Building relationships and managing issues; the keys to effective stakeholder management
By: Oppong Paul
Tags: Communication, Best Practices, Change Management, Leadership, Stakeholder

Stakeholders have the ability to make or break projects, if they put their minds to it.

This makes them a risk to the likelihood of the project being completed. For this reason, the stakeholders of any project should be pinpointed, understood and managed, to increase the likelihood of project success. In this article we will look at who stakeholders are, what their interests might be, understanding them and managing them effectively, to give a project the greatest chance of succeeding.

Identifying Stakeholders

Stakeholders may be understood as any person or group that has an interest (or a “stake”) in the project or programme. Within the organisation they might include the board, senior managers, different teams, internal customers and staff, among others. Externally to the organisation they could include customers, suppliers, the media, local or national government, lobby groups, the community and different agencies. One useful method to understand who the stakeholders are for any given project is to brainstorm who they might be with the team.

What are Stakeholders’ Interests?

Stakeholders may have interests in projects for a variety of different reasons, depending on who they are, and their relationship to the project. In a number of cases, interests may be financially motivated. For example, the board may have an interest in an IT automation project succeeding, because it may reduce costs for the organisation. Alternatively, a customer will have an interest in the project not overrunning on budget. Operational interests may also have a role to play, especially with regard to time. Media and community groups may be interested if a project is likely to impact on the public or local environment in some way — if for example, a new supermarket is being built, or a bypass road. Other stakeholder interests might include employees who may resist change, especially if they have not been consulted in any way. Resistance to change can be one of the most detrimental factors impacting on the likely ability for the project to succeed.

Understanding Stakeholders to Better Manage Them

Best practice stakeholder management requires understanding the interest that stakeholders have in a project, and the power they may have. You can rank stakeholders as either having high or low interest, and high or low power. This categorisation of the different stakeholders helps guide how you should work with them to engage them effectively on the project. Some stakeholders may have a high level of interest but a low level of power, and these should be managed differently from those with high power and high interest, for example. High power and low interest groups need to have an eye kept on them, as they can significantly influence a project’s success if interest is sparked in them.

The most important stakeholders from a stakeholder management perspective are those that have high interest and high power. These groups may be considered key stakeholders, and they need to be carefully managed to drive the success of the project. They have the ability to help the project to succeed, but they can also bring it down if they are not engaged. Key stakeholders will vary depending on the type of project, but in a business, they will typically include the business owner that is eager for project success, and possibly the board too. In public projects the government or local council may very well be a key stakeholder.

While some stakeholders may have high interest and low power, and might therefore not be considered a threat, they still need to be consulted and their interests managed. This is because stakeholder groups can combine with one another to become more powerful — such as community groups working with the media, to influence government, for example.

Managing Stakeholders Effectively

Good stakeholder management is a function of leadership. Stakeholders need to understand what is going on and why, and they need to see projects moving forward with purpose and adding value. Being clear about the vision and direction helps a great deal. Ask yourself what it is that stakeholders want, to help you present messages to them that will be helpful in explaining how you are delivering that to them.

One of the main tools that a programme or project manager can use to work with stakeholders effectively is communicating well with them. This means building relationships with them and discussing their needs with them. Any communication should be two-way, e.g. not just talking, but listening too. It is only through consulting with stakeholders that it is possible to develop solutions that will be palatable to the widest number of stakeholders. Communication needs to be regular, to keep stakeholders up to date on aspects of the project that are of particular interest to them. A common stakeholder complaint is not being kept up to date, and this is easily rectified with good communication.

Another tool is other members of the project, who need to show consistency in the way that they work with stakeholders, to build trust. Employees working on the project are all key representatives of it, in the eyes of the stakeholders. The bottom line is that building and maintaining relationships is critical to effective stakeholder management. Keeping in touch with stakeholders throughout the project, monitoring their power and interest and ensuring that most are kept satisfied as far as possible will give the project the highest chances of achieving its goals and delivering value.

Summary

The reality of project management is that some stakeholders will have the capability to significantly influence whether a project can succeed or not. This means that a key component of a project or programme manager’s job is to understand stakeholder needs, and work with them effectively, building relationships and managing issues, to ensure that they stay on side. Understanding a stakeholder’s level of interest and power with regard to the project is helpful in shaping the way in which the project manager manages the situation with the stakeholder. Both communication and building trust are essential tools in effective stakeholder management.