STAKEHOLDERS INTRODUCTION & DEFINITIONS
“Stakeholders” in a Program or Project are individuals or groups or organizations, who are involved in your project by virtue of real or perceived stake as well as interests. In simple words, stakeholders are people who are involved and/or are impacted by your project in some manner or the other, and hence have an interest in the project’s proceedings as well as outcomes.
The impact of your project may be positive or negative on a stakeholder’s interests; depending on which a stakeholder’s conduct towards the project maybe favorable (i.e. Positive Stakeholders) or maybe unfavorable (i.e. Negative Stakeholders). Additionally, stakeholders may be a part of the project-executing-organization (i.e. Internal Stakeholders) or external to the organization (i.e. External Stakeholders). In Software and IT projects, stakeholders can be programmers, software testers, team leads, senior management, clients, end-users, system administrators, vendors, impacted interest groups, competitors, etc. The list of stakeholders can be large and pretty diverse depending on the number of people who are directly or indirectly involved and impacted.
WHY MANAGE STAKEHOLDERS
Irrespective of stakeholder type, stakeholders have one thing in common: influence and interest in a project. Because stakeholders can influence a project in a negative or positive manner, they are of interest to you, i.e. if you happen to be a part of the Program’s/Project’s management team, especially the Project Manager or the Program Manager.With a track-record of high degree of software project deviations, mortality, and failures, it is important that Software and IT Project Managers take stakeholder management aspects very seriously. It is advisable that in order to execute stakeholder management effectively a methodical approach, defined artifacts, and organizational practices is adopted at an enterprise level. Ignoring defined stakeholder management practices, increases project risks multi-fold.
One of the established approaches to stakeholder management starts right at the beginning of a project, i.e. at the time your Project Charter is being penned down. An effective stakeholder management process is:
- Identify your Project Stakeholders right at the start of the project, if possible individual by individual
- Analyze stakeholders e.g. their fears, interests, requirements, & expectations and then categorize them into well defined stakeholder groups
- Also categorize the identified stakeholders into well defined stakeholder-categories in accordance to a selected model (e.g. Salience Model)
- Develop a stakeholder register and then prioritize stakeholders in order of importance in this Stakeholder Register
- Develop strategies to deal with each of the stakeholder-groups and stakeholder-categories
- To the extent possible, include key-stakeholder management into your Risk Management Plan/Matrix
- Track stakeholder management strategies and status periodically using the stakeholder register and risk management matrix
FIRE ANALYSIS: FEAR, INTEREST, REQUIREMENT, & EXPECTATION
Once your project stakeholders have been identified, a need to analyze stakeholders arises. This analysis is executed in order to classify stakeholders into multiple groups with common or similar fears, interests, requirements and expectations in context to the project. Knowing stakeholders’ fears, interests, requirements and expectations helps Project Managers to create a better project plan. In order to execute this analysis you as a Project/Program Manager need to understand the following stakeholder characteristics:- Stakeholder Fears: Fears are occurrences of undesirable conditions or outcomes in a project which a stakeholder is keen to avoid, and to meet their respective project interests.
- Stakeholder Interests: Interest consists of aspects that drive or motivate the stakeholder concerned. In short these are usually the stakes of the stakeholder in the project, which they strive to achieve. Stakes cannot be negotiated and hence are unchangeable.
- Stakeholder Requirements: Requirements are a “negotiated expectations” of the stakeholder. Usually requirements are reached after a consensus has been reached between various stakeholders. Remember, requirements can be negotiated and changed as long as they support the stakes of a stakeholder in all possible ways. Secondly, requirements must be in line with key expectations of the stakeholders. Thus Project Managers can negotiate with stakeholders on requirements, without changing their respective stakes in the project and keeping in line with the stakeholders’ key expectations.
- Stakeholder Expectations: These are one-sided statements of requirements created by stakeholders as narrated to the Project Manager, without giving any due consideration to any of the other stakeholders of the project. Expectations can also be defined as a situation which a stakeholder ideally wants to take place. However expectations need to be influenced in order to balance between competing/conflicting stakeholders.
Once you have defined the stakeholders’ fears, interests, requirements and expectations, it is time to categorize the stakeholders.
STAKEHOLDER CATEGORIZATION MODEL
To determine stakeholder positions in a project, an apt stakeholder categorization model may be used. The rationale for developing or adopting a generic model is to facilitate Project/Program Managers to deal with various stakeholders and complex project situations in an effective manner, irrespective of the project nuances. Thus the model which is finally adopted must not be based on specific stakeholder characteristics or their detailed stakes in a project, but it should be based on a generic approach according to which Project Managers prioritize stakeholder claims and characteristics. |
| The Salience Model for Stakeholder Management |
Some of the commonly used models are Power-Interest or Power-Influence grid. However, the Salience Model (Mitchell et al. 1997) offers a relatively more detailed insight for stakeholder categorization, while maintaining independence from all project specific nuances. Salience Model categorizes stakeholders on three stakeholder attributes:
- Power: The ability of stakeholders to influence project outcome or deliverables
- Urgency: Expected response time of a project stakeholder to meet their needs & requirements
- Legitimacy: Authority level involvement of a project stakeholder
Other than non-stakeholders the Salience Model categorizes stakeholders into seven stakeholder-categories. These seven stakeholder categories can be used to understand stakeholder behaviors, their impact on the project, and form a strategy for Managers to prioritize them. The following text describes each of these seven categories in details.
DEFINITIVE STAKEHOLDERS
They have all three attributes of the Salience Model, i.e. Power, Legitimacy, and Urgency. They are the most critical of all stakeholders and have maximum impact on the project outcome. They usually have a very high degree of interest in the project, and need focused as well as continuous attention. Techniques of managing these stakeholders include (but is not limited to):
Structured / Detailed Stakeholder Analysis: Develop a detailed Stakeholder Analysis Table, specifically for these stakeholders. This table may contain key columns such as stakeholder name, role, involvement, influence, supporter, influencing factors & motivation, project-stake, expectations, etc. The aim of this table is to record clearly and concisely Definitive Stakeholders’ characteristics which may impact the project and which may be used to manage the stakeholder.
Relationship Building: The Project Manager or Program Management Team must maintain close and strong ties with these stakeholders. Other than planning, monitoring, etc. the Project/Program Manager must build strong positive relationship with these stakeholders by focusing on trust building, maintaining transparency, demonstrating commitment, etc.
Communication Plan: Define a clear communication plan, maintain transparency, to the degree needed, at all times, and finally have a clear-cut timeline of communication. It is recommendable to have two levels of communication plan with these stakeholders. First, communicate as per defined and approved communication template on periodic basis. Second, communicate with them on need basis. Need based communication must have defined trigger conditions, escalation routes and timelines within which need based communication must be executed. If the necessity of need based communication does arise then consider to offer Definitive stakeholders a micro-level view of the project if needs be. A word of advice here: Eliminate any layer of communication between the Project Head (e.g. Project Manager) and the Definitive stakeholders. If this is not possible due to some reason then minimize the number of layers to the extent possible.
Risk Management Plan: Definitive stakeholders have the capability of influencing projects all throughout its life. It helps to track the consequence of their impact, especially negative impact, and draw up a risk management plan for the same. An important pointer: Stakeholder Risk Management Plan formation should be a strategic planning process, while the execution of the same should be a strategic management process.
Structured / Detailed Stakeholder Analysis: Develop a detailed Stakeholder Analysis Table, specifically for these stakeholders. This table may contain key columns such as stakeholder name, role, involvement, influence, supporter, influencing factors & motivation, project-stake, expectations, etc. The aim of this table is to record clearly and concisely Definitive Stakeholders’ characteristics which may impact the project and which may be used to manage the stakeholder.
Relationship Building: The Project Manager or Program Management Team must maintain close and strong ties with these stakeholders. Other than planning, monitoring, etc. the Project/Program Manager must build strong positive relationship with these stakeholders by focusing on trust building, maintaining transparency, demonstrating commitment, etc.
Communication Plan: Define a clear communication plan, maintain transparency, to the degree needed, at all times, and finally have a clear-cut timeline of communication. It is recommendable to have two levels of communication plan with these stakeholders. First, communicate as per defined and approved communication template on periodic basis. Second, communicate with them on need basis. Need based communication must have defined trigger conditions, escalation routes and timelines within which need based communication must be executed. If the necessity of need based communication does arise then consider to offer Definitive stakeholders a micro-level view of the project if needs be. A word of advice here: Eliminate any layer of communication between the Project Head (e.g. Project Manager) and the Definitive stakeholders. If this is not possible due to some reason then minimize the number of layers to the extent possible.
Risk Management Plan: Definitive stakeholders have the capability of influencing projects all throughout its life. It helps to track the consequence of their impact, especially negative impact, and draw up a risk management plan for the same. An important pointer: Stakeholder Risk Management Plan formation should be a strategic planning process, while the execution of the same should be a strategic management process.
DOMINANT STAKEHOLDERS
These stakeholders are of Expectant Type, i.e. they have two attributes and in this case its Power and Legitimacy, but not Urgency. These are important stakeholders by the virtue of the legitimacy and power they hold and hence wield considerable influence on a project’s outcome as well as its deliverables. Techniques of managing these stakeholders include (but is not limited to):
Relationship Building: As such these stakeholders display limited interest in the project. Assuming Project Managers are hard-pressed for time, it is a good idea to delegate the relationship building to more dedicated group of people or individual. Remember in times of crisis these stakeholders can bail you out provided the activities of relationship building had been proactive.
Communication Plan: The key to manage these stakeholders is to understand their expectations accurately and involve them on a periodic basis, e.g. monthly reviews or milestone reviews. An effective technique is to understand their exact interests at a micro level and define a periodic communication-instrument, e.g. Report Templates which have a tailored and yet a concise format. In the Stakeholder Communication Plan be sure to define when, how, and on what aspects these stakeholders will be informed. It’s a good idea to provide these stakeholders with their respective periodic report and then follow them up with a brief discussion about the report and queries if they would like additional information on your project health.
Risk Management Plan: These stakeholders need to have a place in your Risk Management Matrix. Track the parameters which might trigger these stakeholders to exercise their Power or Legitimacy aspects, thereby influencing the project adversely. Additionally it is a good idea to have dedicated team/persons, which create/have good inter-personal relationship with these stakeholders, to execute mitigation plans should the need arise.
Relationship Building: As such these stakeholders display limited interest in the project. Assuming Project Managers are hard-pressed for time, it is a good idea to delegate the relationship building to more dedicated group of people or individual. Remember in times of crisis these stakeholders can bail you out provided the activities of relationship building had been proactive.
Communication Plan: The key to manage these stakeholders is to understand their expectations accurately and involve them on a periodic basis, e.g. monthly reviews or milestone reviews. An effective technique is to understand their exact interests at a micro level and define a periodic communication-instrument, e.g. Report Templates which have a tailored and yet a concise format. In the Stakeholder Communication Plan be sure to define when, how, and on what aspects these stakeholders will be informed. It’s a good idea to provide these stakeholders with their respective periodic report and then follow them up with a brief discussion about the report and queries if they would like additional information on your project health.
Risk Management Plan: These stakeholders need to have a place in your Risk Management Matrix. Track the parameters which might trigger these stakeholders to exercise their Power or Legitimacy aspects, thereby influencing the project adversely. Additionally it is a good idea to have dedicated team/persons, which create/have good inter-personal relationship with these stakeholders, to execute mitigation plans should the need arise.
DEPENDENT STAKEHOLDERS
These stakeholders are of Expectant Type, i.e. they have two attributes which in this case are Urgency and Legitimacy, but not Power. Though these stakeholders have no real power on the project; however they are important for the support they can provide to the project. These stakeholders need to be managed because they may, at some point of time or under some conditions, align themselves with project stakeholders who wield power such as Definitive or Dominant stakeholders and hence influence your project adversely. Remember, managing these stakeholders can ensure that in crisis the influence of other adverse project stakeholder categories are reduced. Techniques of managing these stakeholders include (but is not limited to):
Relationship Building: The effort required to involve these stakeholders in a project is not substantial, provided they are aware of a process of their interest. Access to technical expertise, assistance and sharing of information (to the extent possible) in order to ensure their involvement may be used to build relationship and sustain their interests. Stakeholders of this category include domain experts, etc.
Communication Plan: One of the communication strategies with these stakeholders is to involve them in their areas of interest, and to keep them updated or informed on a periodic basis. The defined communication plan/template for these stakeholders should include specifically the areas of their interest. It is also a good practice to involve them periodically in meetings which have agenda of their interest.
Risk Management Plan: If you intend to include the impact of these stakeholders in your risk management plan, then focus on and track them being aligned with other stakeholder opinions and adversely impacting your project.
Relationship Building: The effort required to involve these stakeholders in a project is not substantial, provided they are aware of a process of their interest. Access to technical expertise, assistance and sharing of information (to the extent possible) in order to ensure their involvement may be used to build relationship and sustain their interests. Stakeholders of this category include domain experts, etc.
Communication Plan: One of the communication strategies with these stakeholders is to involve them in their areas of interest, and to keep them updated or informed on a periodic basis. The defined communication plan/template for these stakeholders should include specifically the areas of their interest. It is also a good practice to involve them periodically in meetings which have agenda of their interest.
Risk Management Plan: If you intend to include the impact of these stakeholders in your risk management plan, then focus on and track them being aligned with other stakeholder opinions and adversely impacting your project.
DANGEROUS STAKEHOLDERS
These stakeholders are of Expectant Type, i.e. they have two attributes which in this case are Urgency and Power, but not Legitimacy. These stakeholders may take unlawful and sometimes even violent or crafty means to achieve their objectives. Stakeholders of this category try to influence the project outcome or its deliverables, mostly by coercing their views and opinions on the project. One of the ways, this stakeholder category behaves is, trying to influence other stakeholders to form opinions and act in a manner desirable to them. In cases such as these the stakeholder-categories they usually try to influence are the ones who fall under the Dominant, Discretionary, or Dependent categories. Techniques to manage these stakeholders include (but is not limited to):
Relationship Building: Knowing the very nature of this stakeholder category, the Project Manager is usually left with limited options, e.g. to build relationship (if at all) based on either keeping them satisfied & non-interfering or keeping them appropriately engaged in activities which gives them little time to interfere in project matters.
Communication Plan: An effective means of communicating with these stakeholders is use of formal communication channels. If it is an external stakeholder then use formal/public communication channels if needs be. If it is internal stakeholder then use official communication channels to the extent possible. Watch very closely what is communicated to this stakeholder category, as the communicated information may be interpreted as per their convenience. Use communication artifacts which are very clear, unambiguous, and preferably approved by other stakeholder categories such as Definitive, Dominant, Discretionary, etc.
Risk Management Plan: Be sure to include this stakeholder category in the Risk Management Plan and keep a very close watch at all times on their actions, and the possible impact it may have on your project.
Relationship Building: Knowing the very nature of this stakeholder category, the Project Manager is usually left with limited options, e.g. to build relationship (if at all) based on either keeping them satisfied & non-interfering or keeping them appropriately engaged in activities which gives them little time to interfere in project matters.
Communication Plan: An effective means of communicating with these stakeholders is use of formal communication channels. If it is an external stakeholder then use formal/public communication channels if needs be. If it is internal stakeholder then use official communication channels to the extent possible. Watch very closely what is communicated to this stakeholder category, as the communicated information may be interpreted as per their convenience. Use communication artifacts which are very clear, unambiguous, and preferably approved by other stakeholder categories such as Definitive, Dominant, Discretionary, etc.
Risk Management Plan: Be sure to include this stakeholder category in the Risk Management Plan and keep a very close watch at all times on their actions, and the possible impact it may have on your project.
DEMANDING STAKEHOLDERS
These stakeholders are of Latent Type, i.e. they have only one attribute, which in this case is Urgency but do not hold any Power or Legitimacy on your project. This stakeholder category consists of individuals or groups who demand your immediate attention because they believe that their view/opinion/work is important to the project, while in all probability, their view/opinion/work may not be all that important for the project at all. Techniques to manage these stakeholders include (but is not limited to):
Relationship Building: Even if you spend much time and effort on these stakeholders, you won’t gain considerable project mileage. As a matter of fact, a number of times this stakeholder category can be a real bother to the Project Manager. It is thus advisable to either altogether ignore or limit the interactions and the duration of the interaction with this stakeholder category or delegate relationship maintenance to personnel with indirect involvement in the project.
Communication Plan: An effective tactical measure communication plan, if at all one is needed, for this stakeholder category is “diplomatic redirecting” or “diplomatic procrastination”. Under this strategy the Project Manager (or an authorized personnel thereof) meets them, spends as little time with them as possible, or delegates communication responsibilities to other personnel such as the Public Relations Officer.
Risk Management Plan: One of the risks which may be tracked is this stakeholder’s actions to form alliance or some form of influence on other Expectant or Definitive stakeholders.
Relationship Building: Even if you spend much time and effort on these stakeholders, you won’t gain considerable project mileage. As a matter of fact, a number of times this stakeholder category can be a real bother to the Project Manager. It is thus advisable to either altogether ignore or limit the interactions and the duration of the interaction with this stakeholder category or delegate relationship maintenance to personnel with indirect involvement in the project.
Communication Plan: An effective tactical measure communication plan, if at all one is needed, for this stakeholder category is “diplomatic redirecting” or “diplomatic procrastination”. Under this strategy the Project Manager (or an authorized personnel thereof) meets them, spends as little time with them as possible, or delegates communication responsibilities to other personnel such as the Public Relations Officer.
Risk Management Plan: One of the risks which may be tracked is this stakeholder’s actions to form alliance or some form of influence on other Expectant or Definitive stakeholders.
DISCRETIONARY STAKEHOLDERS
These stakeholders are of Latent Type, i.e. they have only one attribute, which in this case is Legitimacy but do not hold any Power or Urgency on your project. Because they do have legitimacy but no urgency or power, the Project Manager needs to interact with them on a periodic basis. At times it is a good idea to involve them in the Project because other stakeholders recognize the legitimacy of Discretionary Stakeholders. Techniques to manage these stakeholders include:
Relationship Building: Project Managers may choose to form alliance with this stakeholder category to create some sort of extra endorsement for their project. Usually Project Managers should consider for relationship building only those individuals in this stakeholder category who enjoy recognition or have good interpersonal relationships with other stakeholders of the project.
Communication Plan: As this stakeholder category enjoys Legitimacy attribute, your Communication Plan for them should include a provision for regular status updates with only macro level details of the project.
Risk Management Plan: Usually there is no need to include impact of this stakeholder category in your Risk Management Matrix.
DORMANT STAKEHOLDERS
These stakeholders are of Latent Type, i.e. they have only one attribute, which in this case is Power but do not hold any Legitimacy or Urgency on your project. Because they have power vide their own actions over which you may have practically no control, you should monitor them on a regular basis, such as to assess the impact their actions may have on your other project stakeholders. Always remember this stakeholder category may become active if something has gone horribly wrong with your project, hence it’s important that these stakeholders are always kept satisfied. Techniques to manage these stakeholders include:Relationship Building: Involve them in the Project periodically e.g. during Project Milestones, because other stakeholders recognize their power. Don’t ignore these stakeholder category altogether, as they may prove to be “sleeping giants”.
Communication Plan: Frequency of communication with these stakeholders should be preferably kept limited and at specific major milestones. Keen understanding of their specific informational requirements and their project stakes is important. Use summarized reports of project status. Keep these periodic reports as concise as possible and never burden them with micro-level details.
Risk Management Plan: Remember this stakeholder category does not come into action until things have gone considerably awry with your project. It is thus a good idea to anticipate their actions under various project-crisis conditions and include them in your Risk Management Matrix if possible.
CONCLUSION
Other models, than Salience Model, for Stakeholder Management are of course available and selecting an appropriate model is finally based on the wisdom of the Project Manager and possibly on enterprise practices. Whatever be the selected model, ensuring three things in Stakeholder Management practices facilitates Project Management & Execution considerably:- Accurate and complete stakeholder identification
- Planned, structured, and proactive stakeholder management practices
- Good communication and risk management approaches
