Learn how to Perform an Effective Project Stakeholder Management

Most of the projects fail because of poor stakeholder management as stakeholders are one of the key factors which play a huge role in deciding the success or failure of a project. In this article on Project Stakeholder Management, I will be giving you a complete insight into who exactly are these stakeholders and why a separate Knowledge Area has been dedicated for their management along with various process involved in it.

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What is Project Stakeholder Management?

Project Stakeholder Management is one of the ten Knowledge Areas of the project management framework that exclusively deals with the resources involved in a project. According to PMBOK^® Guide – Sixth Edition,

Project stakeholder management is the process where a project manager needs to form, monitor and maintain productive relationships with the investors involved in the project. This is mostly done by influencing the expectations of the stakeholders regarding the result gained from their initial investment in the project appropriately. It also helps a business towards its defined goals by preserving the existing investor’s satisfaction and furthermore, recruiting new investors as per requirement but in an ethical way.

Before explaining project stakeholder management in further detail, you must have a clear understanding of who a stakeholder is.

In any business, a stakeholder is normally an investor in a company or a project and plays a vital role in companies business decisions. A stakeholder need not be an equity holder if the company but can be a regular employee as well. To put it in simpler terms, stakeholders are of three types:

1. Internal Stakeholders: These are the people who own or work in the organization such as business partners, board members, and employees.
2. External Stakeholders: These are the people who are affected by the performance and the outcomes of a business such as local city government, community residents, nonprofits business sponsors, the trade media, etc.
3. Connected Stakeholders: This group includes people like shareholders, vendors, suppliers, retailers, contractors, customers, wholesalers, sales reps, distributors, etc.

To conclude this, you can say that a stakeholder is a person or a group of people who have an interest in your project and will be influenced by its deliverables/ output. Thus for a project manager, it becomes very important to understand the values and issues that stakeholders have in order to resolve. Addressing stakeholders issues are very necessary for avoiding any possible conflicts and ensuring that everyone remains satisfied until the completion of the project.

I hope this clears who is a stakeholder and what role he plays in an organization. Moving ahead, let’s now see with proper stakeholder management how a project can be benefitted.

Need for Project Stakeholder Management

1. Stakeholder Identification: With better identification and engagement of valuable stakeholders in your project, the implementation of the project will be more aligned to the project managers benefit.
2. Relationship Building: Stakeholder management helps in early relationship building with the stakeholders which leads them to engage earlier in the project. It is really helpful in building rapport with the public.
3. Fewer Surprises and better communication: Since everything is well discussed and communicated with the stakeholders, it reduces the chances of getting caught off guard and in turn reduces the number of iterations or modifications.
4. A better understanding of needs and concerns: With Stakeholder management, you get to communicate with each of the stakeholder involved in your project which helps in getting a clear cut view of their idea about the project and related concerns.
5. Better time and money investment: Stakeholder management keeps you in the loop with the stakeholders which results in continuous input and regular feedback from them. This ensures that the tasks that you are working on hold the highest value to the project.
6. Happier Stakeholders: Since you are keeping your stakeholders in a proper loop and with regular involvement, they will feel happy and satisfied.
7. Improved Reputation: Being a project manager it is very important to hold good rapport in the market. With good stakeholder management skills, you can relate well with people in their projects which in turn will help you in adding stars to your reputation as well.

Now that you are aware of various benefits and need for stakeholder management in a project, let’s now dive deeper to get a better insight on how actually it works internally.

Project Stakeholder Management Processes

Project Stakeholder Management knowledge area consists of four processes. They are:

1. Identify Stakeholders
2. Plan Stakeholder Engagement
3. Manage Stakeholder Management
4. Monitor Stakeholder Engagement

Identify Stakeholders

The initial process of project stakeholder management is Identify Stakeholders. In this process, the project stakeholders are regularly identified, analyzed and various information related to them such as their interests, involvement, interdependencies, influence, and potential impact on project success are documented. It is performed at periodic intervals throughout the project lifecycle which helps the project team in identifying appropriate focus required for the engagement of each stakeholder involved in the project.

Below I have listed down the various inputs, techniques, and outputs involved in this process of project stakeholder management:

Plan Stakeholder Engagement

The second process of project stakeholder management is Plan Stakeholder Engagement. In this process, various approaches are curated in order to involve the stakeholders on the basis of their needs, interests, expectations, and latent impact on the project. It is performed at periodic intervals throughout the project lifecycle and helps in developing a realistic plan which can effectively interact with the stakeholders.

In the below table, I have listed down various inputs, tools, and techniques and outputs involved in this process:

Manage Stakeholder Management 

Next process of this knowledge area is Manage Stakeholder Engagement. In this process, various steps are taken for better communication and maintain working with stakeholders so that by the end of the project all their needs and expectations are met. Along with this their concerns and issues are addressed and appropriate stakeholder involvement is fostered as well. It is performed throughout the project lifecycle and helps a project manager in increasing support and minimizing resistance from the stakeholders.

I have listed down the various inputs, tools & techniques and outputs involved in this process:

Monitor Stakeholder Engagement

Monitor Stakeholder Engagement is the final process of project stakeholder management Knowledge Area. As the name suggests, in this process relationships of project stakeholders are monitored and various strategies are tailored in order to engage the stakeholders using engagement plans and strategies. This process is performed throughout the project lifecycle and helps in maintaining as well as increasing the efficiency and effectiveness of the implied stakeholder engagement activities. This process is very crucial to perform while the project evolves and its development environment varies.

Related Article – What is Interpersonal Communication?

Various inputs, tools and techniques, and outputs involved in this process have been listed below:

This brings us to the end of this Project Stakeholder Management article. Hope it helped in adding value to your knowledge. If you wish to learn more about project management or project management certifications you can check my other articles as well.

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