HomeBlogProject ManagementWho are Project Stakeholders and Why They are Important?
In the world of project management, success goes much beyond meeting defined objectives. It is the skill of managing the diverse environment of stakeholders whose desires, influence, and participation have a substantial impact on the trajectory of any undertaking.
Personally, I think projects no longer function in isolation in today's interdependent society. They flourish in an evolving community of people, groups, and entities, where each has its own set of viewpoints, expectations, and commitments. Recognizing and capitalizing on diversity is not only an economic advantage; it is the foundation of project excellence.
To help you navigate this complex terrain, I have created a project stakeholder management plan that serves two purposes: first, it carefully identifies and comprehends the diverse group of stakeholders connected with our project, and second, it establishes proactive strategies for engaging, connecting with, and controlling these stakeholders during the project phases.
Let me take you through this article, where you will discover an organized structure describing project stakeholder types, roles, communication methods, and interaction techniques.
One of the critical challenges that project managers face to ensure project success is managing stakeholder expectations. The project's success is almost guaranteed when the project manager can drive consensus and influence the stakeholder community toward a shared purpose. But unfortunately, the reverse is equally true. This article introduces you to who a project stakeholder is, what stakeholder management is, why it is critical, and how to go about it.
However, there will be another group who can influence the project outcome through their decisions. It can be the executives of the performing organizations and project sponsors who decide on the resource availability for your projects or even your customers who can provide you with the feedback that determines your project's direction. These people or entities are also your project stakeholders.
Beyond the above broad categorization, the interest in the project outcomes determines the extent to which the stakeholder is critical for project success. Here is a concise definition of who is the project stakeholder.
Any person or entity, who is influenced by or can influence project outcomes and is interested in those outcomes, is a project stakeholder. Project Management Institute (PMI) provides the following project management stakeholder definition.
Individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion.
Beyond the ability to influence the outcomes, the stakeholders in a project are essential for several reasons.
Given the ability of the stakeholders to determine the project's success, their role is vital and thus requires active management efforts from the project managers. Taking up an online course for Project Management, that helps you understand the nature and scope of stakeholders in the context of project management could be a good idea for your career growth.
Internal stakeholders can include various people groups inside the organization and the project team such as:
There are many kinds of external project stakeholders, ranging from customers to regulatory agencies and competitors; a project manager should be aware of them and their functions.
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Project stakeholders play essential functions in all phases of a project, from conception to implementation and continuous operation. Their participation and efforts are crucial to project achievement and long-term performance.
| Defining the Project | Deploying the Service | Service Operation and Monitoring |
| Initiators and Sponsors | Project managers and colleagues | End users and clients |
| Clients or end users | Sponsors and investors | Quality Assurance and Testing Teams |
| Subject Matter Experts | Regulatory Bodies or Compliance Experts | Maintenance and Support Personnel |
Here’s what I believe is the role a reliable project stakeholder plays across several phases of a project.
Stakeholders make substantial contributions throughout the conceptualization and implementation phases of the project.
Throughout the execution phase, project stakeholders play an essential part in driving the project toward an effective deployment.
Following deployment, stakeholders are still involved in monitoring the service's performance and ensuring its long-term success.
Effective project stakeholder management starts with identifying the right stakeholders. Specific stakeholders are easy to identify, as is evident from the list above. However, identifying the right project stakeholders in project management takes effort. These are a few actions you can take to do just that:
It is essential that once you have identified project stakeholders, you manage them effectively throughout the project. Therefore, it is crucial to understand what Project stakeholder management is and what it entails. Project Management frameworks like the PMBOK and PRINCE2 expand on project stakeholder management as a critical aspect of a project manager's responsibilities. Taking up certified PMP training online or a PRINCE2 Project Management certification course will prepare you further in this area. However, the following is an indicative list of actions you can take for your reference.
There are many advantages to effectively managing stakeholder expectations. Let us take a look at a few primary ones.
Within the area of project management, stakeholders are divided into two types, each having various degrees of impact and participation in a project.
Stakeholders: People, organizations, or groups who might directly or indirectly impact the project are referred to as stakeholders. It includes customers, suppliers, government agencies, staff, shareholders, and members of the community. Their worries, interests, and contributions may overlap with the project, but they may not play an essential part in its accomplishment or decision-making procedures.
Key Stakeholders: Key Stakeholders in a project, on the other hand, are a subset of the broader stakeholder community, consisting of persons or groups whose impact, participation, or resources are considered essential to the project's achievement. These stakeholders have substantial power or immediate involvement in the project's outcomes and frequently play significant parts in decision-making, distributing resources, and strategic planning.
It is essential in project stakeholder management to distinguish between stakeholders and key project stakeholders. While stakeholders have a wide range of objectives and affiliations, prominent project stakeholders have substantial power or influence over the project's direction. Identifying and successfully managing these key stakeholders is important since their support, approval, or rejection can significantly impact the project's outcome.
Project managers frequently emphasize involvement and interaction techniques that are targeted particularly to important project stakeholders, intending to align their objectives, manage requirements, and secure their continuous support. Considering the broader stakeholder group, on the other hand, is vital, since their feedback, concerns, and additional impacts can influence the project's result and its general acceptability within the greater environment.
Managing all of your project's stakeholders is possibly the most important aspect. Effective project stakeholder management will be a continuous sub-project under your primary project, and you cannot make errors here. To help you with it, let me share some pointers on how you can deal with stakeholders efficiently during the project phases:
Determine the stakeholders and their different kinds early on, then develop a project stakeholder management plan. Interact with them regularly using surveys and interviews. If the stakeholders are external, include them in your project tracker so they can see the development in real-time. They must be able to offer input on project deliverables as well.
All project stakeholders need to be on a single page about the deliverables of the project from the very beginning. To avoid uncertainty in the final phases of the project, it is critical to identify people's roles and duties as precisely as possible. This is the most effective strategy to avoid project failure, interruptions, and expenditure overruns.
Change requests are prevalent in large, complicated projects. A lot of requirements set in the early stages of a project may need to be reconsidered later. It is important to have a pre-defined procedure for dealing with modification requests. Otherwise, scope creep concerns may impact your and your team's efficiency.
In project stakeholder management, valuable and significant communication is essential to the project's accomplishment. The regularity of communication is also vital, and it needs to be chosen based on the participation and enthusiasm of each stakeholder. Keeping a stakeholder registry from the beginning is one of several tried and tested methods of establishing a schedule and type of interaction for each stakeholder.
A portion of managing stakeholders is visualizing the problem from their point of view. You have to know what each stakeholder agreed to and their situation. You will be better equipped to manage them and meet their needs if you are connected to their perception of how the project will impact them.
Effective stakeholder management builds a strong foundation for project success. Identifying the stakeholders can be tricky given the diversity. They can be internal to your organization or external. Some of them can be obvious, like project sponsors or customers. But others, like government agencies or social groups, may not be easily identifiable. But once you identify them, generate a sense of shared purpose and common success criteria. Then, build a communication plan around those expectations and engage with them throughout the project lifecycle. Taking up any of KnowledgehHut's certification courses for Project Management will prepare you to manage your project stakeholders effectively and significantly increase the chances of your project's success.
A good stakeholder must have relevant domain knowledge, communication skills, the ability to help project managers manage expectations of other stakeholders, and objectivity to evaluate the outcomes appropriately. In addition, an ideal project stakeholder should be able to work collaboratively with other stakeholders to guide the project manager and project team.
To understand the success criteria for each stakeholder, you must first be clear about their expectations from the project, hidden and explicit. For everyone, these criteria may be different, sometimes even competing. That's why, while performing stakeholder management, it is essential to lay out the set of common criteria that will be considered for measuring project success.
While developing the stakeholder communication plan, consider each stakeholder's preferences. For example, some prefer "pull" communication, while others prefer "push" communication. In addition, some prefer formal emails to report progress, while others prefer summary presentations and analysis through project management systems. Identify the best possible medium and frequency for each stakeholder and use the communication plan to report the project's progress.
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