Stakeholder management is a key facet of project management — and one of high risks and high rewards. When key individuals and team members are informed and on task, your project runs smoothly. But when those impacted by or have an impact on your project are left out of the loop, your project can quickly fall apart.
Having and executing a sound stakeholder management strategy can drastically improve individual, team, project, and company performance. The following guide to stakeholder management can help ensure your approach to engaging and communicating with those involved in your project is successful.
Stakeholder management is a project management process for engaging with any individuals, team members, functional groups, or internal and external parties who may be impacted by or have an impact on the outcome of your project. These stakeholders might include, for example, for a digital marketing project: your project sponsor, marketing team members, customers, search engine optimization experts, and external software vendors.
Although “stakeholder management” is a formal term used in project management, the term doesn’t capture the full essence of this role. Stakeholder management has more to do with mentoring, influencing, and communicating with stakeholders than it does with “managing” them.
Well-executed stakeholder management offers numerous benefits. Here are just a few.
Benefits of stakeholder management
Before jumping into the steps of how to develop a stakeholder management plan, it’s important to know some of the benefits. A well-executed stakeholder management plan can help increase engagement, clarity, performance, and reduce project risks overall.
1. Increased role clarity and focus
A stakeholder plan helps project managers set realistic expectations for each type of stakeholder in any given project, thereby improving clarity around their roles. This helps improve stakeholder focus and productivity. When stakeholders understand their role and the roles of others, it also increases the chance that your project will remain within scope from the start.
2. Increased engagement
It can be difficult to get stakeholders engaged in projects, especially if they’re already bogged down with daily tasks or have multiple projects to keep on top of. Stakeholders need a reason to be engaged, and this requires a well-thought-out plan that explains how a project will impact them and how it will benefit them in their day-to-day role. It’s only once they have more clarity and focus that they’re more likely to become properly engaged in the entire project’s success.
3. Reduced risk
Increased role clarity and engagement reduces conflict and ultimately risk. One of the biggest challenges throughout the life of a project is how to reduce risks that might jeopardize the success of the project. A clearly developed and executed stakeholder management plan keeps all stakeholders on the same page and better prepared to meet challenges. With each stakeholder working toward the same goals, risks can be more effectively addressed.
Of course, there are other benefits, and once you’ve identified each one as it relates to your project, you can start to develop a stakeholder management strategy.
Stakeholder management plan
There are four key steps to developing a strong stakeholder management plan, beginning with identifying stakeholders, their roles and impact.
1. Identify stakeholders
Conduct a stakeholder analysis to create a list of stakeholders that should be involved in the project. The findings from your analysis should be documented in a stakeholder register and should include the name of the stakeholder, their current role, their role in the project, contact information, and their impact on the project’s success. A useful way of identifying stakeholders can be to use stakeholder analysis tools, which can also help determine various levels of prioritization of stakeholders — i.e., those who are more essential than others.
The register is a baseline that sets the tone for all stakeholder communications going forward throughout the project lifecycle. This vital document explains why each stakeholder was selected and what their purpose is within the scope of the project. Here’s an example of what a stakeholder register might look like.
2. Identify and document each stakeholder’s role and impact
The stakeholders’ register should identify the role and impact of each stakeholder. To complete this information, you need to not only use the information compiled during your stakeholder analysis but also — ideally — meet with each stakeholder to determine what interest they have in the project as well as their influence on the project.
3. Prioritize stakeholders
After conducting a thorough stakeholder analysis and documenting each person and their role in the stakeholder register, it’s necessary to prioritize stakeholders based on their interests and influence as below:
High-influence and high-interest stakeholders are key stakeholders who play a key role and have a high impact on the success of a project, such as project sponsors or business leaders.
High-influence andlow-interest stakeholders may be secondary leaders who may not currently have a direct interest but can influence the outcome of a project.
Low-influence and high-interest stakeholders may play more of a mentoring and support role whereby they aren’t directly involved but are capable of rallying the troops or of playing a disruptive role.
Low-influence and low-interest stakeholders may not have an impact on a project and only have a casual interest in how the project is progressing. These stakeholders could work in other departments not directly impacted by the project.
4. Develop a communications plan for stakeholders
An effective stakeholder management plan depends on having a comprehensive communications plan that spells out the frequency and types of communication with all stakeholders. How project communications will be documented and tracked is critical to ensuring all stakeholders are kept up-to-date, and progress is being made. The project communications plan should include the following details:
A description of the type of communication
The frequency of communications
The format (e.g., email, person-to-person, telephone)
The participants for each type/mode of communication
Distribution for the communications
The final deliverables
The owner of each communication
Stakeholder management best practices
In addition to developing a stakeholder management plan, there are some best practices that can help smooth stakeholder management. For a stakeholder management plan to work as it is intended, project managers should recognize the need to practice transparency, inclusiveness, clarity, and timeliness.
Transparency: Transparency is critical when managing stakeholders because it helps establish trust. Transparency creates a direct link to a leader’s intentions and helps stakeholders decide whether they want to buy into a project.
Clarity: Strong project leaders develop clear communication and make the complex seem simple. Providing clarity can also keep stakeholders at various levels focused and on task, making it easier for the project to stay on track.
Inclusiveness: Teams are becoming more distributed, making inclusiveness vital. Whether it’s differing opinions, experiences, backgrounds, genders, beliefs, or other factors, inclusiveness means practicing fairness across the board without making concessions for only some stakeholders.