How To Effectively Manage Stakeholders To Influence Project Outcomes


managing stakeholders

Effective management of stakeholders is among the most essential ingredients for delivering a successful project. Sometimes, project managers focus so much on the timelines, budget, quality, and scope of a project and give little attention to stakeholders. Failing to treat stakeholders appropriately right from the onset of a project can lead to cost overruns or unnecessary delays, which can impact a project negatively. Not only this, if stakeholders are not managed well, they become roadblocks instead of partners in project implementation.

When partners feel overlooked, they lose interest in the project and this increases the chances of project failure. While it is possible to complete a project and have all deliverables accepted by the client, a project cannot be considered as successfully accomplished if some stakeholders are unhappy. Therefore, you need to manage stakeholders effectively to increase their support towards the project and lessen negative impacts throughout the project’s lifecycle. 

Now, the question that comes to mind after reading this is how can stakeholders be managed effectively to reduce or eliminate obstructions during project management? Well, the interests and functions of different stakeholders can be taken care of variously. Following are ways to effectively manage stakeholders to guarantee the success of any project.

1. Identify All Stakeholders

The first important thing to do after being assigned a project is to identify any organization, group, and individual that affects or will be affected by the activities, decisions, or outcome of the planned project. This implies that stakeholders who are directly or indirectly connected to your project must be identified. It is worth noting that stakeholders can be external or internal to an organization, having diverse needs and levels of involvement in a project. Therefore, it is necessary to recognize all these stakeholders and determine the category that each belongs.

Examples of key stakeholders include the executives, sponsors, project team, suppliers, and end-users of project outcomes. Huge projects that spread out to a large geographical area may require the involvement of the government and local communities. Although some stakeholders will have minimal influence or interest in your project, it is absolutely essential to identify each of them. Some potential challenge or change may come up in the course of project implementation and it may demand the involvement of these stakeholders. So disregarding any of the stakeholders can jeopardize the success of a project.

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Notably, the key stakeholders who hold a legal right over a project should be recognized and prioritized. By default, the needs of these stakeholders form the main objectives of a project. Therefore, they are key players who can help to advance a project or halt it altogether. All identified individuals, groups, and organizations should be recorded in a stakeholder register, which should be updated and developed regularly as stakeholder changes occur.

2. Analyze Stakeholders

The product of the stakeholder identification process is a list of all stakeholders associated with the project. All of them are not equally affected or involved in a project. Some stakeholders have the power to approve or stop project execution while others assist the project manager with expert judgment and opinion. Also, there are stakeholders interested in knowing the status of work progress because their activities can only begin when preceding phases are completed. Furthermore, others need information about the completion of the project since the expected output or solution may enhance their work.

Therefore, the main aim of stakeholder analysis is to understand how to engage all these individuals. This analysis is mainly guided by two variables: power and interest. Power is the ability to alter or stop a project while interest constitutes a stakeholder’s level of involvement in a project. For this reason, the power-interest grid is the most popular stakeholder analysis tool. On the y-axis, the tool has the power level while the interest level is on the x-axis. This helps to categorize stakeholders depending on their interest and power. To apply this tool, you need to determine the authority (power) possessed by the stakeholders and their concerns (interests). Then, plot a 2X2 matrix with interest and power on the x-axis and y-axis respectively.

Notably, stakeholder’s power grows as you move from the bottom to the top along the y-axis. Similarly, the interest level increases as one move from the left to the right side of the x-axis. Notably, the matrix produces four quadrants that demote different characteristics of specific stakeholders. The top right corner denotes stakeholders with high interest and authority. These must be engaged, consulted, and managed actively because they can significantly influence a project.

The bottom right corner represents those with high interest but low power. The project manager should keep these stakeholders up-to-date with the progress and any changes. The bottom left quadrant signifies those with low power and interest. Such individuals can be managed using pull communication with less frequency while monitoring their interest levels. Lastly, stakeholders at the top left corner who have less interest but high power must be kept satisfied although continuous engagement with them is not necessary.



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Other tools that can be used to analyze stakeholders include the influence impact grid, power influence grid, and important influence grid. By analyzing different stakeholders, you will be able to prioritize them, understand their communication needs, and know how to engage them.

3. Determine Effective Communication Methods

Once stakeholder analysis is completed, you need to establish the most appropriate and effective communication methods you will use to influence and engage them. The way you share information with the people you will rely on and work with throughout the project’s lifecycle has profound effects on project success and outcomes. By using effective and efficient communication methods, project managers eliminate gaps in the information conveyed to stakeholders.

The three communication methods that project managers can utilize to effectively manage stakeholders are:

•    Interactive communication

•    Pull communication

•    Push communication

Interactive communication is regarded as the most effective approach because it is multidirectional and offers fast results. It constitutes a face-to-face conversation where two or more stakeholders exchange opinions and ideas in real-time. This method is particularly important when communicating sensitive information that might be misinterpreted, and when you need immediate or urgent answers. Interactive communication can take the form of holding a meeting with stakeholders, an email dialogue, or just stopping someone at work to chat.

Pull communication method is used by project managers to communicate to a large audience. The sender posts information in a shared portal, database, or drive and recipients can access and use it on their terms. As such, a project manager can use this method to communicate general and time-insensitive information to stakeholders without necessarily requiring their feedback. On the other hand, push communication utilizes faxes, podcasts, memos, emails, and other written medium to convey important or interesting information. While immediate feedback is not anticipated, some action is expected when the sent information is accessed.

Where possible, project managers may be required to use all the three communication approaches to achieve communication balance and communicate effectively to all stakeholders.

4. Consult Early And Often With Stakeholders

Stakeholder consultation comprises the development of productive and constructive relationships with all individuals who influence or will be affected by a project. These relationships facilitate project managers to identify stakeholders’ needs, requirements, and expectations. Usually, the success of a project relies heavily on how well the project manager addresses the needs and expectations of stakeholders. This means consulting with them early on is vital to achieving desired project outcomes.

When stakeholders are consulted at an early stage, the project manager is able to use their ideas and opinions to shape the vision and scope of the project. Also, when they are consulted often, one guarantees their support for the project. By involving stakeholders throughout the project, you are able to identify and address their worries and concerns at every phase.

Most importantly, consulting with stakeholders regularly helps to know whether you are on the right track as far as meeting their needs and expectations is concerned. Early consultation does not just offer you an early indication of the most appropriate design and approach for the planned project but also saves you lots of time and hustle. Both the formal and informal methods of consultation are beneficial, particularly when each is applied in its most suitable setting and context.

5. Plan About Conflict Resolution

The objectives of a project cannot be met if those involved are not getting along. Communication helps a team to work towards a common objective. So if team members are not relating well, they will hardly communicate the necessary steps or instructions. This will result in poor coordination, confusion, and delays in work completion. During project planning, planners need to come up with ways to prevent and manage conflict. This includes ensuring that stakeholders agree on project deliverables. Moreover, the rules of engagement that stipulate the functions of different individuals should be established right from the start. Identification of potential conflicts among stakeholders is a crucial step towards conflict anticipation and management.

Besides identifying stakeholders together with their needs and expectations, project managers need to recognize potential conflicts that each stakeholder may be involved in. Potential conflict sources include project budget, resources, and schedule. Notably, conflict may arise based on the power and interest of stakeholders, type of project, or stage of project implementation. Moreover, stakeholders’ expectations on a project might be conflicting. One of the ways to gain insight into conflicting expectations is to understand the motivation of each stakeholder.

Unresolved stakeholder conflicts can derail the completion and success of even well-planned projects. Organizing a forum for conflict resolution is one of the sure strategies to manage conflict. This involves calling for a meeting and allowing everyone to express their views. As a project manager, you should facilitate such meetings and ensure every stakeholder is heard. Conflict resolution forums should be productive and be driven towards resolving underlying issues. Looking for a win-win situation and getting help from experts are other approaches for resolving stakeholder conflicts.

6. Gather Stakeholder Feedback

Project managers may not be able to improve how projects are implemented without obtaining feedback from stakeholders. Regardless of how well we may think particular projects are managed, there are always some aspects that can be improved. By gathering feedback from stakeholders, project managers obtain usable data that help to keep projects on track. Timely responses on the project implementation help to ensure that the objectives and strategic goals of a project are achieved.

Definitely, stakeholders develop a sense of ownership when they are given a chance to provide their opinions and reactions concerning a project. You might have come up with a solution to solve a problem way before obtaining shareholders’ views. Nonetheless, it is a good practice to make them feel part of the project by listening to their views. Then, you can share your solutions using their ideas or words. Stakeholder meetings constitute some of the common feedback channels that project managers can utilize to collect comments and responses from stakeholders. During such meetings, project managers can leverage techniques such as active listening and effective meeting facilitation to guarantee successful information exchange. Other channels that can be used to gather feedback include emails, feedback reports, and polls.

After collecting feedback from stakeholders, you should create an action plan that will guide the process of resolving all the issues raised by stakeholders. Collecting feedback and addressing raised issues assures that stakeholders will remain committed to the project and also facilitates the successful completion of the remaining project phases.

Conclusion

To implement and complete a project successfully, you need to manage all stakeholders and satisfy their expectations. By adopting these guidelines, project managers will effectively manage stakeholders associated with their projects in order to positively influence the achievement of expected outcomes. Successful completion of a project is dependent on whether all stakeholders play their roles effectively. The involvement of stakeholders in project management is particularly emphasized as a major determinant of achievement. Act on these guidelines and you will definitely help project stakeholders to play their roles efficiently and effectively.

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