Enterprise Solutions

White Paper

Effective Stakeholder Management

About the Author

Fabia McLean Bourda,

MBA, SPHR, PMP
Ms. Bourda leads TCS' HR Strategy and Transformation Practice, which includes
Organizational Change Management around ERP solutions. She has extensive Human
Capital Management (HCM) and people management capabilities in systems, processes,
strategy, and transformation, and is knowledgeable in Oracle HCM and some niche
applications. She has over 20 years of progressive senior management experience
working with and influencing Fortune 500 C-level executives in the area of human
capital management including organizational change management.
She holds an Executive MBA degree in Strategic Leadership and International
Management from The University of Texas, Dallas. She also holds two Bachelor degrees
and a Master degree, as well as professional certifications in human resources (SPHR) and
project management (PMP). She has been teaching at colleges and universities in
Canada and the U.S. since 1990.

The successful undertaking of project management requires effective stakeholder

management to support organizational and individual objectives through understanding
and influencing the internal and external environments. Therefore, the identification and
management of stakeholders are a key skill for all project managers. Stakeholders are
individuals who represent specific interest groups served by the outcomes and performance
of a project or program. Project managers are accountable for the end-to-end management
of their projects including performance and expectation management of individuals who
may be outside their direct control.
Project managers should consider the people issues surrounding projects and recognize that
the appropriate involvement and management of stakeholders can be a critical success
factor. Consequently, project managers should have a formal stakeholder management
process that is appropriate for the circumstances of the project. The planning and approach
for stakeholder management will be shared along with the processes and tools that will
create positive relationships with stakeholder by setting objectives and managing their
expectations.

Contents

1. Introduction

2. What is Stakeholder Management?

3. The Stakeholder Management Cycle

Step 1 Identify, Recognize and Acknowledge Stakeholders

Step 2 Analyze Contribution, Commitment and Support

10

Step 3 Develop an Action Plan

12

Step 4 Action the Plan

14

Step 5 Monitor Outcomes and Take Corrective Actions

14

4. Conclusion

16

1. Introduction
As a project manager stakeholder management is a key aspect of the role. Ideally, it is a conscious, planned and
focused activity associated with clear actions and outcomes, but more often than not, it is an unconscious and
unplanned aspect of managing projects on a daily basis. Developing a formalized, documented, repeatable process
for mapping stakeholders and embedding a clear methodology for stakeholder management can yield enormous
benefits to the project and create value for the stakeholders.
Notwithstanding the potential benefits of effective stakeholder management, it is commonly acknowledged that
about 80% of the time is wasted on managing stakeholders. In fact, poor stakeholder management and ineffectual
communication are two of the key reasons why change often fails. Managing stakeholders effectively is not just
about forward momentum, it is also about scale and helping to push and promote change in every corner of the
organization. At TCS, stakeholder management is a key component of organizational change management for this
reason. Effectively managing stakeholders brings business change at the organizational and individual levels to
transition individuals, teams, and organizations from a current state to a desired future state.
Change
Journey

Initial Contact

Awareness

Understanding

Ownership

Commitment

Adoption

Sustain

Focus on
business
impacts and
related actions
on process,
people,
organizations,
and data
Prioritize
business risk
and degree of
change degree

Business
Impact Review

Align
executives and
employees
with project
objectives
Involve
stakeholders
early and
throughout the
project

Stakeholder
Management

Articulate
project
benefits and
reasons
Engage in
leading change
Inform and
involve
employees at
all levels of
project
activities and
new
expectations
resulting from
design

Communication
Management

Identify
changes to
people,
process,
organizations,
and data
Create actions
to address
impacts of
people,
process, and
organization
Develop
actions to
mitigate risks

Change Impact
Review

Prepare for
large scale
organization
and site levels
changes
Ensure the
process,
people, and
organizational
changes are
addressed to
meet budget
and schedule
on time

Organizational
Change Readiness

Involve SMEs
early in process
Train end users
and
management
to operate in
the new way of
working
(process,
organization,
and system) as
well as the new
applications

Learning
Management

Monitor
change
awareness,
understand,
ownership with
stakeholders
and end users
throughout
project
Develop risk
assessment
and prioritize
challenges and
risks

Change
Adoption

Figure 1 TCS Organizational Change Management Components

TCS' framework takes an organizationally holistic approach and provides an infrastructure to support and sustain
change throughout the program's multiple phases while embracing and focusing on the organization's
transformative strategies. Implementing new processes and changing the organizational culture can be
challenging because it requires transforming how people work and interact. The approach includes activities to
minimize the resistance to change by engaging stakeholders in the change program from the outset and securing
their commitment to achieving a successful outcome.

What is Stakeholder Management?

A stakeholder is anyone who has an interest in the project or will be affected by its deliverables or outputs. It is
important to understand the values and issues that stakeholders have in order to address them and keep everyone
on board for the duration of the project.
Stakeholder management is the process of managing the expectation of anyone who has an interest in a project or
will be affected by it and is a key leadership tool. When there is a conscious and structured approached, stakeholder
management secures the ownership and accountability necessary for delivering changes. It is a way of aligning
multiple teams with a single vision and providing a thread of relevance to the strategic aims of the organization.
Stakeholder identification and management is a key skill for all project managers, program managers and executives
(collectively called project managers for the purpose of this paper). It is essential to conduct the initial stakeholder
analysis before the change or transformation begins so that the business leader or project manager can drive positive
outcomes by detecting negativity, resistance or misunderstandings early on and take appropriate action. Stakeholder
analysis can also be helpful when a project changes direction.

The Stakeholder Management Cycle

Stakeholder management plans operate at many different levels across any organization, from peak executive
bodies to individual streams of projects. The stakeholder management cycle, which leads
to the identification of stakeholders and the development of a stakeholder management plan, can be applied at
each level in the same manner. The stakeholder management cycle consists of the five steps
as shown in Figure 2.

Step 1
Identify, recognize
and acknowledge
stakeholders

Step 5
Monitor the
outcomes and
take corrective
actions

Step 2
Analyze
contribution,
commitment and
support

Step 3
Develop an
action plan

Step 4
Action the
plan

Figure 2 Stakeholder Management Cycle

6

Although these steps can be initiated in a logical sequence, they can also occur concurrently and iteratively. The
same steps are then used to review stakeholders and ensure ongoing alignment.

Step 1 Identify, Recognize and Acknowledge Stakeholders

As part of defining a project's requirements, stakeholders are identified and solicited. Stakeholders are those who have
a stake in the project which is someone who is affected by the project or who can affect the project in some way.
Stakeholders come from all parts of the organization, and occasionally from the wider community (vendors, suppliers,
unions, residents, and so on).
When identifying stakeholders, consideration should be given to any interested party. While a project may appear to
have a very large stakeholder group, there will inevitably be a hierarchy that will simplify the identification of
stakeholders. For example, a state-wide system project may appear to include every manager in its stakeholder group.
However, this would be unmanageable, so the group will need to be reduced by identifying the leaders of interest
groups, specifically those influential within the system, and by other project criteria. However, presentations to the
wider group may be required during the project and key stakeholder activities will be targeted throughout the
hierarchy.
Different stakeholders may have commonality of purpose at a very general level. For example, providing quality
services' or 'increasing organizational efficiency, but at more detailed levels they may wish to impose different
purposes and priorities. The level of importance to a stakeholder's' needs and interests is also key to the success of
strategy and project development. A stakeholder must have the right to influence and have importance to the project.

Influence Power of a stakeholder in terms of influencing direction of the project and outcomes

Importance Stakeholders whose problems, needs and interests are a priority for the project

To help identify project stakeholders, a list of all individuals who will have an interest in the outcomes of the project
should be developed. Some ways of identifying key individuals include:

Perform a stakeholder analysis to determine who is and will be impacted by the change

Consider individuals involved in the requirements gathering and scope definition process

Undertake a benefits analysis (who will benefit from the solution?)

Develop a list of standard stakeholders (for example, technical support, business users, SMEs)

Scan employer and employee associations, informal employee group leaders, and so on

Discuss with other project managers and review documentation from similar past projects

Discuss the list with the project sponsor and other stakeholders as the list develops

It is important to understand that individuals and groups behave differently in different situations. The impact
stakeholders can have on organizational policy, strategy, and the project is dependent on their relationship to either
the organization itself or the issues of concern, or both.
There are two forms that can be used to capture details regarding stakeholders Stakeholder Plan and Stakeholder
Map. Both are essential to managing stakeholders effectively and have different purposes and audiences.
7

Stakeholder Plan
A good stakeholder plan identifies the stakeholders, discusses goals, determines work methods and identifies the risks
involved in the project. It is for public use and will often be included in project related documents, such as business
cases or project charters. It will generally be a subset of a larger plan for the division or department.
Plan Elements

Description

Goals

Methods

Risks

Even though the needs of stakeholders may differ, their ultimate goals should be the same and that
is for the project to be successful and profitable:
Interviews can be conducted to discuss issues, if any
Clear and concise goals so that the plan can be organized to meet needs
To achieve the established goals, the stakeholder plan must outline the work methods that will be
used in the project:
Include project cost and due date
List the individuals who will work on the project and any supplies they need
Location of the project and whether any testing must be completed
Alternate method in case the first method cannot work
All risks involved should be listed to help plan mitigation; potential risks include:
Exceeding budgets or overshooting timelines allotted to the project
Communication risks, if stakeholders are not regularly continuously informed of any problems or
delays with the project
Once these risks are identified, mitigations should be determined, logged and continuously updated
during the project

Table 1 Stakeholder Plan Elements

Stakeholders have a vested interest in the success or failure of a project, and they sometimes find themselves at odds
with each other because they have conflicting ideas of how best to make the project successful. Stakeholder plans can
be a useful device to bring stakeholders together by outlining a common way to meet the project objectives.
Stakeholder Plan Project XXX
Stakeholder

Position

Organization

Ernie Peters

Director

Finance

Helen Walker

Peter Hinds

Niles Marks

Bryon James

Vice President Finance Systems

Union Rep

Super User

Manager

Plant

Accounting

Engineering

Goals

Methods

Risk

Single source

Corporate

Owner of the process

Ensure total IT spend is managed effectively

Standardization

Validate changes

Cost effective

Approve design changes

Cost effective

Corporate

Sponsor and champion of the IT governance

process

Shared data

Approve design
changes

Provide director and make business

decisions relating to IT spend

standardization

Plant

Failure to communicate may impact change

adoption

Review changes

Corporate

Heavy workload around month-end

Failure to communicate may impact change

ad

Single source

Tester

Shared data

Plant

Single source

SME

Figure 3 Stakeholder Plan

Stakeholder Map
A stakeholder map (Figure 5) provides a visual representation of the various stakeholders (individual and groups),
their level of interest and their importance to the project. It is for the personal use of the project manager and the
management team. It is used to identify the level of support currently being received by stakeholders and to map
actions to maintain or increase that support.

Step 2 Analyze Contribution, Commitment and Support

A good stakeholder management strategy is required to effectively manage stakeholders. It should identify and
document the approach to take to increase support and decrease negative impacts of stakeholders throughout the
life of the project. The three key areas for analysis are contribution, commitment and support which is leveraged in
the stakeholder map and used extensively to guide stakeholder management.
Stakeholder Analysis Project XXX
Stakeholder

Position

Organization

Primary Relationship

Influence

Ernie Campbell

Director

Finance

Bill Smith

Medium

Helen Burke

Peter Barker

Vice President

Union Rep

Finance Systems

Plant

Bill Smith

Tom Hughes

High

Medium

Bryon Wilkes
Niles Forman

Bryon Wilkes

Super User

Manager

Accounting

Engineering

Ernie Campbell

Tom Hughes

High

Low

Interests

Owner of the process

Ensure total IT spend is managed

effectively

Sponsor and champion of the IT

governance process

Provide director and make business

decisions relating to IT spend

Knowledgeable about processes

Build effective relationship

Sub-process owner

Strong function and technical

experience

Downstream impact and needs to be

consulted

Figure 4 Stakeholder Analysis

Contribution
There are a number of factors that determine the extent to which a stakeholder is required to contribute to
a project to ensure its success. These factors include the stakeholder's position and authority within the
organization, the degree to which the project relies upon the particular stakeholder to provide a product or
service, the level of 'social' influence of the individual and the degree to which the individual is familiar

10

with specific aspects of the business. Each of these factors can be analyzed in more detail during stakeholder
analysis. The outcome is summarized into a contribution index, which has the following values:
Values

Description

Critical

Desirable

Non-essential

The stakeholder has the power to make or prevent the project from succeeding
The project can be completed even without an active contribution from the stakeholder, but this
would have a serious impact on the quality, elapsed time and cost of execution
The stakeholder is able to act as an advocate for the project to peers
Although the stakeholder can contribute to the project, this contribution is either not essential or
can be more easily obtained from other stakeholders
An individual with a contribution index below 'Non-essential' is not a stakeholder

Table 2 Stakeholder Contribution Values

Commitment
Each stakeholder will display a different level of commitment to the project, even throughout the life of the project.
The range of commitment to a project is represented by the following values:
Values

Description

Committed
(make it happen)

Supportive

(help it happen)

Neutral
(let it happen)

Disagrees
(stop it from happening)

The stakeholder has committed to contributing to the project, preferably in writing, and is available
to do so
The commitment may be documented in the form of an agreed plan, or other forms of written
communication (e-mail, memo, letter, contract, statement of intent) describing what will be
provided and by when
The stakeholder is well informed, sees value in what is being done, understands his or her
contribution and is willing to provide it, although no formal commitment has been made
The stakeholder may or may not be informed about the project and while they do not disagree,
they are not actively involved in any capacity, or may be indifferent about the project objectives
and outcomes
The stakeholder may or may not be informed, but does not see value in the project and the work
being performed
He or she would rather not be involved and in fact would prefer the work not to be carried out at all

Table 3 Stakeholder Commitment Values

Stakeholder Map Project XXX

Contribution

Commitment
CRITICAL
DESIRABLE

Ernie
Peter

Helen
Niles

Byron

NON-ESSENTIAL
DISAGREES

NEUTRAL

SUPPORTIVE

COMMITTED

Figure 5 Stakeholder Map

11

Support
Review each stakeholder and determine what their current level of contribution and commitment are, and enter their
name on the stakeholder map. The next step is to identify where each stakeholder 'needs' to be to ensure an
adequate level of contribution and commitment towards the project. This will reflect the ideal or target scenario for
the project. Enter each stakeholder's name onto the map in the target position. If the stakeholders target is further
right or upwards draw an arrow from current to target. If the stakeholder is currently in the ideal position, simply
circle the stakeholder's name.
Stakeholder Target Map Project XXX
Commitment

Contribution

Ernie
CRITICAL

Ernie

Peter
Helen

Peter

DESIRABLE

Niles

Niles

SUPPORTIVE

COMMITTED

Byron

NON-ESSENTIAL
DISAGREES

NEUTRAL

Figure 6 Stakeholder Target Map

Step 3 Develop an Action Plan

A stakeholder analysis is used by business leaders and project managers to identify the key influencers associated
with a particular project or program then assess their attitude, level of interest and the importance they attach to it.
This knowledge helps the program to interact in the most effective way with stakeholders, particularly in planning
optimal pro-active communication
The identification of any obstacles to the full contribution and commitment of the stakeholders is the first step
towards identifying any activities that may serve to remove these obstacles. Therefore, it is a good practice to identify
any such obstacles during stakeholder analysis so that they can be taken into account when planning. Obstacles
could include items such as:

Lack of knowledge and information

Insufficient engagement during planning and decision-making

Not yet been requested to participate

Already committed to another project or responsibility and therefore not available

12

Cannot be made available due to expected location and duration

Does not agree with the changes proposed, sees the changes as a potential threat

Does not have the requisite level of authority to be able to contribute effectively

Does not have the requisite skills to be able to contribute effectively

Conflict with other stakeholders

Is an external provider and no formal agreement has yet been put in place

Potential doubts about the capability, stability or availability of an external supplier, consultant or contractor

Based on the positioning of stakeholders on the stakeholder map and the obstacles that have been identified,
appropriate activities can be listed and included in an action plan. The main purpose of these activities is to remove
the obstacles and influence stakeholders towards the desired state, rather than necessarily all the way to the
committed level. For example, it may be preferential to have the Vice President, Director and the selected software
vendor 'Committed'. On the other hand, a business unit leader could be encouraged to be 'Supportive' to actively
promote the project rather than ignore the project (Neutral). The level of effort expended on each stakeholder
should be enough to move them to the desired state, and then maintain that state throughout the project. In
addition, increasing and maintaining the contribution of stakeholders that are already in agreement or committed
also increases the likelihood of a successful project.
Special care needs to be taken when dealing with 'Critical' and 'Desirable' stakeholders that are in disagreement. If it
is not possible to obtain their commitment, it becomes necessary to reduce the project's dependence on their
contribution by moving them from 'Critical' or 'Desirable' to 'Non-essential'. In dealing with disagreement, employ
good skills in listening, understanding and acknowledging issues and concerns. The action plan can be used to
identify the actions that need to be taken to increase stakeholders' commitment to the project.

13

Step 4 Action the Plan

The stakeholder action plan is derived from the stakeholder analysis. The plan moves stakeholders into stronger
positions of support by putting the planned activities into action. It can include:

Communicating with stakeholders and keeping them informed of matters that are likely to be of interest to them

Obtaining information from stakeholders that will be relevant to the project

Managing the expectations of stakeholders

Involving stakeholders in all key decisions about the project

Stakeholder Action Plan Project XXX
Stakeholder

Current Level

Target Level

Primary
Relationship

Ernie

Critical

Critical Committed

Bill

Neutral

Helen

Peter

Critical
Committed

Desirable

Critical Committed

Critical Committed

Bill

Ian

Disagrees

Niles

Byron

Desirable

Desirable

Supportive

Committed

Non-essential
Neutral

Non-essential
Neutral

Bill

Peter

Actions

Weekly Meeting one-on-one.

Invite to weekly project briefings.

Attends status and steering committee.

Ian to meet monthly prior to steering comm.

Ask for commitment to fill Acting Chair role when Helen is away.

Weekly meeting one-on-one.

Hold informal Phase 2 discussions when Paul is in town.

Arrange vendor site visit for January.

Discuss inclusion in weekly status meetings (confirm with Helen first).

Provide industry scan documents to show reasoning for decisions todate.

Increase one-on-one meetings from monthly to fortnightly.

Fortnightly one-on-one meetings to discuss project status.

Understand role and duration.

Understand power base.

Discuss role of Union Consultative Committee in future planning

sessions.

Invite as observer.

Suggest coffee after next status meeting.

Figure 7 Stakeholder Action Plan

Step 5 Monitor Outcomes and Take Corrective Actions

The purpose of this step is to periodically re-assess the position of each stakeholder to determine what further action
(if any) is required to maintain stakeholder commitment and support to the project. It essentially requires a review of
the previous four steps to determine whether there are any new stakeholders, where they are positioned in terms of
their commitment and influence and what action needs to be taken in relation to them. A similar review of existing
stakeholders should also be conducted to determine whether any variations to the stakeholder management plan
are required.
14

How well stakeholders are managed is critical to achieve project outcomes. Most of the focus is generally spent on
the frontend analysis with little or no consideration for the performance management. Stakeholder feedback can be
deployed for evaluating stakeholder management to determine what adjustments are needed to get back on track.
A tool should be created to reflect significant and/or overlooked aspects to managing key stakeholders.
Objectives

Description

Set the context

Be explicitto a point

Allow, but track detailed

design feedback separately

Provide general instructions

and examples
Make providing feedback easy

Clarifying the current stage of the process and the type of feedback that is most
appropriate
A simple diagram can be helpful in explaining what is appropriate for the current stage
and provides a preview of the types of stakeholder feedback that will be most
appropriate at later phases
Ask questions or list areas for feedback
Guide stakeholders to providing feedback on the highest-priority issues that need
consensus
It is important to give stakeholders an outlet for documenting details that are important
to them, so they can then move on and look at other elements
Give stakeholders explicit instructions when asking for feedback
Instructions should be brief and to the point, generic enough to avoid bias, and include
examples where possible
Stakeholders' time is valuable so consult and get feedback from stakeholders as
efficiently as possible

Table 4 Stakeholder Feedback Objectives

The feedback tool should not be long and excessively detailed so that stakeholders will take the time and interest in
providing timely and accurate feedback. Some tools available are:
Description

Objectives

Survey Form

Online Service

Email

Report Card

Provide very explicit instructions, ask clear questions, collect feedback in a very consistent manner,
and consolidate comments easily, avoiding collections of comments scattered across various email
threads
One drawback is that this does take a bit of setup and may not be convenient for stakeholders
Several online tools allow interactive commenting, provide version control, and offer a central place
for various stakeholders to view consolidated comments
There are a number of different tools to choose from, offering various features and functions.
This is what stakeholders use most often, and it is likely the most convenient option for them
A simple, concise email message asking key questions and providing clear instructions goes a long
way toward avoiding the problems that might be encountered
High level assessment of the feedback with action status
Used to track of the execution of activities to monitor the consequences arising from these actions
Can be combined over time to show progression

Table 5 Stakeholder Feedback Tools

15

Conclusion
Stakeholders are individuals who represent specific interest groups affected by the outcome and performance of a
project or program. Project managers are accountable for the end-to-end management of their projects, including
performance and expectation management of individuals who may be outside their direct control.
Stakeholder management, ideally, should be a conscious, planned and focused activity associated with clear
actions and outcomes, but more often than not, it is an unconscious and unplanned aspect of managing projects
day-to-day. Developing a formalized, documented, repeatable process for mapping stakeholders and embedding a
clear methodology for stakeholder management can yield enormous benefit.
Stakeholder management brings classic returns in terms of time, money and motivation. The bottom line is that
every minute invested in driving effective stakeholder management will bring in significant business benefits. In
practical terms stakeholder management keeps decision-makers and influencers engaged and on-track which is
the pathway for a successful project.

16

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17

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