Each one of us is surrounded by people, for example, families, friends, coworkers, or clients. These people are affecting our lives in a positive or a negative way that shapes our personality as well. This kind of relationship with people needs a proper communication and management since this communication takes a big percentage of our life. Some studies point that we spend an average of 70% of our day listening to others and an average of 30% speaking to them.
Similarly, strategic planning, architecture, project management, and other fields are powered by people, people who envision, plan, analyze, design, manage, execute, operate, …etc. Communication with those kinds of people should be managed effectively to ensure that every person not only informed but also involved and contributing to the process whatever it is. We mainly aim to those people as the stakeholders.
In this article, we will discuss who are the stakeholders, and why managing them is important, and how we should do that.
A stakeholder is defined as:
“A person, group or organization that has interest or concern in an organization.”
In project management, it can be defined as:
“Stakeholder is either an individual, group or organization who is impacted by the outcome of a project. They have an interest in the success of the project, and can be within or outside the organization that is sponsoring the project.”
In Enterprise Architecture, it can be defined as
“An individual, team, or organization (or classes thereof) with interests in, or concerns relative to, the outcome of the architecture. Different stakeholders with different roles will have different concerns” The Open Group
According to those definitions, they share the same meaning in different contexts, that these stakeholders have some concerns and interests, they can affect or be affected by the actions and goals of the process. For example, let us assume that you are delivering a software project for a customer, the stakeholders can be the users who will use the system, the business users who are engaged to share their vision and goals, the system administrators who will manage the system, also the team who are developing the software. That’s why identifying the stakeholders is a critical process to have a successful delivery in any context and how can we manage their concerns to keep them satisfied.
Types of stakeholders
There are 3 types of stakeholders as shown the figure below:
- Internal stakeholders are those within a company who can be concerned with ownership, investment, working environment, employment, …etc. Internal stakeholders include employees, managers, board members, CXOs, and investors.
- Connected stakeholders are those that have an economic or contractual relationship with the organization. Connected stakeholders include suppliers, partners, advisers, and others.
- External stakeholders are those that have quite diverse objectives and have varying ability to ensure that the organization meets their objectives. External stakeholders include society, government, media, and others
Placing and identifying these examples of stakeholders at which type and who should be considered or not, will be according to the business context. So, you can, for example, only affect the internal stakeholders if you offer training services for organization employees while it can be argued that it will have other effects on other types of stakeholders but I think this will be a slight effect.
You can find other types as well, for example, primary and secondary stakeholders, direct and indirect stakeholders. I think this will be an outcome of stakeholder identification.
Why stakeholder management?
The drivers to manage the stakeholders can be as below
Each stakeholder can have a concern or more, these concerns are transformed to different requirements which will affect the scope of the project and its handover process. Neglecting or avoiding a stakeholder can have a negative impact on delivery, incomplete requirements, or unsatisfied customers.
It is important to involve the stakeholders to get some insights about organization directions, its vision, goals, pipeline projects. In many cases, projects failed because they were not aligned with the organization strategy or the strategy has been changed. The management and engagement of stakeholders can decrease the chances of that misalignments and can turn these projects to align more with the new directions.
Business broader effect
Sometimes we know the business knowhow but we may not have the same deep knowledge and understanding as the internal stakeholders who operate this business daily. We can learn from them about the other extended stakeholders, like connected and external stakeholders, for example, many of organization should follow specific laws and regulation they need to follow, it is essential that we deliver to them the projects with considering how to comply with these existing laws and regulations. Without the engagement with the stakeholders, the knowledge of these laws and regulations can be missed or misunderstood.
Management of stakeholders and make them involved not only will ensure successful delivery but it will reduce risks and uncertainty of other things we did not consider and can be highlighted by the stakeholders.
Managing them will reduce also the risk of resistance in handovers and the risk of the misalignment with their concerns and the organization directions
Extended free resources
Sometimes stakeholders are considered as free resources can do the work with you, that’s why you need to know how to manage them and keep them interested to that extent, how they will be involved and what will they gain from these involvements.
According to each stakeholder type and their interest, power, influence, ..etc, they need special tactics and strategies to not negatively impact the project. What are the actions need to be taken if we have a stakeholder who does not like the work we are doing, who is resisting the project itself, who thinks that the software will replace his work!
These types of challenges need to be managed effectively as it can impact any process, for example, enterprise architecture process, sales process, project management process, and others.
How to manage stakeholders?
Stakeholders management is a process of 5 steps as per the figure below
According to the context, stakeholders identifications can be done by various techniques, for example, analyzing the organization structure, brainstorming session, interviewing the interested stakeholders and ask them.
We need to identify who can be affected or affect our work whatever it is sales process, a project, or consultation services. We should ask ourselves:
- Who can be affected by this work?
- Who can affect this work?
- Who has the power of change?
- Who has the power of influencing others?
- Who are the current users?
- Who are the current process owners?
- Who are the current providers?
- Who is the client of our client?
- What are the motives for them?
- What is the organization structure?
And a lot of other questions can be added as well
It is about digesting the collected information and start to do some classification and prioritization, to do that we will need stakeholder matrix like the one below which is adapted from TOGAF with some modifications.
|Stakeholder||Stakeholder Role||Ability to Disrupt Change||Current understanding||Required understanding||Current Commitment||Required Commitment||Required Support||Current status||Concerns|
|External||Name 1||Government Regulator||H||M||H||L||M||H||Critic||Compliance with regulations|
Training on new tools
After we analyze our stakeholder we need to map them to Power/Interest grid as shown at the image below, for example, the first stakeholder here has a high power to disrupt the change and his current status is critical with a low level of commitment but we need this stakeholder support for this project. So, we need to manage this stakeholder closely and make sure that we communicate all changes and updates to this stakeholder. The stakeholders can have 5 status; Advocate, supporter, neutral, critic, and blocker, you will need to change their status through the process.
Power / Interest Grid
As we can see the stakeholders can be mapped to 4 positions:
- High power, highly interested people (Manage Closely): they need full engagement and satisfaction.
- High power, less interested people (Keep Satisfied): you need to understand their interests to make them satisfied and do not obstruct your delivery.
- Low power, highly interested people (Keep Informed): they are very helpful and you can use them to be the change agents as well for others, so you need to keep them involved and updated.
- Low power, less interested people (Minimal Effort): monitor and keep watching these people, while you don’t have to do much effort in that.
After analyzing these stakeholders, you need to prepare the list of actions you should do according to the grid position, for example, we can do the following
|Name 1||Compliance with regulations||Manage Closely||Sharing the project vision
Sharing the technology used
Sharing how the project comply with different standards and regulation
Conduct awareness session
|Name 2||Training on new tools||Keep Satisfied||Sharing users training plan, the curriculum, training paths
Sharing the knowledge transfer methodology
Perform the action
At this step, you will need to perform the planned actions from the previous step. Make sure that they are involved as per your selected communication approach and to gain their trust. Moreover, you need to be sure that their concerns have been satisfied and they have a better understanding than before.
Repeat and improve
At the last step and after you performed the actions required for each stakeholder, you will need to repeat the process again and make sure that the different levels have been changed, for example, the status for stakeholder name 2 to become Advocate or neutral instead of a blocker. And the level of understanding and commitments, for example, reached the way you need for the project support and successful delivery. Moreover, you need as well to stabilize the good levels you already have with other stakeholders.
Stakeholder management is essential for any business whatever is the context, It is healthier for the organization to manage the stakeholders effectively and make sure that they are supporting the change they are doing. I believe that without engagement, involvement, dedication, and support of the stakeholders the level of uncertainty will be higher than expected and can lead to failure.