat or a support to the project (Gibson,2000).

Classification of Stakeholders

To classify stakeholders in to different categories we first have to identify different groups of stakeholders, we need to collect information about them, identify their goals in the project, analyse their strength and weaknesses, and develop a plan to manage these stakeholders for the success of the project.

Stakeholder can be divided into two types:

Internal Stakeholder, these are the people who are the member of the project team and the one who is directly affected by the out come of project. For example, Project Manager, Sponsors, Project Teams, Suppliers, Vendors etc.

External Stakeholders, these are the people that can be affected by the project indirectly for example, community, government, business competitors etc.

Power and Influence of Stakeholder

The influence and power of a stakeholder can be determined by the stake that the stakeholder posses in the project. Power and influence can be termed as induce, persuade or coerce the action of other and is displayed when one part in relationship is able to impose its will on the other part (Johnson et al., 2005). A stakeholder may show his power by shear force (coercive power), money power (utilitarian power) or normative power.

(Figure 1.1 A Power and Interest Matrix)

As we know that stakeholder have rights, expectation, we should manage them in each project to avoid any of the hindrance caused by them and any of their influence that can be opposing projects objective. All the project be it big or small are affected by stakeholders, so we should recognise and manage them. The main idea here is to minimize the negative impact of these people.

The template in figure 1.1 is a simple and very famous tool for mapping stakeholders for a project. The place or quadrant the stakeholder is will help is decide the tactics and strategies for dealing with these stakeholders.

In this chapter we have successfully defined stake and stakeholder, the power and influence have been highlighted. And we showed how to classify stakeholders. The foundation has been set now to further

discuss various aspects of stakeholder management.

There are many organizations that struggle with stakeholder management, so in this chapter we need are going to list out best practices that were found out to be best for stakeholder management in a project.

Below is the list of practises in stakeholder engagement.

Stakeholders are Partners

If all the people working in a project are treated equally important and considers as project partners, it will help us achieve better result, now a days we see this in the software industry that excellent software’s are a result of excellent design and requirements.

So where do we get these requirements for, they will be received form collaboration and it only works when stakeholders understand and respect each other. As we should not forget that as pressure in the project increase the goal should not change for the success of the project to blaming each other.

Responsibility of Stakeholders

Many project managers believe that the only job project stakeholder have in a project is to give requirements, but that’s not true. Stakeholder have responsibility as well, stakeholder should always participate in the project as an equal contributor, this has many thigs such as documenting business rules, permits, talking to the governments etc.

Involve Stakeholder in Entire Project Cycle

Stakeholder should be involved thought the entire project cycle, they should participate in all process such as:

Review Documents

Participate in initial planning and development

Lesson Learned and retrospection

Provide additional requirements and supports

Prepare organization change

Provide support when necessary.

Make information transparent in the Project

The first benefit of being transparent in a project is that we can know our stand in the project and if we need any help, we can ask for it form our stakeholder. Usually stakeholders do not get any copy of project documents except status report, Stakeholder really has no idea where the project really stands transparency improves productivity and accountability.

Mapping of Stakeholder is basically a process to find out who the key stakeholders are that is directly or indirectly related to the project. Stakeholder mapping is basically is a process to find out the key stakeholder working or related to the project and deliver their best in the project. While working on a project there are number of stakeholders who are associated with the project so mapping of stakeholder becomes very important to meet the project manager expectations. Engaging with key stakeholder helps project manager to achieve required performance in the project. Stakeholder can be individual or multiple depending on the infra-structure of the project.

Mapping of stakeholder is done in two levels:

Interest.

Influence.

Stakeholder are those who are affected by the project outcome but don’t have any power to influence project requirements whereas on the other hand stakeholder who has the power of setting and modifying project requirements comes under influence category.

Purpose of stakeholder engagement: Well working on project is never easy the main purpose of stakeholder engagement is, through this process any company would know their stakeholders who all are associated with the project and also the company would know their expectations and desire. Once the company knows their stakeholder it will become much easier for the company that what their stakeholder wants from them and in what time they need it. It gives company an idea about the expectation of their stakeholders what actually they expect.

Effective engagement strategy helps to translate stakeholder needs into organisational goals and create the effective development strategy. To complete the project successfully on time an organisation must have a clear vision and goals derived through a good planning process or a great strategic plan which can only be done through the engagement of stakeholders. The key stakeholders who are related to the project and their opinion are very important at the starting and planning stage of the project. Stakeholder can differ depending on the modification of the project.

Stakeholder can be vendor, suppliers, and shareholder or can be government officials depends on the type of project it is. Stakeholder can be internal or they can be connected externally also. Although all stakeholders have different perspective for success in the project but have the same vision to successfully complete the project on time with meeting all demands and requirements that are expected. Mutual understanding among stakeholder helps to build a cohesive vision for the future. It brings the value to the strategy in marketing and planning process by implementing an active consultation and engagement process providing an opportunity for open discussion and debate in order to achieve the future ambition.

Objective of Stakeholder Engagement Plan: A stakeholder engagement plan is a basic strategy to communicate with project stakeholders to achieve their support for the project so that It can be delivered on time fulfilling all the requirements. It specifies the frequency and the type of communications, media and location of the projects. Following are the steps to develop the stakeholder engagement plan:

Identify the stakeholders of the project: This is an initial step that is taken by the project manager or the organisation to identify the stakeholders who are associated with the project and who are the key stakeholder of the project. This stage also helps the project manager to get the clear vision of the project. Also it helps the project manager to manage the expectations of the clients.

Power: Power of stakeholder is imperative to get a sense of how much influence stakeholder has. For example, the government regulatory body has the power to stop the project at on-going process they can withhold their approval and stop the project immediately. The success of the project is dependent on keeping them informed on on-going process.

Interest: The stakeholder’s interest is analysed and prioritized. Their needs and wants are described to a point where the stakeholder is well understood by the project management team and know what their demand and expectations are.

Mapping Technique: As we know s6takeholder can be internal or external, but they are those people who are related with the project and also affected by the project outcome. In order to get them together and know who all people are related to the project the mapping technique is often used by the organisation.

Mapping of stakeholder is a four-type process:

Identify Stakeholders: First basic step on working on the project is to know who all stakeholder related to the project and they can be connected internally or externally with the project but is equally important to the project.

Analysing and understanding your stakeholder Perspective: Every stakeholder has their different perspective regarding individual situation and have different opinion but they have all have the same vision to get success in the project. So, we must know value their opinion and also know what they are expecting and how their contribution can make a project successful.

Prioritizing and ranking stakeholders: It is very important stage that we know about key stakeholder who are related with the project and prioritize them. We must value their opinions and their ideas and opinions we should implement that at the starting and planning phase of the project. It help the project