Chapter 6

Customer Relationship Management: Politics and Stakeholders

In This Chapter:

• Power and Politics

• Stakeholder Identification

• Stakeholder Categorization

• Best Stakeholder Management Practices for the Business Analyst

In this chapter, contributing author Richard Vander Horst discusses how important it is for the business analyst to understand project stakeholders, analyze their ability to influence the success of the project, and operate effectively in the context of the power and politics that are always present in the organization.

Power and Politics

One of the most important responsibilities for a business analyst is to identify key stakeholders—individuals and groups who are involved in or will be impacted by the project—and draw them appropriately into the requirements definition and validation activities. Three primary truths are key to this responsibility:

Politics are real. Whenever groups of people are involved, there are politics manifested in views and opinions that drive behaviors. To suppose that a project will not be affected by politics is unrealistic and will ultimately degrade your ability to deliver quality results.

Humans are fairly predictable and, when left to the influences of evolution and culture, will succumb to the pressures and allure of power and control. That is not to say that best intentions are not always at play, for they usually are; the question comes down to whether the best intentions of participants are aligned with the project goals and objectives.

The challenge for the business analyst and other project leaders is to acknowledge that the project will be affected by politics and power struggles, and to implement strategies to manage the political dynamics by: (1) conducting an analysis to determine those who can influence the project, and whether they feel positively or negatively about the project; (2) identifying the goals of the key influencers; and (3) defining problems, solutions, and action plans to take advantage of positive political influences and to neutralize negative ones.

Know and involve project stakeholders. Involving stakeholders within the organization undergoing change and planning to make sure that power and politics do not adversely affect the project objectives is critical to successful execution of projects. All too often, when project teams see themselves as agents of change, they ignore the fact that they are attempting to bring about change to an existing and culturally entrenched environment.

Culture is defined as the attitudes and behaviors that are characteristic of a particular organization. The culture and philosophy of the organization undergoing change will not flex to meet the needs of the project; the project will need to be adapted to the existing culture of the organization.

Successful change initiatives are dependent on many factors: (1) the change must align with the goals of the organization, (2) key influencers within the organization must be involved in designing and implementing the change, and (3) unique perspectives and organizational readiness for the change must be taken into account.

Solution value and sustainability are key measures of success. Deploying the new business solution within time and cost constraints is traditionally considered the major accomplishment to achieve project success. However, the value added to the organization as a result of the new business solution is the true measure of project success. If the solution is delivered on time, within budget, and with the full scope of features, but does not add the expected value to the organization, then the project has actually failed.

To ensure that the project outcomes add the expected value, a project team must understand the long-term goals of the organization and how the deliverables of the project will help advance those goals. A sustainable solution emerges when the project team respects the political landscape, understands the culture of the organization, and ensures that the solution is strategically aligned with the goals of the organization. Many successfully executed projects are celebrated upon completion, only to reveal later that very little of the solution was actually applicable and effective as intended.

When these three truths guide project team decisions, they form the basis for how to deal with the politics and stakeholders surrounding the project. Politics are real, and they exist in every project with virtually no exceptions. Failure to recognize the impact of power and politics will likely result in a failed project.

Finally, remember that completing a project within time, cost and scope constraints is not success; success is delivering a new business solution that meets the business need, advances organizational strategies, adds measurable value, and is sustainable over time.

Stakeholder Identification

The first step in any stakeholder management process is to identify all stakeholders. The PMBOK^® Guide defines a stakeholder as “any person or group that is actively involved in the project, whose interests may be positively or negatively affected by the execution or completion of the project, or may exert influence over the project and its deliverables.”¹ Stakeholder identification is a collaborative effort among the core project leadership team (business analyst, project manager, and business and technical leads).

Stakeholders come in all shapes and sizes, from the executive sponsor of the project to the end user of the solution. Functional managers provide resources to the project, executives fund the project, project managers, business analysts, and business and technical representatives are responsible for the success of the project, and project team members design and develop the solution. Stakeholders also include clients, customers, and end users of the new solution delivered by the project, as well as IT staff members who operate and maintain the technical components of the solution.

All key stakeholders will likely want to see the project be successful. However, stakeholders undoubtedly have differing perspectives, and therefore differing definitions of success. The project leadership should encourage all perspectives toward clear, measurable success criteria.

When attempting to identify project stakeholders, look for individuals or groups that are likely asking questions about their involvement in the project. Stakeholder interests typically fall into three categories: (1) interest in their contributions to the project, (2) interest in the benefits they receive as a result of the project, and (3) interest in any other effects the project is likely to have on them.

Stakeholders interested about their contributions to the project usually supply money, people, time, energy, or some other sort of resource. Stakeholders interested in what they may receive as a result of the project are likely the recipients of the new solution, including executives who want to achieve the expected business benefits provided by the solution. These two groups of stakeholders tend to be the easiest to identify, analyze, and manage.

The third category of stakeholders—those interested in any other effects the project will have on them—tends to be less obvious or visible. For example, there may be multiple groups of end users who have differing—and sometimes conflicting—requirements for the solution. Or there may be stakeholders that are ancillary to the organization undergoing change or stakeholders that are represented by someone else. Other stakeholders are not directly impacted by the project, but are competing for the same resources. Others may be involved in a subsequent project that depends on outcomes of the current project.

As the project leadership team begins to identify project stakeholders, it is helpful to first identify reliable sources of information. One source of information is the organization’s master project schedule. The master schedule should reveal what other projects are currently underway or planned for the future. The strategic plans, goals, objectives, and success measures should help determine how closely a project matches corporate goals; close alignment will hopefully encourage strong executive stakeholder support.

It is also helpful to review all corporate organization charts depicting the relationships between the different units of the company. These documents could clarify the direct and indirect business units related to a project. Finally, always fall back on basic elicitation skills, identifying obvious stakeholders and project team members early, and continue to locate other, less-obvious stakeholders throughout the requirements engineering process.

Stakeholder Categorization

After identifying stakeholders, categorize them as groups or individuals according to how they may be positively or negatively affected by the execution or completion of the project. Categorizing stakeholders also helps determine the appropriate level and type of involvement for each individual or group, and assists in developing strategies for stakeholder management. It is helpful to categorize stakeholders according to their interests. In general there are three types of stakeholders:

Project-Oriented Stakeholders—project team members who have no long-term benefits or involvement in the use of the new business solution. They must, however, have a full understanding of the business value the project is intended to add to the organization.

Business-Oriented Stakeholders—less involved in the project itself; the beneficiaries of the outcome of the project or the solution it delivers.

Project- and Business-Oriented Stakeholders—have an interest in both the successful execution of the project, and are beneficiaries of the outcome of the project or the solution it delivers.

Categorization in this manner allows the business analyst to identify project stakeholders that are likely to be highly invested in the accurate and complete definition of requirements. In his or her leadership role, the business analyst is responsible for ensuring that the outcome of the project will meet or exceed the needs of the ultimate customer and deliver the projected business value—and this cannot be accomplished without collaboration with key stakeholders.

Project-Oriented Stakeholders

Project-oriented stakeholders are focused solely on the completion of the project on time and within budget. This group includes the functional managers of the performing organization who allocate resources to the project and project team members themselves. While a project must balance the competing demands of time, cost, scope, risk, and quality, success is dependent on getting requirements right. A project-oriented stakeholder is more likely to want to reduce the scope and/or adjust the quality of the solution in order to keep the cost and schedule on track. This can be in conflict with the goals of the business analyst.

If functional managers perceive the project as productive because it is staying on time, keeping within budget, and making good use of resources, they will tend to support the project. If, however, the project begins to experience challenges, they may begin to withdraw support. Manage this group through frequent status updates with factual information. When it’s necessary to present bad news about project progress to this group, be sure to recommend a corrective action plan as well.

Business-Oriented Stakeholders

Business-oriented stakeholders own and operate the new business solution, including the members of business units impacted by the change and executives who approved and funded the initiative. These stakeholders are more aligned with the business analyst because they ultimately will have to use or leverage the new solution to provide value through the organization to the customers and shareholders to improve business performance.

Business-oriented stakeholders can be an invaluable resource to the business analyst because the business analyst continually re-examines the business case to ensure continued investment in the project is warranted during project execution. Also, the business analyst is measuring actual business benefits achieved versus costs to build and/or acquire and operate the system after deployment.

The stakeholders benefiting from the new business solution are typically interested in seeing a positive outcome from a quality standpoint. They will tend to be a close ally of the business analyst when eliciting and specifying requirements, and should be involved in key decisions affecting the quality of the new solution or the business case. This group may exert a positive influence over the other groups of stakeholders, helping to resolve disagreements about business requirements through negotiation and compromise.

Project- and Business-Oriented Stakeholders

The business analyst is likely to find strong allies in business- and project-oriented stakeholders as well. While they are involved in the project in some capacity, they also have a vested interest in the operability and sustainability of the new business solution.

This group includes the business and technical representatives assigned to the project who will operate and maintain the business and technical components of the solution after it is deployed. These stakeholders help provide the insight required to balance the competing demands of the project.

Unidentified Stakeholders

Unidentified stakeholders can cause unwelcome and adverse impacts to the project. If stakeholder groups or individuals are not identified, there may be missing or incorrect requirements. In addition, groups impacted by but not involved appropriately in the project may attempt to exert a negative influence over the project. If this happens, address the issue immediately, soliciting support from others who feel positive about the project. Managing disgruntled stakeholders requires the ability to enlist support from other stakeholders.

Best Stakeholder Management Practices for the Business Analyst

The ability to manage stakeholders can make or break a project. The following leadership practices will help business analysts partner with other key project leaders to identify and manage stakeholders effectively:

Revisit the list of stakeholders often to continually validate that no individual or group has been overlooked.

Continually validate the effectiveness of the stakeholder management strategies.

Uphold personal integrity and honesty.

After identifying key stakeholders and developing a political management strategy, work with stakeholder groups to reduce complacency, fear, and anger over the change, and to increase their sense of urgency.

Build a guidance team of supporters who have the credibility, skills, connections, reputations, and formal authority to provide necessary leadership.

Use the guidance team to develop a clear, simple, compelling vision and set of strategies to achieve the vision.

Execute a simple, straightforward communication plan using forceful and convincing messages sent through many channels. Use the guidance team to promote the vision whenever possible.

Use the guidance team to remove barriers to change, including disempowering management styles, antiquated business processes, and inadequate access to information.

Plan the delivery of the solution to achieve early successes. Wins create enthusiasm and momentum.

When the project is dependent on major deliverables from other projects currently underway within the organization, the core project team should identify and manage such deliverables. Assign someone from a core team as the dependency owner, to liaise with the team creating the deliverable. A best practice is for dependency owners to attend team meetings of the dependent project, so as to demonstrate the importance of the dependency and to hear status updates first hand.

While on the surface it may appear that project goals are shared by all, different stakeholders will likely have different and competing expectations. The business analyst should identify stakeholders who are focused on the long-term business benefits resulting from project outcomes. Doing so will greatly improve the business analyst’s ability to create a support structure within the team that has the authority and influence to ensure that the needs of the business are well understood and documented.