Introduction to Stakeholder Management

The SWWE Branch were very pleased to be able to invite Benedict Pinches of the People SIG’s Stakeholder Engagement Focus Group and Director of Oxford Major Programmes to talk about stakeholder management on 22 March 2017 in Bristol.

Benedict started with several definitions of stakeholder management, from the APM, and the PMI, but his preferred one adapted from Ed Hoffman, is “A stakeholder is any group or individual who can affect, or is affected by, the achievement of a project’s purpose”.

He explained that the word “management” does not fully reflect the challenges of dealing with people and used a case study of a new rail line to explain that an organisation’s lack of engagement with key stakeholders resulted in legal action and award of major compensation. Traditionally, success is focussed on delivering to the project plan in terms of time, cost and quality rather than what different stakeholders actually view as project success. This can lead to mistrust from stakeholders. It is questionable whether it is possible to actually ‘manage’ stakeholders, so stakeholder engagement may be a better term.

Stakeholder management is often seen as one of the soft skills, but in fact it is difficult to do and requires real investment in resources and the project team needs particular skills including empathy. The point was made that it has been found that 50% of finance system projects fail due to a breakdown in communication. Project management is a mix of science, craft and art, where the latter is focussed on trying to understand empathy in dealing with stakeholders.

An example stakeholder map was discussed for an IT change project, with stakeholders layered as buyers, builders and users. It is important to be clear about which stakeholders the project team is focussed on to deliver the expected benefits. Each stakeholder will have different views of project success and what benefits they expect to be delivered. Trying to meet all expectations is very difficult and shows why stakeholder engagement is so important.

Having established what stakeholder management is and why it is important, Benedict turned to ‘how to do it’. Effective stakeholder management starts with leadership and communication of why how and what. It is essential the project team understands the why, so that they are emotionally engaged and motivated.

Identifying stakeholders involves asking questions about who is effected by this, who do not have a voice, who are the users, who is responsible for the outcomes, who has power and influence, who is a supporter, who is against the project. Stakeholders can be internal as well as external including the general public and regulation authorities. A balance is needed to avoid going too far.

Once identified, stakeholders can be mapped using power / interest matrices. Those with high power and interest need to be proactively managed. Those with low power and interest can be monitored and kept informed. A variant of this standard analysis looks at stakeholder attributes of power, legitimacy and urgency, to categorise stakeholders and strategies for managing them. Stakeholder mapping informs stakeholder communication plans and risk management plans.

Individual stakeholders who have been identified as critical can also be analysed by their personality types, looking at responsiveness and assertiveness. These can include driver, analytical, expressive and amiable personalities. Each will need to be managed differently and this analysis will inform communications planning.

Another factor to be considered is the Kubler-Ross change curve, the emotional roller coaster that describes how people react to change; through initial shock, denial, frustration, depression, experiment, decision and integration. Understanding human emotional response is important to design effective communication.

The aim of stakeholder management and communication planning is to change the commitment of stakeholders over time. Moving them from their current position, for example being aware, to fully engaged and committed to delivery over a period of time.

Stakeholder management / engagement is not a one-off exercise done at the start of a project, and forgotten about. It is an integral function of project management and needs to be part of everyday activities. Even regular monthly reviews may be insufficient to respond to changing stakeholder views. The cycle of identify, analyse, plan and engage should be on going.

Effective stakeholder management / engagement will reduce project risk, reduce schedule slippage and reduce costs.

In summary, effective stakeholder management is a core project management skill and activity that is essential to maximise the chances of project success. It cannot be seen as a nice to have, but should be built into normal working practice, planned and resourced as part of the project management plan. Stakeholder management is integral to risk management and planning. Stakeholder risks will be identified that need to be mitigated and managed.

A copy of the presentation is available on Slideshare.

Martin Gosden
SWWE branch Chairman