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This is the first of a four part series of managing the stakeholders. The word stakeholder is very popular topic today and is a subject of heated discussions in the project management community. In this article we will explore the concept of stakeholder management, address some key issues and recommend practical activities for dealing with stakeholders on a project. This four part series consists of the following installments:

• Part 1 – Overview of Stakeholder Mgt/What is a stakeholder/ How to identify them
• Part 2 – How to analyze your stakeholders
• Part 3 – Know what’s in it for each stakeholder – “Who has the power to kill your project?”
• Part 4 – Stakeholder Management – The Good, the Bad and the Ugly

The focus of this first in the series of articles will be an overview of stakeholder management and the concept of stakeholder identification. Additionally, we will introduce four stakeholder personas and elaborate on them in relationship to the stakeholder management and stakeholder identification. The personas will represent a sample of the wide range of stakeholders a project manager might encounter on their projects.

We will embark on a journey to study and understand stakeholder management for the purpose of improving the chances of success of the projects we are involved in. I have adopted the following model, as shown in Figure 1, from Dr. Harold Kerzner.

Figure 1 – Stakeholder Management System

This model will serve as the basis of our discussion in this series and is used to derive our hypothesis which we will describe.

Our main hypothesis is:

“If we manage our stakeholders correctly we can improve the project’s chances of success, and if we fail to manage our stakeholder our project may fail. “

Let’s review some definition of stakeholders. The definition for a stakeholder from the fourth edition of the PMBOK ® Guide is

“A person or organization (e.g., customer, sponsor, performing organization, or the public) that is actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project. A stakeholder may also exert influence over the project and its deliverables.” page 442.

Recall the definition of a project? From the classical definition of a project, “it is a one time, unique set of task used to create a deliverable for a customer.” A very narrow definition of a stakeholder is a customer who is the recipient of the deliverable of the project.

Hence, we must expand our definition of a stakeholder to include the sponsor and all the members of the project team. So in a project environment, we should expand our definition of a stakeholder to be anyone who is impacted by the effects, results and outcomes of the project.

Why is it important to expand the definition of a stakeholder? It is only by defining and understanding and managing all stakeholders that we can mitigate the risk of the chances of a project failure.

As a project manager, you strive to develop a high performance team around you. You spend time in selecting the team members, developing, managing, coordinating, and monitoring all the members of your team. You manage the supportive ones and the problem ones as well. All stakeholders need to be considered and identified, even though some stakeholders may be observers rather than active stakeholders. By getting the stakeholders involved, knowing who they are and communicating with them on a regular basis, we can increase our potential for a successful project.

Not all stakeholders are created equal. Some stakeholder may be very supportive of the project. These are the ones that we must communicate with on a regular basis. Some stakeholders are silent but still have the power to cancel the project. We may not engage the silent stakeholders as much as others during the life of the project. Some stakeholders may be outright antagonistic to the project! We need to work with this type of stakeholder and try to win them over. And some stakeholders may be invisible. An invisible stakeholder is very dangerous and may be detrimental to the project outcome. By identifying all stakeholders, the project manager can lessen the chances of being blind sided.

A stakeholder management system framework can be used to assist in providing the best practices in managing our stakeholders: The Good, The Bad and the Borderlined.

Stakeholder Identification

The fourth edition of the PMBOK® Guide describes the typical stakeholders that are potentially involved during the life of the project. These stakeholders are:

Project Stakeholders
Program Manager
Portfolio Manager
Project Management Office
Sponsor
Operations Management
Functional Manager
Customer/Users
Sellers/Business Partners
Project Management Team
Project Manager
Other Project management team members

Use this list as a starting point for proper identification of stakeholders. Later you will expand this list to capture other stakeholders for the project.

Once we have identified the stakeholders, what is the next step?

Let’s make this a little more specific and take a look at a set of hypothetical team members working on an IT infrastructure for XYZ Company. In this example, we have Aaron the Auditor, Anne the Attorney, Pete the Programmer and Mike the Manager. What do we know about them? How well do we know them and what are their concerns?

For this article, we will say that all of these people are stakeholders for the project and will in some way be involved or affected by its outcome. Pete is on the project team full time and is working on the back office software to support the new system. Anne is indirectly involved and her job is to monitor the project to ensure that the contractual obligations of the projects are being met. Mike is the main customer and he would like this project completed as soon as possible. Aaron is internal audit department and is responsible for auditing new projects as a part of a TQM initiative. Aaron is assigned to work on this project part time.


These are only a few stakeholders that we have identified in the early stages of the project. However, there are many more stakeholders that we may know or may not know that have not been identified. We have an initial idea of the roles of each of the stakeholders identified here; however, there is more that we need to know about each of them.

To continue in our stakeholder identification, we need to conduct formal stakeholder identification. What is a formal stakeholder identification process? It is a deliberate set of activities that are explicit and the results are documented.

Here are a few techniques to aid you in this task. Each of these techniques can be done individually or as a group.

Recommended alternatives to ID Stakeholders

1. Conduct a brainstorm session with the initial project team
2. Review the organization chart
3. Ask the sponsor for a list of stakeholders
4. Get references from other stakeholders in every elicitation event
5. Conduct a survey of the organization

The main purpose of this first step, which is a key step, is to get a complete list of everybody who will be impacted by the project and/or project results because we do not want to leave any leaf unturned at this point. It is recommended that this process continue throughout the life of the project. Set a goal to get at least 80% stakeholders identified in the early stages of the project.

Summary
.
Stakeholder management planning should be at the top of the list of things to do in the early phases of a project. The result and outcome of the stakeholder management plan should be the input to the Scope Management Plan, Communication Management Plan, Time Management Plan and the Human Resource Management Plan.

The first step in the stakeholder management system is to identify the stakeholders.

Another definition of a stakeholder by Dr. Kerzner is as follows: “Stakeholders are individuals or groups that may have a direct or indirect interest in the project and can be affected by the deliverables or ultimate value. Stakeholder management is the process of managing the expectations of the stakeholders without sacrificing your company’s mission or vision.”

When the process of Stakeholder identification is completed we can prepare to start the next step, which is stakeholder analysis. We will cover stakeholder analysis in the next installment article, next month.

© 2010 allPM.com

George Bridges (MS, PMP) is a trainer and senior consultant for the Business Analysis and the Project Management certification programs for International Institute for Learning (IIL). He has an extensive background in systems development and operations research. He has over 30 years of experience analyzing and developing business systems for major global corporations and gathering and producing requirements analysis and solution assessment and validation for manufacturing, telecommunication, Web-based, and financial systems in industry and the nonprofit arena.