Why identification of stakeholders is important in project management?

Stakeholder term referred to any individual, group of persons or company who are actively involved in project or whose interests may be positively or negatively affected with result of the project or activity performed by a project.

Stakeholders mainly depend upon the nature of the project, main job of the project manager is not only identifying the potential stakeholders of the project but should also ménage the influence of stakeholders to ensure positive outcome.

Stakeholder may include project team, customer, sponsor, PMO, operations, customer care, Support team, sellers, legal department, functional managers, program and portfolio managers, interested entities internal or external to the project.

 

 Stakeholders may have varying levels of responsibility and authority over a project these responsibilities or authorities may have changed during life cycle of project and ends up in closing project.

Different stakeholders may have different level of influence or involvement during project life cycle ranges from occasional to frequent, stakeholders may have different expectation from project which may cause sometime conflict between stakeholders, these conflicts should resolved in fever of client or customers.

Stakeholder cab be classify in three different categories

Primary stakeholders

Primary stakeholders are individuals or groups of peoples who will directly affected, positively or negatively by the outcome of the project; for example project team, accounts or employees of the company are considered primary stakeholders for the project of redevelopment of payroll system, it is necessary to identify primary stakeholders during initiating and planning process and managed their requirements and expectations in stakeholder management plan.

 

Secondary stakeholders

Secondary stakeholders are individuals or groups of peoples who will indirectly affect, either positively or negatively with the outcome of the project.
For example, local community might be considered as Secondary stakeholders for building a railway track or bridge in their area.

Key stakeholders

Key stakeholders are those who might be positively or negatively affected by project or an effort of project or outcome of a project, key stakeholder may belongs to primary or secondary stakeholders and have strong influence over project, a Project sponsor, a CEO or director of HR would be key stakeholder of payroll project, another example of key stakeholders are operational staff that carryout the work of effort at product of the project, If they don’t believe in what they are doing or don’t do it properly might leads to destroy the outcome of the project. Account staffs that are going to enter records or use payroll system are also an example of key stakeholders.

Legislators, local bodies’ members, state federal agencies, Government officials and policy makers are also considered as key stakeholders in a project or outcome of a project where public interest may have directly or indirectly affected with project.

Now a day’s Media also become key stakeholder for any project initiated for public interest or where public interested might be effected positively or negatively affected with the outcome of a project.

Find stakeholder as early as possible

Ideally, it’s good to involve stakeholders during project selection process,   although this is not always possible and sometimes it becomes impossible to involved all project stakeholders during project selection process as if we ask same question to 10 different peoples may have 10 different answers as per their interest and requirements, for such cases PMBOK recommends to involve selected stakeholders based upon their expertise and experience.

Identification of stakeholder is a continuous process throughout the project life cycle; however project team is responsible to identify all possible key stakeholders at early stages of project and involved in project planning phase, project may encounter a big failure if project team will not buy-in key stakeholders at early stages. Let me explain with an example,

Few years back a construction of high rise tower was halted when it reached to 20th floor. Airport security forces visited site office and instructed to stop the project as the building would occupy the air track for air planes. 

It was really a big blunder of project team as they didn’t spend proper time to identify primary stakeholders for their project. This shows that finding key stakeholders and gain buy-in is inescapable for successful accomplishment of any project.

The most important reason to identify stakeholders in early stages of project is to allow them to become an effective part of effort, effective participation of stakeholders may help bring more ideas on table and will include different prospective from different stakeholders.

Stakeholders effective participating will also help project team to gain buy-in and support of stakeholders by making them an important part of planning and execution process, this also help project team to bring all stakeholders on a table where concerns can be addressed and resolved.

This practice will also help increase trust of project team and strengthen the position of project team which will definitely increase the chances of project success.

 

Determine stakeholder’s requirements and expectation

This is important to obtain as many requirements as possible before starting execution phase, this is not a simple or easy job, however it is essentials to determines as many requirements as possible, it is better for the situation where project manager visits PMO office during execution phase and ask the manager that “I didn’t knew that Mr. Simon was a stakeholder of this project, I need to extend project schedule or need extra funds to accommodate his requirements or may need to cut the requirements of Mr. Philip who submitted his requirement during planning process”.

Most of the time requirements are so ambiguous that even project stakeholders doesn’t exactly knows their requirement s about the project, however various requirement gathering techniques might be helpful in such situation like Delphi, questionnaires or prototyping.

Stakeholder’s expectations are more ambiguous then their requirements, these expectations may include “me or my department work will not effect after completion of project.” Or stakeholder may expect project results will dramatically impact entire process of company.

Stakeholder’s interest and influence on a project

This is again an important concept to understand, stakeholders may have different interest and influence on a project, influence may be defines as “their positively or negatively impacts on a project”, some stakeholders may have greater interest in project but may have less influence and vice versa, PMBOK classify this situation in influence and interest grid and recommend project managers to follow as mentioned in below image.

There could be so many interests of stakeholders and varied from each other, Economical, social, public health and safety, environment, physical health are some of example of stakeholders interests.

Stakeholders who have low interest and influence should monitor with minimum efforts while stakeholders with maximum interest and influence should be managed closely with maximum efforts.

Keep those stakeholders satisfied who have low interest and high influence in a project and stakeholders with low influence and higher interest should be informed about the project status on regular basis.

How to identify and address stakeholders’ interests

This is a critical concept to understand and required project team to think beyond, it might be easy to identify beneficiaries or key stakeholder of the project or an activity of the project however, it might be harder to see and address the concerns of secondary stakeholders.
There might be numbers of ways to identify stakeholders and can be use more than one to have best results

Brainstorm

Meet with the peoples in organization and other already involved in project, informed about the project and as per their output start categorizes them in primary and key stakeholders and collect their ideas and start writing with the reference of categorize.

 

Consult with PMO and obtain lesson learned

Consult with project management office and try obtaining historical records of similar projects, this will cut down entire effort to half.

 

Get ideas from identified stakeholders about potential stakeholders

Project team can ask from identified stakeholders about potential stakeholder from

 

Advertise, (if possible)

Combination of media can also use to determine list of potential stakeholders, participation in community meetings, organizational newsletters, and social media, announcement of project sponsor in a meeting, targeted emails and attending religious gathering might be a helpful activity to find peoples who consider themselves as project stakeholders.

Above activities might produce big list of stakeholders, now it’s time to shorten this list by asking below mentioned question for each identified stakeholder?

1. Does this stakeholder have a fundamental impact on a project?
2. Can we clearly identify stakeholder’s requirement and interest?
3. What will impact at project if this stakeholder will replace?
4. Will the project survive without this stakeholder?
5. Is this stakeholder already identified through another relationship?

As discuss above identification of stakeholder is continue process; however with above techniques it will be easy for project team to list down stakeholders in stakeholder register and categorized as per their influence and interest.

Identification of stakeholder is done, next step to ménage stakeholders, this topic will discuss in next article.