Who is the stakeholder in a project?

Stakeholders are those who are interested in or affected by the project and its results.

This includes internal and external entities such as project team members, project sponsors, executives, customers, suppliers, partners and governments.

Effective stakeholder management requires not only stakeholder understanding of the values ​​and issues that need to be addressed, but also the involvement of all stakeholders throughout the life of the project.

In fact, according to a January 1996 paper published by Gartner Group , inadequate stakeholder engagement and infrequent communication with sponsors were the primary causes of project failure. Although these findings first surfaced decades ago, the findings remain more important than ever.

In stakeholder management, relationships are important and lead to increased trust. People work together more effectively when there is trust. Investing in stakeholder management (investing in building relationships and trust) is an investment in the success of your project.

Stakeholders, especially those with high power and interest, are the most important people in a project and central to its success. We will discuss more about the power / interest later in this article.

What is stakeholder management?

Stakeholder management is managing the expectations and requirements of stakeholders in a project. This includes identifying and analyzing stakeholders and systematically planning communication and engagement with them.

A common problem in companies with many stakeholders is that the interests of the various stakeholders may not be aligned. Sometimes their interest may be in direct conflict. For example, it is often assumed that the primary purpose of a company from the perspective of its shareholders is to maximize profits and increase shareholder value.

Labour costs are unavoidable for most businesses, so businesses can try to keep these costs under tight control. This can anger another set of stakeholders: Employees. The most efficient companies successfully manage the interests and expectations of all stakeholders.

Types of Stakeholders

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The main differences between internal and external stakeholders are:

  • Individuals or groups that work for the organization and actively participate in the operation of the business are called internal stakeholders. External stakeholders, on the other hand, are individuals or groups not employed by the organization, but who are affected by its activities.
  • Internal stakeholders provide services to the organization, while external stakeholders do business with the company externally.
  • Internal stakeholders are directly affected by the company’s activities as they are part of the organization that faces external stakeholders.
  • Internal stakeholders are employed by the company, but external stakeholders are not. Company internal affairs are known to internal stakeholders. However, external stakeholders are unaware of these issues.
  • Internal stakeholders are primary stakeholders and external stakeholders are secondary stakeholders.

Not sure where to start reviewing your stakeholder management and spot opportunities for improvement? Here are some ideas for making your project a success.

What is a stakeholder register?

A stakeholder register is part of the overall project plan. It should be completed early in the planning process and updated as the plan evolves to reflect the project. There are various tools and processes associated with stakeholder management. Stakeholder Register, Stakeholder Analysis, and Stakeholder Influence Matrix,. Stakeholder Register is a key planning tool and resource used during the life of a project.

Full NamePositionRole in the ProjectContact InformationRequirementsExpectationsInfluence LevelPower LevelCurrent & Desired Engagement Level
[last name, first name][ company, designation][ owner , resident][ phone, mail ][ requirements 1,2,3 ][ expectations 1,2,3 ][ low, medium, high ][ supporter ]

When reviewing a completed register, the project manager should be able to answer questions such as these examples:

  1. How many stakeholders does the project have?
  2. How can each stakeholder be contacted?
  3. Which stakeholders influence the entire project?
  4. Which stakeholders influence only certain segments of the project and which segments?
  5. What are communication preferences for each stakeholder?
  6. What are the communication frequency preferences for each stakeholder?
  7. Are there connections or interdependencies among stakeholders?

Stakeholder analysis

Projects require the participation, direction, and approval of many people throughout the organization. Any of these stakeholders can become a barrier to the success of a project if they do not understand or agree on the project’s goals and execution plan.

However, getting the support and buy-in of these stakeholders early on can turn many of them into enthusiastic supporters of your initiative. Therefore, before embarking on a complex business project, it is a wise strategy to conduct a stakeholder analysis, identify all potential stakeholders, and determine how best to gain their support.

Stakeholder analysis helps with the identification of

  • Stakeholders’ interests
  • Potential risks and misunderstandings
  • Mechanisms to positively influence other stakeholders
  • Key people to be informed about the project during the execution phase
  • Negative stakeholders as well as their adverse effects on the project

How Do You Conduct a Stakeholder Analysis?

Stakeholder analysis exercises vary by company, industry, and the team performing it (eg, project management vs. product management). However, there are useful procedures common to most of these types of analysis. This is how many organizations do stakeholder analysis using a Power / Interest grid.

Once you’ve completed the brainstorming session o determine your stakeholders , you should start sorting them out in terms of their influence, interest, and involvement in the project.

Power / Interest Grid

Once you have a long list of stakeholders ( people and organizations ) affected by your work. Some of them may have the power to block or advance. Some people are interested in what you do, some are not. This is where the Power/ Interest grid comes in handy to segregate/prioritize stakeholders. This helps identify stakeholders based on their power and interest in the project. By mapping stakeholders to a power/interest grid, you can determine who has more or less power to influence a project, and who has more or less interest.

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  • High-power and high-interest people should be closely managed. You must fully engage these stakeholders and make your most significant efforts to satisfy them.
  • High-power and low-interest people should be kept satisfied. Spend enough time with these stakeholders to satisfy them, but not so much that you begin to irritate them.
  • Low-power and high-interest people should be kept informed. Inform these stakeholders, keeping them up to date, and regularly talk to them to ensure no significant issues arise.
  • Low-power and low-interest people should be monitored. Watch these stakeholders with minimum effort, and don’t over-communicate.

Example

Emma, a stakeholder on your project, has been plotted on the power/interest grid as high interest with low power. What’s the BEST approach for managing her engagement?

  1. Make her responsible for a deliverable on the project.
  2. Keep her informed of all of the decisions that might affect the project’s outcome.
  3. Closely manage her requirements and expectations.
  4. Ignore her requirements and expectations, since she doesn’t have the power to affect the project’s outcome.
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How to create an effective stakeholders engagement assessment matrix?

Every project has a list of stakeholders, and we need to find the best engagement strategy to address with each of them.

A stakeholders engagement assessment matrix helps you do just that – what it is, what it isn’t, the benefits of having one, and the easiest way to create one.

What is the Stakeholder Engagement Score Matrix?

The Stakeholder Engagement Matrix is a model that project managers use to assess current stakeholder engagement on a project.

Stakeholders can be classified in five different ways.

  • Unaware. At this first level, stakeholders are unaware of the project and the potential impact its results may have on them.
  • Resistant. Stakeholders in this category are aware of the project and resist change.
  • Neutral. Neutral stakeholders are aware of the project but neither oppose nor support it.
  • Supportive. These stakeholders are aware of the project and its potential impact and support change.
  • Leading. Stakeholders in this category know the project and are actively committed to its success. These stakeholders are sometimes called “change champions”
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In addition to defining the current level of engagement, the matrix can be used to guide discussions about the desired level of engagement for each stakeholder or stakeholder group.

What are the benefits of the Stakeholder Engagement Matrix?

The matrix will reveal how stakeholders currently feel about the project, with this information, project managers can:

Grow project support

By identifying stakeholders who broadly support or are actively involved in the project, the team can target communication to ensure their continued support. Ensuring that these stakeholders have the most up-to-date information available and encouraging them to share that information with others can be an important step in preparing your organization for the changes ahead. This is especially true for stakeholders who are influential within the organization and trusted by others.

Build awareness and engagement

Surprised people with unwanted or difficult changes is one of the easiest ways to negatively impact a project’s chances of success. People want to be kept up-to-date with what’s going on, to be involved in change, and to have the opportunity to provide feedback.

By identifying stakeholders who may seem unaware of the project, the team can create an effective communication management plan focused on increasing their awareness and engagement. The project team may be able to make them advocates for change, or provide useful feedback that otherwise would not have surfaced.

Note:
In some cases, the project team keep updates confidential deliberately. Like, the project is very sensitive and could lead to potential job losses. In this case, the team may keep stakeholders unaware of the project until appropriate support mechanisms are in place.

Convert resistant or neutral stakeholders

Finally, the Stakeholder Engagement Matrix helps you identify and address unruly or neutral stakeholders. This is important because you can find out why the project team holds this position.

Perhaps they perceive the project goal as not favorable to them. Alternatively, your organization may have previously attempted the exact change and failed. Or worry that they don’t have the right skills for the future. Whatever the reason, exploration and understanding allow teams to influence their position.

These could be targeted updates to show positive project progress compared to failed projects. Or we can share training and development plans that help people feel ready for change. It may have just acknowledged their concerns. Sometimes it’s enough to make them feel heard to allow them to participate.

Responsibility Assignment Matrix (RACI Matrix)

In project meetings we often hear,

  • I didn’t know you needed to be involved in this issue
  • I didn’t know you needed to be involved in decision-making
  • I didn’t know you needed to be involved.
  • I didn’t do it.
  • I don’t know what I was responsible for.

When the lines of responsibility blur, the lines of whether a given task has been properly performed and completed are blurred. This is role confusion.

How to avoid the role confusion? The key to successful project management starts with understanding roles and responsibilities. Concrete and clear definitions of roles and responsibilities lead to project success. This can be the project manager’s first project win or project failure.

Defining job roles and responsibilities ensures that everyone is aware of the level of involvement required and is prepared to ensure project visibility. Additionally, establishing job roles and responsibilities helps implement communication plans, governance, and more.

The RACI (Responsible, Accountable, Consulted, Informed) chart is a tool that helps clarify roles and responsibilities. Also known as RACI matrix, RACI model, RACI chart, or just RACI.

What is a RACI Chart?

RACI is a type of Responsibility Matrix or Responsibility Assignment Matrix (RAM) that helps avoid role confusion. The RACI matrix is ​​a standard document and best practices used to map and document a project’s key activities and deliverables and the individuals or groups responsible for their completion, approval and recognition.

The project manager creates the RACI at the beginning of the project as a critical factor in the initial staffing plan. RACI diagrams are typically designed for complex projects. However, role confusion can occur in simple tasks, so implementing RACI charts is beneficial even for small projects.

RACI definition

The acronym RACI stands for different types of responsibilities -Responsible, accountable, consulted and informed. In the RACI matrix, the initials R, A, C, and I are assigned next to the person or position with each level of responsibility for each task or outcome. Within RACI, individuals fill different roles based on task or performance, but not multiple roles.

The challenge with the RACI approach is to clarify the definition of roles. If you’re not using a template with a quick definition, consider including the template in the margin or clarifying the link to the definition to avoid confusion. person in charge

Responsible
The person responsible for a task or deliverable is typically responsible for producing or completing the activity. The responsible person is usually a member of the working-level project team. For example, project managers, business analysts, developers, or anyone who creates marketing or technical documentation.

Accountable
An accountable person is usually the individual or group responsible for ensuring that the work is complete and proper. This is typically an authorized signatory or decision maker. Accountable parties are typically business owners, corporate sponsors, steering committees, key stakeholders, information security or governance bodies, or managers of critical responsibilities.

Consulted
A consultee is someone to whom we should seek feedback and opinions. The parties consulted may be legal, information security, compliance, and subject matter experts (SMEs) from other departments within the potentially affected organization. If we’re working on a new product, this could be your entire organization.

Individuals or groups consulted should consult to understand requirements, limitations, and risks before starting a task or deliverable, and to ensure that all aspects are addressed in the deliverable after completion.

Informed
An informed person is someone we want to keep up to date with. These people do
not need to be consulted or involved in decision-making. Add this group to our CC list to stay current on issues, decisions and progress. We will also invite this group as an optional attendee for the kick-off meetings and project demonstrations.

Exercise

  1. Raj, the sponsor of a large publishing project, meets with all of the stakeholders on the project to ask for their support in an upcoming testing event. Which engagement level is he displaying?
    1. Unaware
    2. Resistant
    3. Supportive
    4. Leading
  2. Which of the following is not an input to the Plan Stakeholder Engagement process?
    1. Enterprise environmental factors
    2. Organizational process assets
    3. Work performance data
    4. Stakeholder register
  3. You take over for a project manager who has left the company, and realize that there are stakeholders in the project who haven’t been included in any of the status meetings so far. Some upper managers think the project is not going to succeed, and others are actively thinking of cancelling it. Which document is the FIRST one that you should create to solve this problem?
    1. Stakeholder register
    2. Status report
    3. Budget forecast
    4. Performance report
  4. In a monthly steering meeting, you ask one of the stakeholders on your project if she has reviewed the latest document updates you’ve made since the last meeting. She says, “I’m not working on that; I’m not even sure what it is.” How would you BEST describe her level of engagement?
    1. Unaware
    2. Resistant
    3. Supportive
    4. Leading
  5. You’re managing a construction project. You created a stakeholder register and Stakeholder Management plan, and now the team is working on the project. You’ve been managing the work, and now you’re looking at the work performance data to keep your stakeholders informed of the Status Of the project. You’ve discovered a change in the way your stakeholders look at the budget for your project. Which of the following BEST describes the next thing you should do?
    1. Update the risk register to include any changes to the risk strategy.
    2. Compare the work performance information against the time, cost, and scope baselines and look for deviations.
    3. Create a change request and update the issue log and Cost Management plan to reflect the approved change.
    4. Hold a status meeting.
  6. Ram, a stakeholder on your project, has been plotted on the power/interest grid as high interest with low power. What’s the BEST approach for managing his engagement?
    1. Make him responsible for a deliverable on the project.
    2. Keep him informed of all of the decisions that might affect the project’s outcome.
    3. Closely manage his requirements and expectations.
    4. Ignore his requirements and expectations, since he doesn’t have the power to affect the project’s
  7. Which Stakeholder Management process is in the initiating process group?
    1. Manage Stakeholder Engagement
    2. Identify Stakeholders
    3. Plan Stakeholder Engagement
    4. Register Stakeholders
  8. Sam, the sponsor of the industrial design project you’re managing, is plotted on your power/interest grid as high power, high interest. Which is the BEST approach for managing her requirements and expectations?
    1. Keep her informed of all project decisions.
    2. Manage her requirements and expectations closely.
    3. Keep her satisfied by inviting her to all of the team meetings.
    4. Understand her goals and expectations, but don’t do anything with them.
  9. Which is NOT an input of the Identify Stakeholders process?
    1. Agreements
    2. Enterprise environmental factors
    3. Project charter
    4. Project Management plan
  10. John is the project manager of a project that has teams distributed in many different places. One of the stakeholders in his project has asked that all formal communications from the project be shared with all of the teams, regardless of their location. Which of the following is not a tool that Kyle’s team will use to monitor this stakeholder requirement:
    1. Data analysis
    2. Data representation
    3. Meetings
    4. Inspection
  11. Which information is NOT included in the stakeholder register?
    1. Stakeholder name and group
    2. Stakeholder requirements
    3. Stakeholder expectations
    4. Stakeholder deliverables
  12. Which Stakeholder Management process is in the Monitoring and Controlling process group?
    1. Distribute Information
    2. Manage Stakeholder Engagement
    3. Plan Communications
    4. Monitor Stakeholder Engagement

Answers:

  1. 4
  2. 3
  3. 1
  4. 1
  5. 3
  6. 2
  7. 2
  8. 2
  9. 4
  10. 1
  11. 4
  12. 4

Notes

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