UNIT NINE: PROJECT STAKEHOLDER MANAGEMENT

9.1 Stakeholder Management Overview

Who are Stakeholders?

Stakeholders are individuals who get impacted by the project. A Stakeholder can be a supporter
and a resistor. Stakeholders are individuals who either care about or have a vested interest in
your project. They are the people who are actively involved with the work of the project or have
something to either gain or lose as a result of the project. 

 Top Management

Top management may include the president of the company, vice-presidents, directors, division
managers, the corporate operating committee, and others. These people direct the strategy and
development of the organization.

On the plus side, you are likely to have top management support, which means it will be easier to
recruit the best staff to carry out the project, and acquire needed material and resources; also
visibility can enhance a project manager’s professional standing in the company.

On the minus side, failure can be quite dramatic and visible to all, and if the project is large and
expensive (most are), the cost of failure will be more substantial than for a smaller, less visible
project.

Some suggestions in dealing with top management are:

 Develop in-depth plans and major milestones that must be approved by top management
during the planning and design phases of the project.
 Ask top management associated with your project for their information reporting needs
and frequency.
 Develop a status reporting methodology to be distributed on a scheduled basis.
 Keep them informed of project risks and potential impacts at all times.

 The Project Team

The project team is made up of those people dedicated to the project or borrowed on a part-time
basis. As project manager, you need to provide leadership, direction, and above all, the support
to team members as they go about accomplishing their tasks. Working closely with the team to
solve problems can help you learn from the team and build rapport. Showing your support for the
project team and for each member will help you get their support and cooperation.

Here are some difficulties you may encounter in dealing with project team members:

 Because project team members are borrowed and they don’t report to you, their priorities
may be elsewhere.
 They may be juggling many projects as well as their full-time job and have difficulty
meeting deadlines.
 Personality conflicts may arise. These may be caused by differences in social style or
values or they may be the result of some bad experience when people worked together in
the past.
 You may find out about missed deadlines when it is too late to recover.
Managing project team members requires interpersonal skills. Here are some suggestions that
can help:

 Involve team members in project planning.

 Arrange to meet privately and informally with each team member at several points in the
project, perhaps for lunch or coffee.
 Be available to hear team members’ concerns at any time.
 Encourage team members to pitch in and help others when needed.
 Complete a project performance review for team members.

 Your Manager

Typically, the boss decides what the assignment is and who can work with the project manager
on projects. Keeping your manager informed will help ensure that you get the necessary
resources to complete your project.

If things go wrong on a project, it is nice to have an understanding and supportive boss to go to

bat for you if necessary. By supporting your manager, you will find your manager will support
you more often.

 Find out exactly how your performance will be measured.

 When unclear about directions, ask for clarification.
  Develop a reporting schedule that is acceptable to your boss.
 Communicate frequently.

 Peers

Peers are people who are at the same level in the organization as you and may or may not be on
the project team. These people will also have a vested interest in the product. However, they will
have neither the leadership responsibilities nor the accountability for the success or failure of the
project that you have.

Your relationship with peers can be impeded by:

 Inadequate control over peers

 Political maneuvering or sabotage
 Personality conflicts or technical conflicts
 Envy because your peer may have wanted to lead the project
 Conflicting instructions from your manager and your peer’s manager
Peer support is essential. Because most of us serve our self-interest first, use some investigating,
selling, influencing, and politicking skills here. To ensure you have cooperation and support
from your peers:

 Get the support of your project sponsor or top management to empower you as the
project manager with as much authority as possible. It’s important that the sponsor makes
it clear to the other team members that their cooperation on project activities is expected.
 Confront your peer if you notice a behavior that seems dysfunctional, such as bad-
mouthing the project.
 Be explicit in asking for full support from your peers. Arrange for frequent review
meetings.
 Establish goals and standards of performance for all team members.

 Resource Managers
Because project managers are in the position of borrowing resources, other managers control
their resources. So, their relationships with people are especially important. If their relationship
is good, they may be able to consistently acquire the best staff and the best equipment for their
projects. If relationships aren’t good, they may find themselves not able to get good people or
equipment needed on the project.

 Internal Customers

Internal customers are individuals within the organization who are customers for projects that
meet the needs of internal demands. The customer holds the power to accept or reject your work.
Early in the relationship, the project manager will need to negotiate, clarify, and document
project specifications and deliverables. After the project begins, the project manager must stay
tuned in to the customer’s concerns and issues and keep the customer informed.

Common stumbling blocks when dealing with internal customers include:

 A lack of clarity about precisely what the customer wants

 A lack of documentation for what is wanted
 A lack of knowledge of the customer’s organization and operating characteristics
 Unrealistic deadlines, budgets, or specifications requested by the customer
 Hesitancy of the customer to sign off on the project or accept responsibility for decisions
 Changes in project scope
To meet the needs of the customer, client, or owner, be sure to do the following:

 Learn the client organization’s buzzwords, culture, and business.

 Clarify all project requirements and specifications in a written agreement.
 Specify a change procedure.
 Establish the project manager as the focal point of communications in the project
organization.

 External customer
External customers are the customers when projects could be marketed to outside customers. In
the case of Ford Motor Company, for example, the external customers would be the buyers of the
automobiles. Also, if you are managing a project at your company for Ford Motor Company,
they will be your external customer.

 Government

Project managers working in certain heavily regulated environments (e.g., pharmaceutical,

banking, or military industries) will have to deal with government regulators and departments.
These can include all or some levels of government from municipal, provincial, federal, to
international.

 Contractors, subcontractors, and suppliers

There are times when organizations don’t have the expertise or resources available in-house, and
work is farmed out to contractors or subcontractors. This can be a construction management
foreman, network consultant, electrician, carpenter, architect, or anyone who is not an employee.
Managing contractors or suppliers requires many of the skills needed to manage full-time project
team members.

Any number of problems can arise with contractors or subcontractors:

 Quality of the work

 Cost overruns
 Schedule slippage
Many projects depend on goods provided by outside suppliers. This is true for example of
construction projects where lumber, nails, bricks, and mortar come from outside suppliers. If the
supplied goods are delivered late or are in short supply or of poor quality or if the price is greater
than originally quoted, the project may suffer.

Depending on the project, managing contractor and supplier relationships can consume more
than half of the project manager’s time. It is not purely intuitive; it involves a sophisticated skill
set that includes managing conflicts, negotiating, and other interpersonal skills.
Project Stakeholder Management involves identification of stakeholders, analysis of their
expectations and influences, development of appropriate strategies to work with the stakeholders
and executing the process. Frequent communication is required with the stakeholders. Needs and
expectations of the stakeholders to be understood. Managing conflicting interest and involving
stakeholders in key project decisions and activities are also crucial. All of this forms a part of
the stakeholder management process. The project manager is expected to possess the ability to
identify the needs and influences of the stakeholders to manage them effectively.

9.2 Identify Stakeholders

The process of identifying individuals who are impacted by the project is known as Identify
Stakeholders Process. The project manager will be able to identify the appropriate focus of each
stakeholder as an outcome of Identify Stakeholders process. Stakeholders can include the
customers, sponsors, employees, management, government, and society as well. These
stakeholders have a potential to exert positive or negative influence on the project deliverables.

Stakeholder needs are to be identified at an early stage of the project to ensure that all their
requirements and voices are considered. The stakeholders can be classified on the basis of their
interest in the project, the level of influence on the project outcome and their involvement. For
the success of the project, the project manager needs to have a relationship that is cordial and
extremely success oriented.

 Stakeholders Process can receive inputs from:

 Project Charter: Internal and external parties related to the project are identified using
the project charter.
 Procurement Documents: The parties involved in a procurement contract are key
project stakeholders.
 Enterprise Environmental Factors: Organizational culture, its structure, governmental
regulations, trends, practices or habits of individuals represent enterprise environmental
factors.
 Organizational Process Assets: Stakeholder registers from previous projects, lessons
learned are important inputs for identifying stakeholders.

Stakeholder Analysis
A qualitative and quantitative analysis is required to systematically determine the interest of
stakeholders throughout the project. The benefits of this analysis are:

 Stakeholder interests can be identified

 Stakeholder expectations can be identified
 Another benefit includes identification of stakeholder relationships that can be leveraged
to build partnerships with stakeholders to increase the probability of project success

Steps involved in stakeholder analysis process are:

 Identification of potential stakeholders including their roles, departments, interests,
knowledge, expectations, and influence levels.
 Identify and analyze the potential impact each stakeholder could generate
 Classify the stakeholder's basis logical categories of potential impact
 Determine the likely reaction of these stakeholders to respond in various situations
 Plan the approach strategy to enhance their positive support and reduce negative
influences

Multiple classification models are used for stakeholder analysis, but not limited to:
 Power/Interest grid: Bifurcation of stakeholders based on their level of authority and
their level of concern regarding project outcomes.
 Power/Influence grid: Bifurcation of stakeholders based on their level of authority and
their level of involvement in the project.
 Power/Impact grid: Bifurcation of stakeholders based on their level of authority and
their level of impacting changes on project activities.
 Salience model: This model describes categories of stakeholders based on their power,
urgency, and legitimacy.
 Outputs of Identifying Stakeholders:
Stakeholder register is updated with details such as:
 Stakeholder information
 Includes their name, organizational position, location, role in the project, business phone
number, email address, etc.
 Stakeholder requirements
  Key expectations, major requirements, involvement in the project etc.
 Stakeholder Classification

9.3 Plan Stakeholder Engagement

Plan Stakeholder Management process involves managing stakeholder expectations which

influence throughout the lifecycle of the project. This process provides a plan to interact
effectively with stakeholders and support projects interest. Project Managers goal is to plan these
actions well that they impact the contribution of stakeholders on projects, manage their
expectations and also achieve project objectives.

 Inputs for Plan Stakeholder Management

The inputs required to plan stakeholder management include:
Project Management Plan: This Plan describes the processes which can be applied at each
stage of the project, contains the description of how work will be executed, planning and
execution of human resources, change management procedure.

 Stakeholder Register: It provides the description of the interest, involvement, and level
of authority of different stakeholders.
 Enterprise Environmental Factors: Organizational culture, structure, political climate
is critical to managing stakeholders’ expectations.
 Organizational Process Assets: Lessons learned from previous projects and historical
information of the organization helps in understanding the behavior of stakeholders and
thus planning the actions effectively.

 Outputs of Plan Stakeholder Management

Plan Stakeholder Management is a component of the Project Management Plan. The plan
articulates management strategies to engage stakeholders for the project. Unlike procurement
management, the stakeholder management plan can be formal or informal, it can be detailed to
the minutest level or it can just be at a higher level, it is based on the needs of the project. When
updating the stakeholder management plan, the validity of underlying assumptions will be
reviewed to ensure the accuracy and relevancy. Another output of Plan Stakeholder Management
are the updates to project documents that include project schedule and stakeholder register.
9.4 Manage Stakeholder Engagement

The key benefit of Manage Stakeholder Engagement process involves seeking extended support
from stakeholders for the project’s success. This process of communicating and working with
stakeholders to meet their needs / expectations, address issues as they occur and build
appropriate stakeholder engagement in project activities throughout the life-cycle of the project
is termed as Management Stakeholder Engagement process.

Activities involved in Manage Stakeholder Engagement process are:

 Ensure commitment of stakeholders at all stages of the project
 Ensure stakeholder expectations are met. The tools used could be negotiations and
communication
 Anticipate future problems and address potential concerns throughout the life-cycle of the
project
A few critical points of Manage Stakeholder Engagement include:
 Stakeholder influences are the highest at the start of the project and as the project
progresses the influences continue to reduce
 Project sponsors assistance to be taken by the project manager whenever required

 Inputs to Manage Stakeholder Engagement

It includes Stakeholder Management Plan, Communications Management Plan, Change-log and
Organizational Process Assets. The communications management plan includes a documentation
of stakeholders needs for communication requirements. Every stakeholder needs information for
a specific purpose and thus, the formats, level of detail, content and language might need some
alteration from stakeholder to stakeholder. All of this need to be taken into consideration as
inputs when Managing Stakeholder Engagement.

Tools and techniques used to Manage Stakeholder Engagement include effective communication
methods such as the use of email, meetings, process updates through the intranet, war rooms,
among others. Project manager uses effective interpersonal skills including active listening,
building trust, resolving conflict and overcoming resistance to change. Like interpersonal skills,
the project manager also requires Management Skills such as effective facilitation of consensus
towards achieving project objectives, influencing people to support the project, negotiate
agreements to satisfy project needs and help modify organizational behavior to accept project
outcomes.

 Outputs of Manage Stakeholder Engagement

Issue Logs, Change Requests, Project Management Plan Updates and Project Document Updates
are common outputs. Organizational Process Assets get updated with additional information like:

1. Stakeholder notification: It is important to notify stakeholders about project updates, any

issue closures, etc.

2. Project reports: Project reports such as status dashboards, lessons learned, issue logs, etc. are
to be included.

3. Project presentations: Presentations made formally or informally also form as outputs of

manage stakeholder engagement.

4. Project records: It includes correspondence, memos, meeting minutes, etc. are included in

project records.

9.5 Monitor Stakeholder Engagement

“Monitor Stakeholder Engagement is the process of monitoring project stakeholder relationships

and tailoring strategies for engaging stakeholders through modification of engagement strategies
and plans. The key benefit of this process is that it maintains or increases the efficiency and
effectiveness of stakeholder engagement activities as the project evolves and its environment
changes. This process is performed throughout the project.

 Monitor Stakeholder Engagement: Inputs

1. Project management plan: Project management plan components include:

 Resource management plan: To identify the methods for team member
management.
 Communications management plan: This describes the plans and strategies for
communication to the project’s stakeholders.
  Stakeholder engagement plan: Defines the plan for managing stakeholder needs and
expectations.

2. Project documents: Project documents that can be considered as inputs for this process
include:
 Issue log.
 Lessons learned register.
 Project communications.
These include the project communications that have been distributed to stakeholders as
defined in the communications management plan and the stakeholder engagement plan.

 Risk register.
 Stakeholder register.
3. Work performance data: Work performance data contains data on project statuses such as
which stakeholders are supportive of the project, and their level and type of engagement.

4. Enterprise environmental factors: The enterprise environmental factors that can influence
the Monitor Stakeholder Engagement process include:
 Organizational culture, political climate, and governance framework;
 Personnel administration policies;
 Stakeholder risk thresholds;
 Established communication channels;
 Global, regional, or local trends, practices, or habits; and.
 Geographic distribution of facilities and resources.
5. Organizational process assets: The organizational process assets that can influence the
Monitor Stakeholder Engagement process include:

 Corporate policies and procedures for social media, ethics, and security;
 Corporate policies and procedures for the issue, risk, change, and data management;
 Organizational communication requirement;
 Standardized guidelines for development, exchange, storage, and retrieval of
information; and.
 Historical information from previous projects.
 Monitor Stakeholder Engagement: Tools and Techniques

1. Data analysis: Data analysis techniques that can be used for this process include:
 Alternatives analysis: Alternatives analysis can be used to evaluate options to
respond to variances in the desired results of stakeholder engagement.
 Root cause analysis: A root cause analysis can be used to determine the basic
underlying reason that stakeholder engagement is not having the planned effect.
 Stakeholder analysis: The stakeholder analysis helps to determine the position of
stakeholder groups and individuals at any particular time in the project.
2. Decision making: Decision-making techniques that can be used for this process include:
 Multicriteria decision analysis: Criteria for successful stakeholder engagements are
prioritized and weighted to identify the most appropriate choice.
 Voting: Voting can be used to select the best response for a variance in stakeholder
engagement.
3. Data representation: A data representation technique used in this process includes but is not
limited to a stakeholder engagement assessment matrix.

The stakeholder engagement assessment matrix monitors stakeholder engagement

through tracking changes in the level of engagement for each stakeholder.

4. Communication skills: Communication techniques that can be used in this process include:
 Feedback: Feedback is used to ensure that the information to stakeholders is received
and understood.
 Presentations: Presentations provide clear information to stakeholders.
5. Interpersonal and team skills: Interpersonal skills to that can be used for this process
include:
 Active listening: Active listening is used to reduce misunderstandings and other
miscommunication.
 Cultural awareness: Cultural awareness and cultural sensitivity help the project
manager to plan communications based on the cultural differences and requirements
of stakeholder sand team members.
  Leadership: Successful stakeholder engagement requires strong leadership skills to
communicate the vision and inspire stakeholders to support the work and outcomes of
the project.
 Networking: Networking ensures access to information about levels of engagement
of stakeholders.
 Political awareness: Political awareness is used to understand the strategies of the
organization, understand who wields power and influence in this arena, and to
develop an ability to communicate with these stakeholders.
6. Meetings: Types of meetings include status meetings, standup meetings, retrospectives, and
any other meetings as agreed upon in the stakeholder engagement plan to monitor and assess
stakeholder engagement levels.

 Meetings are no longer limited by face-to-face or voice-to-voice interactions.

 While face-to-face interactions are ideal, they can be expensive.
 Teleconferencing and technology bridge the gap and provide numerous ways to
connect and conduct a meeting.
 Monitor Stakeholder Engagement: Outputs

1. Work performance information: Work performance information includes information

about the status of stakeholder engagement, such as the level of current project support and
compared to the desired levels of engagement as defined in the stakeholder engagement
assessment matrix, stakeholder cube, or another tool.

2. Change requests: A change request may include corrective and preventive actions to
improve the current level of stakeholder engagement. Change requests are processed for
review and disposition through the Perform Integrated Change Control process.

3. Project management plan updates: Any change to the project management plan goes
through the organization’s change control process via a change request.
Components of the project management plan that may require a change request include:
 Resource management plan: Team responsibilities for stakeholder engagement
activities may need to be updated.
  Communications management plan: The project’s communication strategies may
need to be updated.
 Stakeholder engagement plan: Information about the project’s stakeholder
community may need to be updated.

4. Project documents updates: Project documents that may be updated as a result of carrying
out this process include:

 Issue log.
 Lessons learned register.
 Risk register.
 Stakeholder register.