What is a Stakeholder in Project Management?
If it takes a village to raise a child, then it’s safe to say it takes a whole city to run a project. No matter how agile and lean you try to run your projects there are inevitably going to be a lot of people involved in getting you from project proposal to launch day.
One very important group of these people are your project stakeholders.
Stakeholders can be either a headache or a major source of help. And learning how to identify, handle, and manage them is an essential skill for any project manager.
What exactly is a project stakeholder? And what do they do?
Simply put, a stakeholder is an individual, group, or organization who is impacted by the outcome of a project and can sway it’s success either way.
This means people within your organization like the project team, managers, and executives, as well as external stakeholders like customers, users, and anyone else who will be affected by your project at any point during its development. It’s a lot of people to be aware of, which is why understanding exactly who your stakeholders are, their level of importance, and prioritizing them is so important.
To make this even clearer, let’s dig into some of the most typical stakeholders you’ll deal with and outline their specific duties and responsibilities:
- Project manager: The person leading the project. They’re the ones responsible for keeping the project on track, guiding the team, and communicating with and managing the rest of the project stakeholders.
- Project team members: The group working on the project and following the project manager’s leadership. Their roles and responsibilities are to do the tasks assigned to them and help get the project to completion.
- Project sponsor: The person or group who is financing the project. They make sure the project has the financial support it needs to be completed and therefore have a large interest in and impact on its outcome.
- Executives: The senior-level management at the organization running the project. They direct the company’s strategy and also have a large interest in its outcome.
- Customers: The people who will be directly using the results of the project. As the people paying to use your product, they have a loud and varied voice when it comes to what they want from the project.
- Resource managers: Other managers and team leads who control the resources needed to complete the project. They’re the gatekeepers for the resources you need to finish the project and will want to have a say in its outcome.
- Consultants and subcontractors: Teams and individuals outside the organization who are working on the project. They’re responsible for doing the work outlined in their SOW.
- Groups impacted by the project as it progresses: Internal and external groups or individuals who will be affected as the project is worked on. This might mean people who experience downtime as the project is being completed or who lose service due to the work being done.
- Groups impacted by the project after its completion: Internal and external groups or individuals who will be affected by the project being finished and launched. This could mean partners, users, competitors, or even government groups who will be impacted by what you’re doing.
Depending on the size and scope of your project, your list of stakeholders could include all of these groups, or only a handful. Either way, every stakeholder will have an opinion on what “success” looks like for this project and will have to be handled with care and discretion.
Every stakeholder will have an opinion on what “success” looks like and will have to be handled with care and discretion.
Stakeholders vs. Key stakeholders
Before you start panicking (like I would looking at a list of people like this!) you need to remember that not all stakeholders are the same. While anyone who is impacted by the project is technically a stakeholder, key stakeholders are those who have influence and authority to dictate whether a project is a success is not.
These are the people who will make or break your project—like the sponsor, funding groups, or government agencies. If all else fails, you need to make sure that their needs are met and they’re happy.
A 3-part stakeholder management process for keeping everyone happy
Managing all these stakeholders is no small task. And it’s just another thing on your already long to-do list as a project manager. However, ignoring them isn’t an option. As we said earlier, project stakeholders can either be a huge help in getting buy-in for the project, dealing with internal (and external) politics, and supporting you and your team. Or they can be a huge headache.
So, how do you handle all your project stakeholders?
As the Project Management Institute writes, all it takes is to “identify the stakeholders, determine their requirements and expectations, and to the extent possible, manage their influence in relation to the requirements to ensure a successful project.”
That’s the what. But how you do that is a little more nuanced. Here’s a 3-step process to help mitigate the risks of dealing with stakeholders and make sure as many of them as possible are happy with the project:
- Stakeholder Identification. Identify and prioritize all the potential stakeholders.
- Stakeholder Buy-In and Strategy. Understand expectations and create a strategy for dealing with them.
- Continuous Stakeholder Management. Communicate throughout the project with the right stakeholders at the right level.
Step 1: Identifying and prioritizing the right project stakeholders
There’s nothing worse than being blindsided half-way through a project by an unknown stakeholder. All of a sudden Jeff from sales muscles his way into your scrum to tell you what you’re building won’t work with their team. Or Sam from support sends you an email two days before your product launch to let you know the technology you’re using doesn’t connect to their help desk.
There’s nothing worse than being blindsided half-way through a project by an unknown stakeholder.
These situations suck. And it’s easy to blame these people for being blockers. But if you’re being caught flat-footed late in the game by a stakeholder who has the authority to kill your project, the fault is all yours.
Successfully navigating your stakeholder relationships starts by knowing exactly who you’re dealing with. And while you might think you know who everyone is, it’s better to go through a systematic approach to make sure no one is being missed.
1. Brainstorm with your project team
Start by asking your internal team—the project’s sponsor, manager, and team—to brainstorm anyone who might be impacted by the project. Give everyone time to do this individually and then come together as a team to create a definitive list.
When brainstorming, ask team members to answer a few simple questions:
- Who cares about this project?
- Who wants to influence this project (positively or negatively)?
- Who will be affected by the outcomes of this project?
- Who approves funding/requirements/design/changes/schedule, etc…?
- Who will have their work disrupted by this project?
2. Break down the project decision trail
While the brainstorming session will give you a good list to start from, it can be hard to identify stakeholders who might only be influential at certain points of the project. Every project is made up of a series of decisions and approvals. And each of those pivotal moments is an opportunity to identify more stakeholders.
Take a look at your project proposal and list who is involved in each decision, what their authority is, and whether they’re an internal or external stakeholder.
3. Dig in and find your secondary stakeholders
There’s also a small, yet significant group of stakeholders that won’t have huge influence on your project. But who you still need to be aware of and manage. This could mean people like:
- Regulators who won’t get involved unless something goes wrong or you break a rule
- Your customer’s customers
- Competitors and opponents of the project
Most of these groups won’t get involved unless their interests are seriously violated. But it’s still a good idea to keep them on your radar and add them to your master list of stakeholders.
Whenever possible, put a name on your stakeholders
As you go through these exercises, don’t forget that stakeholders are ultimately people. You’ll be better equipped to understand their needs, responsibilities, and influence if you use actual names instead of titles (i.e. “Ryan Johnson, Director of Marketing” instead of just “Marketing”). Sure, some of your stakeholders will be groups of people, but whenever possible attach a human name or representative to them.
Step 2: Getting buy-in from different stakeholders
With your list of stakeholders in place, you need to understand what they need, and how those needs align with your own. Different stakeholders will have a different idea of what “success” looks like. And ignoring them is a recipe for failure.
On the other hand, you can make powerful allies by showing a key stakeholders that their interests are being met. However, you can’t get there unless you understand all the forces at play. In this step, you and your team will understand the interests of each stakeholder and create a plan of how to optimize the project for each of them.
There’s a few techniques that can help you with this:
Start by prioritizing your stakeholders based on power and interest in the project using Mendelow’s Matrix:
Where each stakeholder ends up on the grid will help determine how you handle them and prioritize their needs:
- High power and interest: These are the people you need to engage with regularly and make sure that their interests are being met, such as the project sponsor.
- High power and low interest: These are the people who still have potential to block your project, but aren’t actively invested. Take time to keep them informed, but don’t go overboard. This might be other executives and powerful outside groups who will be impacted by the project’s outcomes.
- Low power and high interest: Despite their relative lack of decision-making power, you still want to keep these people regularly informed to updates and changes and make sure no major problems are arising. This could be your customers, teammates, or consultants.
- Low power and interest: These are the stakeholders who should receive semi-regular updates, but that’s about it. Don’t go overboard trying to manage them or get them too involved. This could be secondary stakeholders or other people at your company.
With your prioritized list, it’s a good idea to dig in and analyze your key stakeholders (the high power and interest group). These people have the most ability to block your project and so you need to deeply understand their needs.
Look at the list of them and ask a few questions to really understand their motivations:
- What is their name, title, and contribution to the project?
- What authority do they have over the project and what is their stated goal? Does it relate to larger goals like organizational or personal ones? (i.e. what would make this a “win” for them?)
- Do they present a specific threat or opportunity?
- What perception do you want them to have about the project during and after its completion?
- What information do they want or need from you? And how do they want to receive it?
A great way to get these answers and to start building a relationship with these key stakeholders is simply to ask them. Talking in person can help you understand how much of a risk these people pose to your project. How do they talk about the work? Are they potential blockers or champions?
Summarize these findings on your grid by adding each stakeholder’s name and color-coding them to signify the risk they pose (i.e. Red = potential blocker. Green = champion.) If you want to go even deeper, you can include these people on your project plan at the decisions or steps where they will be most influential.
Step 3: Best practices for stakeholder management and communication
Whether you’re updating stakeholders on new developments, or trying to influence key stakeholders during a pivotal decision, how you actually go about managing and communicating with them will make all the difference.
Now that you have a good idea of who exactly has influence on your project and where they fit in your power/interest graph, it’s time to come up with a plan for engaging with them. One of the main jobs of any project manager is to manage stakeholder expectations and this all comes down to communicating early and often with everyone who can change the course of your project.
Get buy-in by consulting early and often
You don’t want to neglect your stakeholders until you really need them. But rather, you should start building relationships with them as early as possible. Talk to them as the project is starting up to understand their perspective, how invested they are in the project, and what useful ideas they might have.
This is also a good time to map out the project, explain your goals, and each stakeholder’s role and responsibility in helping you get there.
Create and enforce transparent processes for communication
Depending on their influence and power, each stakeholder needs a different communication strategy. How often do they need to be informed? What kind of information do they require? Are they giving you feedback and suggestions or simply being updated?
Sketch out a strategy for how and when you’ll engage with each stakeholder. This could mean adding stakeholder groups to a weekly or monthly email list, setting up a recurring meeting or call, or putting reminders in your calendar to reach out to key stakeholders at crucial moments where you need their support.
It’s important that this strategy is transparent and everyone knows when to expect updates. Stakeholder communication needs to be proactive, not reactive. You don’t want a key stakeholder coming to you (or your boss) and asking “what’s going on?” Send each stakeholder a product roadmap that outlines the steps you’re taking and when you’ll be in touch.
And remember to use the right tools for the right stakeholder. Be visual with your reports and explain the bigger picture with the help of mock-ups, sketches, and graphics. Clarity is key, and visuals often leave less room for misinterpretation.
Document important conversations
Not every conversation needs to be documented. But you should keep a record of any time you talk to a key stakeholder or someone with influence over a pivotal decision.
This can be as simple as recording the date, person’s name, their role in the project, the nature of the conversation, and what was decided upon. You can document this in your project management software and then email a post-meeting follow up to confirm.
Vet the information you’re getting from them
When you speak with your stakeholders, remember that they don’t know everything you do. Miscommunication and assumptions can derail a project. And as stakeholders typically have multiple projects happening at once, it’s important to cover facts or updates that might seem obvious to you just so everyone is on the same page.
You also want to be aware that you might not be the only person giving them updates. Other stakeholders or people at your company could be influencing their opinion about how things are going. Remember, stakeholders can have both a positive and a negative influence on your project. And when they get bad information you need to handle that ASAP.
There are some specific red flags you can look for, such as comments like:
“I thought X was going to deliver that.” “Wasn’t this supposed to be finished last week?” “X said IT was supposed to deliver that.”
All these are clues that misinformation is being spread and shifting stakeholder expectations for the worse. Whenever you hear these, explain what’s actually happening and then try to find out where that wrong info came from.
Dealing with difficult stakeholders
With so many different people, opinions, and perspectives involved in getting a project over the finish line, you’re bound to come up against a wall more than a few times. Dealing with difficult stakeholders is never fun. But ignoring them is a risk you can’t afford. Luckily, there are a few strategies you can use to turn a naysayer into an advocate (or at least mitigate the effects of their negativity).
First, remember that you don’t want to burn any bridges. In most cases, 99% of your stakeholders want the project to succeed. You can’t ignore that just because you’re having a difficult conversation. Stakeholders might switch sides during a project, but don’t fall into the trap of framing that switch as “you vs. them.” They still want the project to succeed. And your job is to realign and reframe their expectations.
When you do need to meet with a difficult stakeholder, make sure you’re meeting one-on-one. Schedule time to talk to them individually rather than bring up issues in big meetings where they can balloon out of proportion. Everyone feels better and like their opinions are being respected when you make time for them.
Take the time to meet with them and ask open-ended questions to root out the cause of their dissatisfaction. Are they concerned about going over budget? Missing deadlines? Are they getting pressured from people above them?
Finally, don’t forget to actually listen to them. You might be heads down in the project and feel like you don’t have the time for this. But in the long run, letting negativity foster in people who have influence will only slow your project down even more. Instead, talk to them about what’s motivating their dissatisfaction. Do their expectations not line up with the project’s objectives? Or do they simply feel like it should be done a different way?
Finding common ground is the quickest way to kill negativity.
Stakeholders can energize or exhaust your project
Every project has stakeholders. And while you can’t control the way these people feel. With proper identification, communication, and management, you can control their influence on the project.
As a project manager, your allegiances are to the project’s success. And while sometimes a stakeholder might get in the way of that, you can’t get over the finish line without them. So take the time early on to understand who they are, what they need, and how to manage them, and you’ll be doing yourself a huge favor.