Week 4: Project Stakeholders

Project stakeholders have been recognised as critical to the success of projects in recent years. Increasing emphasis on project stakeholders features in the most recent version of the Project Management Body of Knowledge, more strongly than it has in previous versions because a failure to manage stakeholders effectively is thought to have been a frequent cause of project failure. This week we will look at the management of project stakeholders as it is covered by the PMBOK. We will also look at analysis techniques that can be used in stakeholder management.

The following video provides a simple introduction to the concept of stakeholders and how their perception of a situation (or project) may vary:

The PMBOK

The PMBOK’s treatment of stakeholders involves five major processes. We will examine these as an example of a project management methodology’s approach to project stakeholder management.

The first  of the major processes is to identify stakeholders. This is done through examination of the project charter and project documentation. Analysis, discussed more fully later in this post, may be undertaken to identify and understand the motivation and influence of stakeholders and as a result of this, a register of stakeholders will be created that lists and describes the stakeholders and their intersts will be developed.

The following video discusses stakeholder identification:

The second major process in project stakeholder management is to Plan Stakeholder Management. The stakeholder register and project management plan are used, along with the specific enterprise factors and organisational processes to determine the strategy that will be used for stakeholders. This results in the  creation of a stakeholder management plan for the project and updates to other project documentation that arise as a result of the creation of the stakeholder management plan. The following video looks at project communications:

The third major process is to Manage Stakeholder Engagement. This involves interaction with the stakeholders as the project proceeds using the Stakeholder Management Plan and the Communications Management Plan for the project. Project managers will need solid interpersonal skills and management skills as well as skills inm a range of communication methods in order to engage stakeholders effectively. Engagement of stakeholders may result in changes in other aspects of the project and so require the creation of change requests and updates to theproject management plan and other project documentation.

Encana’s work with stakeholders is profiled in the following video:

The fourth major process is  to Control Stakeholder Engagement. In this process information about the progress of the project from the project management plan, issue log, work performance data and other project documentation is scrutinised and discussed in order to determine any actions that need to be taken in engaging with stakeholders as the project proceeds. Information management systems will be used, along with the judgement of experts. Meetings of appropriate project people will discuss and decide on action to be taken. This can result in the production of information to stakeholders on the performance of the [project, change requests to the project team, updates to theproject management plan and updates to other project documentation

The following video summarises ‘seven secrets’ of stakeholder engagement:

Andy Kaufman argues that stakeholder management is critical to project success:

The following video is an example of a presentation on how project stakeholders will be managed in a broadband project in Australia:

Stakeholder Mapping

Newcombe (2003) describes a process for stakeholder mapping. This process is intended to categorise different types of stakeholders and identify the strategies that will be most effective in dealing with each category. His article is based on the understanding that there are more stakeholders than the project client that need to be managed. These stakeholders have different levels of interest in and power over the project and different expectations that the project manager must manage. The article is based on the construction industry and is equally applicable across business sectors.

It is recognised that there are multiple stakeholders with multiple interests and objectives. Project management in this context is a political process where there is a need to deal with these competing demands on the project. At the same time, there is a growing expectation in society that people will be able to participate in issues and events that effect them and with that, involvement in projects that effect them.

The project manager has a responsibility to maintain stakeholder support throughout the project in order to minimise the impact that they may have in negatively influencing the project. In doing this the project manager will seek to achieve a common culture that will focus on the promotion of common values that will encourage people to work together in the interests of the project. They will also need to deal with the political issues in the project – the conflicts between stakeholders.

The article describes an example of project stakeholder management in a construction project in Swindon town centre in the UK. The following graphic illustrates the stakeholders involved:

Classification of stakeholders is based on how likely they are to influence the project and how much power they have to do this. The combination of these factors is the possible impact that they will have on the project. Two matrices are described in the article – the power / predictability matrix and the power / interest matrix.

The power / predictability matrix is divided into four quadrants as the following graphic shows. This matrix combines the amount of power that stakeholders have with the extent of the predictability of their behaviour.

The quadrant that each stakeholder appears in will determine how they need to be managed. For example, a stakeholder that has a low level of power and is highly predictable is likely  to cause the project manager few problems. Similarly, a stakeholder with a high level of power and high level of unpredictability is likely to pose the greatest danger to the project and may also provide the most opportunities for a positive contribution to the project if their behaviour is unpredictably positive.

The following chart illustrates this matrix for the Swindon project:

The interest / power matrix conducts the same exercise comparing the interest that stakeholders have in the project with the power that they have to influence it. The following graphic shows this matrix:

In this chart we can see that the key players (and those that must be managed most carefully) are those with the highest level of interest and power in the project. The following chart illustrates this in the Swindon project:

These processes of stakeholder mapping enable stakeholders to be categorised and resources focused on their management appropriately. Some may argue that this approach to stakeholder management is manipulative in that it is designed to deal with concerns that people have with the project so that it can be completed successfully. However, it may also be argued that the processes involved in stakeholder management give voice to stakeholder concerns and provide a means for them to be incorporated in the project where appropriate. Overall, the greater good may be served.

The final video on this topic is an example of a similar stakeholder categorisation approach within business more generally:

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