What is stakeholder engagement?
Stakeholder engagement is the practice of interacting with, and influencing project stakeholders to the overall benefit of the project and its advocates. The successful completion of a project usually depends on how the stakeholders view it.
Their requirements, expectations, perceptions, personal agendas and concerns will influence the project, shape what success looks like, and impact the outcomes that can be achieved. Successful stakeholder engagement is therefore a vital requirement for professional project management.
Stakeholder engagement vs stakeholder management
Stakeholder Engagement differs from Stakeholder Management and there are many interpretations and definitions. Communities of practitioners in different sectors, cultures and locations have developed their valid descriptions as to what it is and how it is successfully practised.
Stakeholder Management is essentially a process, defined in the APM BoK as: “the systematic identification, analysis, planning and implementation of actions designed to engage with stakeholders”.
By contrast, Stakeholder Engagement is the practice of influencing a variety of outcomes through consultation, communication, negotiation, compromise, and relationship building.
These are encompassed in the 10 Key Principles and are those practices needed to
- gain stakeholder approval and support
- minimise their opposition and satisfy their needs as far as possible
- anticipate what human risks and opportunities might arise
- enable plans to be laid and managed.
Who are stakeholders?
The term ‘stakeholder’ is comparatively new and the specific nature of what a stakeholder is remains contested. In general terms, Stakeholders are individuals or groups with an interest in the project, programme or portfolio because they are involved in the work or affected by the outcomes.
Stakeholders might be individuals, groups or organisations being affected by the outcome of the project, or in a position to affect that outcome.
There are several definitions:
“Stakeholder: individuals or groups who have an interest in the project, programme or portfolio because they are involved in the work or affected by the outcomes”, source: APM Body of Knowledge, 6th edition (2013)
“Stakeholder: any individual, group or organisation that can affect, be affected by, or perceive itself to be affected by, an initiative (programme, project, activity, risk)”, source: PRINCE2TM: Glossary of Terms (2009)
Slide share: Introduction to stakeholder management
Why should I engage stakeholders?
Benefits of doing it
- Increased trust and confidence across the project community
- Increased certainty and pace of progress
- Clearer understanding of remaining resistance
- More robust risk management: "If we don't do it, or we can't operate". (e.g. Shell in Nigeria or BP in Indonesia)
- Increased 360° awareness of organisational circumstances. For example:
- Sustainability compliance management: "If we don't do it, we won't be successful" (e.g. Sustainable coffee sourcing at Nestlé, supply chain engagement at Adidas)
- Market development: "If we do it, we can access new markets" (e.g. Danone with its base of the pyramid model)
- Innovation: "If we do it, we will be up to speed with our products"
- Strategy: "If we want to grow, we have to do it. It will not only save us money, but make us better" (Few companies engage for strategic purposes, although Unilever has made some strides).
Risks of not doing it
- Uncertainty of outcome
- Likelihood of reactive planning
- Emotional Ineptness
- Diversion and distraction of resources
- Silo thinking, factions and division amongst all levels: individual, group, organisational
- Unprofessional and unethical behaviours
When should I engage stakeholders?
Stakeholder engagement is needed throughout a project’s lifecycle. Here are some examples of when these interventions are needed.