CHAPTER 17

Stakeholder Management for Project Success

RANDALL L. ENGLUND, EXECUTIVE CONSULTANT

In recent years, it has become increasingly evident that projects struggle when project leaders fail to pay attention to the needs of all project stakeholders as well as the needs of the project itself. To ensure or increase the probability of successful project outcomes, it is important to work with the people who will make it happen. Thus, in 2013, the Project Management Institute added project stakeholder management to the standard as the tenth knowledge area.¹ For those who have long recommended more focus on people and less on tools in the project management arena, this is a welcome and long overdue addition.

WHO ARE OUR STAKEHOLDERS?

A stakeholder is anyone who has a “stake in the ground” and cares about the effort—sponsoring the change, supplying, or executing it. Stakeholder management is about identifying, establishing, and maintaining relationships and adapting to changes. A stakeholder management plan consists of identifying key participants, understanding their expectations and motivations, defining what project success looks like, managing conflicts that arise, and engaging, aligning, and influencing stakeholders throughout the project life cycle.

STAKEHOLDER ANALYSIS

Identifying stakeholders early on leads to better stakeholder management throughout the project. Use diagnostic tools and identified traits of key powerful people to analyze stakeholders. Ask, “Who could stop this effort?” Table 17-1 is an example of a stakeholder register or stakeholder analysis template.)

To be thorough, visualize all stakeholders as points on a compass. To the north is the management chain; direct reports are to the south. To the west are customers and end users; other functional areas are to the east. In between are other entities, vendors, or regulatory agencies. Identify all players. Write down names and get to know people in each area. What motivates them, how are they measured, and what are their concerns?

Use a stakeholder engagement assessment matrix (Table 17-2) to record starting and ending points for stakeholders within a stakeholder management plan.

Approach a stakeholder analysis using these steps:

1. Who are the stakeholders?

• Brainstorm to identify all possible stakeholders.

• Identify where each stakeholder is located.

• Identify the relationship the project team has with each stakeholder in terms of power and influence during the project life cycle.

2. What are stakeholder expectations?

• Identify primary high-level project expectations for each stakeholder.

3. How does the project or products affect stakeholders?

• Analyze how the products and deliverables affect each stakeholder.

• Determine what actions the stakeholder could take that would affect the success or failure of the project.

• Prioritize the stakeholders, based on who has the most positive or negative effect on project success or failure.

• Incorporate information from previous steps into a risk analysis plan to develop mitigation procedures for stakeholders who might negatively impact the project.

4. What information do stakeholders need?

• Identify from the information collected, what information needs to be furnished to each of them, when it should be provided, and how.

Prepare an action plan for using a stakeholder “map” to resolve potential issues. That plan might include actions such as the following:

• Face-to-face meetings with every middle level manager, explaining the project mission and objectives, and getting them to share their real needs and expectations.

• Sessions with all middle managers, using “mind-mapping” techniques to brainstorm ideas and get suggestions and real needs from various perspectives, leading up to a more aligned vision for the project.

• Identifying and avoiding barriers like organizational climate, perceptions, customer pressure, and too many communication links.

Approach stakeholders in each area starting from the position of strength. When, for instance, power is high but agreement about the project is low, start by reinforcing the effective working relationship that exists and how the person may contribute to and benefit from the project. Express desire that this bond will help work through any differences. Only after establishing agreement on these objectives is it then appropriate to address the problem area. People often jump right into the problem. This prompts defensive behavior from the other person. Taking time to reestablish rapport first can prove far more effective in reaching a mutually satisfying solution. It is then possible to discover misinformation or negotiate a change in outcome, cost, or schedule that lessens the levels of concern and increases people’s support of the project.

To illustrate, a customer says to the project manager, “I’m okay with most of your status reports, but I have a big problem with progress on resolving the resourcing issue.” Most people only hear the problem and immediately jump into defensive mode. Instead, start with, “I hear that you’re satisfied with how we implemented your requests and can continue moving forward. Is that correct? Great! Okay, so now we only have this one issue to work through. . . .” The tenor of this approach is positive, the topics on the table for discussion are bounded, and rapport is present, setting the stage for a creative solution.

CONFLICT

Stakeholders’ competing interests are inherently in conflict. Upper managers and customers want more features, lower cost, less time, and more changes. Accountants mainly care about lower costs. Team members typically want fewer features to work on, more money, more time, and fewer changes.

Conflict is natural and normal. Too little, however, and there is excessive cooperation—“Whatever the group wants.” Too much, and there is excessive conviction—“My mind’s made up.” These represent the flight or fight extremes of human behavior. The ideal is to create constructive contention where the attitude is “Let’s work together to figure this out.” This middle ground happens when:

• A common objective is present to which all parties can relate.

• People understand how they make a contribution.

• The issue under discussion has significance, both to the parties involved and to the organization.

• People are empowered to act on the issue and do not have to seek resolution elsewhere.

• Everyone accepts accountability for the success of the project or organizational venture.

For example, a materials engineering manager was in a rage and called the task force project manager to complain about how the project was proceeding. The project manager asked the other manager to come talk with him in person. Rather than putting up a defensive shield to ward off an upcoming attack, the project manager started the meeting by reviewing the project objectives and eliciting agreement that developing a process with consistent expectations and common terminology was a good thing. He next asked the materials manager about his concerns. He found out that inserting cross-check steps early in the process would ensure that inventory overages would not happen when new products were designed with different parts. This represented a major contribution to the project. These individuals were empowered to make this change, which would have significant impact because all projects would be using the checklists generated by this project. Rather than creating a political battle, the two parties resolved the conflict through a simple process, the project achieved an improved outcome, and the two parties walked off arm in arm in the same direction.

Start any new initiative or change that affects stakeholders by thinking big but starting small. First implement a prototype and achieve a victory. Plan a strategy of small wins to develop credibility, feasibility, and to demonstrate value. Get increased support to expand based on this solid foundation.

DEFINE PROJECT SUCCESS

Make a listing of all success and failure factors from previous project experiences. Take a high-level view and identify what thread runs through all key factors identified. What they have in common is that they all are about people. People do matter.

Projects typically succeed or fail depending on how well people work together. When you lose sight of the importance of people issues, such as clarity of purpose, effective and efficient communications, and management support, then you are doomed to struggle. Engaged people find ways to work through all problems. The challenge of leaders is to create environments for people to do their best work.

The list usually brings out a bountiful harvest of definitions for project success as well as what causes them to fail. Meeting the constraints of scope, schedule, and resources is just a starting point. Sometimes you can be right on these constraints and still fail to be successful, perhaps because the market changed, or a competitor outdid you, or a client changed his mind. You could also miss on all constraints but still have a successful project when viewed over time. It is important to get all requirements specified as accurately as possible; it is also important to be flexible since needs and conditions change over time or even when more becomes known about the project as it progresses.

Here is a suggested overarching criterion for project success: check with key stakeholders and ask them for their definitions of success. Pin them down to one key area each. Some surprising replies may surface: “Don’t embarrass me.” “Keep me out of the newspaper.” “Just get something finished.” There may even be conflicting responses. The job is to integrate the replies and work to make them happen. Having this dialogue early in the project life cycle provides clear marching orders—and forewarning about what is important to key stakeholders. An objective of this discussion is to tailor success expectations to organizations and to specific stakeholder expectations.

Perceptions about project success are relative and real. One manager states, “About the perception that the project had been successful, this ‘perception’ was stronger than any other factor, such as work completed, cost, measureable return of investment, et cetera. It appeared as though the actual work performed and the end result were by-products of the opinions of stakeholders and end users.”

Having identified that success or failure is all about people, the goal now is to learn how to be better leaders and managers of people, not just of projects. Embrace the tenets of becoming a complete project manager, developing skill sets adapted from multiple disciplines.²

AUTHENTIC LEADERSHIP IN ACTION

How do you create an environment that achieves results, trust, and learning instead of undermining them? To get stakeholders working collaboratively, consider ways for them to receive more value from this effort: the project provides means to meet organizational needs; they have more fun; the experience is stimulating; they get more help and assistance when needed; they get constructive feedback; they are excited by the vision; they learn more from this project; their professional needs are met; they travel and meet people; it’s good for their careers; together they’ll accomplish more than separately; this is neat. . . .

Ways to demonstrate authentic leadership in action:

• Say what you believe.

• Act on what you say.

• Believe and demonstrate that being trustworthy is a priority.

• Avoid “integrity crimes” where people feel violated by actions not consistent with words.

• Involve team members in designing strategic implementation plans.

• Align values, projects, and organizational goals by asking questions, listening, and using an explicit process to link all actions to strategic goals.

• Foster an environment in which project teams can succeed by learning together and operating in a trusting, open organization.

• Develop the skill of “organizational awareness”—the ability to read the currents of emotions and political realities in groups. This is a competence vital to the behind-the-scenes networking and coalition building that allows individuals to wield influence, no matter what their professional role. Tap the energy that comes from acting upon the courage of convictions—from doing the right thing—and from being prepared.

For example, a contractor came to the project manager’s office, made demands about resources on the project, and left. This was out of character, for the two people had formed a close relationship. The project manager decided not to act on the critical demands that could have severe negative impact on project relations. Later he sought out the contractor and found him in a different mood. The contractor confessed he was told by his company to make those demands. By correctly reading the emotional state and assessing that something below the surface was going on in that transaction, the project manager was able to work with the other person, keep the issue from escalating, and find a solution.

Leaders who commit “integrity crimes” shift the burden away from a fundamental solution to their personal effectiveness. Trust cannot develop under these conditions. Leaders either get into problems or else tap the energy and loyalty of others to succeed.

In systems thinking terms, this is a classic example of a “shifting the burden” archetype, in which a short-term fix actually undermines a leader’s ability to take action at a more fundamental level. When under pressure for results, many project managers resort to the “quick fix”—a command and control approach, which on a surface appears to lessen the pressure. This has an opposite effect on the people they want to influence or persuade. These people do not do their best work, so more pressure is felt to get results.

A more fundamental solution is to develop skills of persuasion. Help people come to believe in the vision and mission and aid them in figuring out why it is in their best interest to put their best work into the project. Use Table 17-1 to help analyze their interests and concerns. People usually respond positively to this approach and accomplish the work with less pressure.

Tools of persuasion include the following:

• Reciprocity: Give an unsolicited gift. People will feel the need to give something back. Perhaps a big contract, or maybe just another opportunity to continue building a strong relationship.

• Consistency: Draw people into public commitments, even very small ones, and enforce those commitments. This can be very effective in directing future action.

• Social validation: Let people know that this approach is considered “the standard” by others. People often determine what they should do by looking at what others are doing.

• Liking: Let people know that we like them and that we are likable too. People like to do business with people they like. Elements that build “liking” include physical attractiveness, similarity, compliments, and cooperation.

• Authority: Be professional and personable in dress and demeanor. Other factors are experience, expertise, and scientific credentials.

• Scarcity: Remember just how rare good project management practice is, not to mention people who can transform a very culture. This applies to the value both of commodities and information. Not everyone knows what it takes to make a program successful.

To summarize the science and practice of persuasion, it usually makes great sense to repay favors, behave consistently, follow the lead of similar others, favor the requests of those we like, heed legitimate authorities, and value scare resources.³

To assess effective practices and apply a simple tool for stakeholder analysis, consider these steps:

1. Identify basic leadership traits and their consequences.

2. Assess and compare leadership approaches in complex situations.

3. Apply a shifting-the-burden structure to create a positive culture.

4. Appreciate the value of authentic leadership and commit to act with integrity.

DOCUMENT A STAKEHOLDER MANAGEMENT PLAN

A stakeholder management strategy usually comprises these elements:

• A stakeholder register

• Stakeholder engagement assessment matrix

• A communications plan, including communications requirements (see Chapter 14)

• Change management and change control plans to assess and mitigate the impact of change to the stakeholders and project

• Training and development of stakeholders’ skills when appropriate

• Stakeholder relationship management strategy

People are driven by different motivations. To keep stakeholders engaged and aligned, track, monitor, and document progress and challenges (issues), have procedures for following up on progress and completion of tasks, challenges, and issues resolved. Rather than looking at managing stakeholders as an irritation, be aware of and honor the sensitive nature of a stakeholder analysis. Recognize that everyone involved in the project has valid concerns and meaningful hopes for the work you undertake together.

ENVISION A SUCCESSFUL, COOPERATIVE ENVIRONMENT

A vision for project stakeholder management is for all persons to cooperate willingly and productively, applying standard project management techniques, and operating in project-based organizations. Achieving this state requires forming a dream of what it would be like: Project managers would be like current department managers. Upper managers would be an integral part of the project management process. The organizational building block would be the team. Therefore, upper managers would function as members of upper management teams. Project positions would be based on influence, which is based on trust and interdependence. Any one project would be part of a system of projects, not pitted against one another for resources but rather part of a coordinated plan to achieve organizational goals and strategies. This means project managers would themselves be a team. The upper manager’s team would develop the organization structure and lead the project system, or project portfolio. Trust would be supported by open and explicit communication. Upper managers would oversee a project management information system to answer questions and provide information on all projects. There would be less emphasis on rules but a strong emphasis on organizational mission to guide action. There would be clear relationships between individual jobs and the mission. A process for taming project chaos would be based on linking projects to strategy, a focus on values and direction, the free flow of information, and organizing to support project teams.

CONCLUSION

Implement a stakeholder management strategy whose goal is to engage, align, and proactively influence all stakeholders. Clearly define project success, according to each key stakeholder. Identify and document stakeholder characteristics in a stakeholder register. Proactively manage conflicts that arise, knowing that those conflicts represent engaged participants. Develop persuasive skills. Be trustworthy, authentic, and act with integrity. With positive reinforcement, stakeholders will have a positive influence on the project and contribute to its success.

REFERENCES

¹ Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK^® Guide), 5th edition (Newtown Square, PA: PMI, 2013).

² Randall Englund and Alfonso Bucero, The Complete Project Manager: Integrating People, Organizational, and Technical Skills (Vienna, VA: Management Concepts Press, 2012).

³ R.B. Cialdini, Influence: Science and Practice, 4th edition (New York: Pearson Allyn & Bacon, 2000).