What is a Stakeholder? How to Identify, Analyze and Manage Project Stakeholders.

As project management has grown as a profession over the years, we’ve seen that projects may vary widely in scope, cost, and timelines. While there is great variety in these areas, projects also share a similarity in many other areas. One area in which all projects share similarity is the area of stakeholders and stakeholder management. What is a stakeholder? Who is a stakeholder? How do we identify and manage stakeholders? The answers to these questions are an important part of successfully managing any project regardless of its complexity.

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One of the first steps in project management planning is the identification of stakeholders. In order to accomplish this, you need to understand what a stakeholder is. Loosely defined, a stakeholder is a person or group of people who can affect or be affected by a given project. Stakeholders can be individuals working on a project, groups of people or organizations, or even segments of a population. A stakeholder may be actively involved in a project’s work, affected by the project’s outcome, or in a position to affect the project’s success. Stakeholders can be an internal part of a project’s organization, or external, such as customers, creditors, unions, or members of a community.

Depending on the complexity and scope of a project there may be very few or extremely large numbers of stakeholders. A project may be a part of a city or county public works department and may include all members of the community as stakeholders and number in the thousands. In determining what a stakeholder is, it is important that we consider anyone who may fall into any of these categories. As we move on toward stakeholder identification we must analyze the project landscape and determine what individuals or groups can influence and affect the project or be affected by its performance and outcome.

So what is a Stakeholder? Stakeholders can be:

  • The project manager, sponsor, and team
  • The customer (individual or organization)
  • Suppliers of material or other resources
  • Creditors
  • Employees
  • Unions
  • City, community, or other geographic region
  • Professional organizations
  • Any individual or group impacted by the project
  • Any individual or group in a position to support or prevent project success
  • Internal or external; local or international

Stakeholder Identification

So now we have answered the question: what is a stakeholder? The next step is to use this knowledge to answer the question: who is a stakeholder? This question is answered during the stakeholder identification process. Stakeholder identification is the process used to identify all stakeholders for a project. It is important to understand that not all stakeholders will have the same influence or effect on a project, nor will they be affected in the same manner. There are many ways to identify stakeholders for a project; however, it should be done in a methodical and logical way to ensure that stakeholders are not easily omitted. This may be done by looking at stakeholders organizationally, geographically, or by involvement with various project phases or outcomes.

Another way of determining stakeholders is to identify those who are directly impacted by the project and those who may be indirectly affected. Examples of directly impacted stakeholders are the project team members or a customer who the project is being done for. Those indirectly affected may include an adjacent organization or members of the local community. Directly affected stakeholders will usually have greater influence and impact of a project than those indirectly affected. While these details are developed and analyzed further in the Stakeholder Analysis process, it is important to begin thinking about them now and helps provide a systematic way to identify stakeholders.

An outcome of identifying stakeholders should be a project stakeholder register. This is where the project team captures the names, contact information, titles, organizations, and other pertinent information of all stakeholders. This is a necessary tool during Stakeholder Management and will provide significant value for the project team to communicate with stakeholders in an organized manner.

Stakeholder Analysis

Now that you’ve conducted the Stakeholder Identification process you should have a comprehensive list of all of the project stakeholders. If you’ve used one of the approaches we’ve discussed you should also have them grouped by geographic region, organization, project involvement, or whether or not they’re directly or indirectly impacted by the project. While stakeholder analysis is done for each individual stakeholder, these groupings are helpful in determining the level of detail required in this process.

The stakeholder analysis process requires a close look at each stakeholder to gather more in depth information in order to understand their impact, involvement, communication requirements, and preferences. Is this stakeholder organized? Are they a cohesive organization? Do they support this project or are they critical of it? How influential or powerful are they? Do they prefer to be notified via phone call or email? How often? What is this stakeholder’s interest in this project? These are the types of questions that must be answered in order to provide a complete analysis. Usually a chart or table is used to capture all of this information with stakeholders’ names listed one per row and a list of column headings addressing the types of questions asked above.

Many times a project team will create the stakeholder analysis by using the stakeholder register and simply adding a greater level of detail to each entry. It is recommended to leave these documents separate and create a stakeholder analysis independent of the register. The analysis may contain information that should not be distributed freely to all of the stakeholders as the register should be. In addition to the general information contained in the stakeholder register, the stakeholder analysis contains.

Stakeholder Management

Stakeholder Management is where you will use all of the information you’ve collected and develop a strategy to manage stakeholders. No matter how much you plan or how invested you are in a project, poor stakeholder management can easily cause a project to fail. It is a key component of executing and completing a successful project. A large portion of stakeholder management focuses on communication.

The cornerstone of stakeholder management is understanding who needs what information and when or how often they need it. There will also be stakeholders who support the project and those who may either be opposed to it or who present obstacles to the project’s success. Your stakeholder management strategy must be geared toward maintaining support from those who are in favor of the project while winning over those opposed or at least mitigating the risks they may present.

The questions you’ve asked and answered about each stakeholder in the Stakeholder Analysis process are your guide for how to interact with each stakeholder and satisfy their individual requirements. By determining how powerful a stakeholder is and whether or not they support or oppose the project will allow the project manager to create a strategy for communicating and working with that stakeholder to ensure project success. Some stakeholders may require little interaction or communication while some require nearly constant communication. Stakeholder Management is where these strategies are developed and executed. If a stakeholder is opposed to a project maybe it is because they seek more involvement or awareness and the project manager can work with that individual to win their favor and support.

By understanding what a stakeholder is and using a thorough and systematic approach to Stakeholder Identification, Analysis, and Management, a project manager can significantly improve his or her chances of success. As projects become more complex and involved, so does managing their stakeholders. It is easy to lose track or omit key project players and by not properly utilizing these processes and tools project managers will lose their ability to effectively communicate with stakeholders in a manner necessary to ensure a successful project.