Today, we will discuss stakeholder engagement in project management.
Until the fifth edition of the PMBOK Guide, the PMI was referring to the topic as stakeholder management, but in the sixth edition, they replaced the term “management” with “engagement.” The institute found that the word “engage” is more appropriate than “manage.”
Stakeholder engagement is a vast subject, and providing you with every possible bit of information is likely impossible. So, in this blog post, I will be giving a brief on the process.
Let’s dive in.
Stakeholder engagement is a process of identifying, analyzing, planning for, and then managing interested parties to garner their support for your project.
This system helps you find stakeholders or groups with a key role in your project, so you can develop a strategy to manage them.
Stakeholder engagement is vital to your success. This is how you understand stakeholder expectations, fulfill their requirements, and complete the project with minimal obstruction. You should aim to use resources efficiently.
Stakeholders can be internal or external, and you have to interact with them throughout the project lifecycle. When the interested groups or individuals feel respected and honored, they will support you.
You should be proactive while engaging with stakeholders. Stakeholders as opportunities, not threats.
How to Carry Out Stakeholder Engagement
Communication is the primary stakeholder management tool. The PMI’s 2013 Pulse of the Profession report asserts that “the most crucial success factor in project management is effective communication with all stakeholders.”
In project management, planning communications and engaging stakeholders are two closely related processes. Plan Communication Management outlines how each stakeholder should be communicated with according to their requirements.
Stakeholder engagement has four processes:
- Identify project stakeholders.
- Plan stakeholder engagement.
- Manage stakeholder engagement.
- Monitor stakeholder engagement.
Identify Project Stakeholders
In this process, you identify your project stakeholders. This starts from the moment the project charter is signed and ends when the project is finished.
This is how the project management team identifies key stakeholders, analyzes them, and prioritizes them according to their power/influence/interest on the project.
You can use the following tools to identify your stakeholders:
This is a continuous process, and you can carry it out as necessary. If the project is multiphase, conduct this process at the beginning of each phase.
The output is the stakeholder register which contains information Like stakeholder identification, assessment, and classification.
Plan Stakeholder Engagement
Planning stakeholder engagement lets you define your approach to engaging stakeholders based on their power, influence, interest, impact, and more.
This process provides you with a detailed plan for managing each stakeholder and the betterment of your project.
The following tools are helpful in the plan stakeholder engagement process:
- Expert judgment
- Data analysis technique (assumption and constraints and root cause analysis)
- Decision making
- Data representation technique
Planning stakeholder engagement is a continuous process, and you have to execute it as necessary.
Conduct this process at the beginning of each phase of a multiphase project.
You can also repeat the process when you observe a change in the attitude of stakeholders, as new key stakeholders are identified, or if there is a change in your organization.
The output of this process is a stakeholder engagement plan that includes strategies to engage individuals or groups of stakeholders. It can be highly detailed or broadly defined depending on the project’s requirements and the expectations of stakeholders.
Power Interest Grid
The power/interest grid is one of the most important tools in this process and helps you define your strategies.
From the grid, you can conclude that:
- The high-power and high-interest group should be managed with the utmost care.
- High-power and low-interest stakeholders should be kept satisfied.
- The low-power and high-interest stakeholders should be kept informed.
- The low-power and low-interest groups require the least effort; they should only be monitored.
Always continue monitoring your stakeholders for status change. You never know when a low-power stakeholder will become high-power and influential. Likewise, a powerful stakeholder may become less influential in a later stage.
Manage Stakeholder Engagement
The manage stakeholder engagement process helps you fulfill their expectations and requirements. This is the process where you interact with stakeholders and earn their trust and support.
You can use the following tools:
- Expert judgment
- Communication skills
- Interpersonal skills (conflict management, negotiation, etc.)
- Ground rules
The outputs are project document updates, project plan updates, and change requests.
Key Skills for Managing Stakeholder Engagement
Stakeholders have different expectations, goals, values, and knowledge, so there are bound to be conflicts. The project manager has to resolve or reduce these conflicts by enforcing ground rules, clear role definition, communication planning, and solid project management practices.
Conflict is not always harmful.
With an open mind, the project manager can use disputes to improve team performance. It is the uncontrolled quarreling that has the potential to rip the project apart.
People-oriented conflicts could affect team cohesiveness and relationships, leading to absenteeism, attrition, and ultimately failure.
Using a direct collaborative approach, you can address issues early and in private.
Acknowledging cultural differences between individuals and groups helps minimize misunderstandings and miscommunications.
Stakeholders feel honored when you acknowledge their individuality and differences.
This is about collectively winning. Things that can be negotiated in stakeholder management are workers’ pay, host community compensation, resources, and more. Project management advises ADR (Alternative Dispute Resolution) as a better option than prolonged litigation.
We are all in a political environment, and sensitivity is important. You must be aware of the political reality of your surroundings. You need to acknowledge who pulls power and influence and develop appropriate communication plans to manage them.
This is the foundation of effective communication. The project team will listen to and understand the voice of stakeholders, process the information, and respond correctly. When stakeholders feel listened to, they will support you and the project.
Ensure Quality of Information
Information given to stakeholders must be correct, reliable, and verifiable. Incorrect information can affect trust and confidence.
Relationships are key; developing relationships result in increased trust, which in turn means better stakeholder experience.
Ensure Communication Requirements are Met
Every stakeholder’s requirements are different, and some of them may have access to classified information.
For project sponsors, it is more of performance reporting; for regulatory agencies, it is an audit/compliance report. Local authorities need information such as social or corporate responsibility correspondence.
How to Communicate
One-to-one discussion is the most effective communication method to get stakeholder buy-in. Reserve this process for a handful of highly influential stakeholders.
The meeting is the next best communication method.
A project has different meetings, such as retrospective, project kick-off, sprint planning, and reviews. In a corporate setting, town-hall meetings help engage several stakeholders at once.
Meetings have many benefits, including developing trust, clarifying issues, brainstorming, redefining risks, addressing resource challenges, and giving explanations.
Stakeholder engagement is not a one-time process; it is a continuous commitment to project success. Agile development approaches have established the need for ongoing customer relationships.
You must be accessible. In the UK, extensive and early engagement in the local community and council spared the project to reconstruct the Victoria Bridge from reputational loss, delays, and public disruption.
Monitor Stakeholder Engagement
Here, you monitor and control your stakeholder engagement. You can update, modify, and tailor the plan as required.
This process ensures that you are following your stakeholder engagement plan and reaffirm its effectiveness.
This process can use the following tools:
- Data analysis
- Decision making
- Communicating and interpersonal skills
The key outputs are document updates, project management plan updates, change requests, and work performance information.
The Purpose of Stakeholder Engagement
The purpose of stakeholder engagement is to gain support. You should aim to minimize the negative impact and maximize the positive effects. You can change negative stakeholders into positive ones with a proper strategy. Successful stakeholder engagement ensures a fruitful project.
Stakeholder engagement can be broadly defined, or it can be thorough. Small projects can have an informal strategy, but bigger projects must have a detailed, well-documented plan.
Pay more attention to your negative stakeholders. They are the ones who can jeopardize your project’s success. However, if you manage them proactively, their impact may become positive.
A stakeholder management strategy is a necessary part of your planning. Without it, you will face many issues, and you may fail.
Example of Stakeholder Engagement
A few years back, an automobile company tried to open a manufacturing plant in India. They collaborated with the state government and bought the land.
The plant was almost completely built when the local farmers, who used to own the land, became agitated. They started making new demands, and the opposing parties supported them.
Distress spread throughout the state. Finally, the company had to transfer the facility to another owner. This caused the company a massive loss and embarrassment to the state government.
The automotive company did not consider local stakeholders. The outcome would have been different if the farmers had been involved.
This is an example of poor stakeholder engagement.
Start managing your stakeholders from the very beginning of the project. They will work with you, and you may face fewer problems accessing resources.
It is imperative to understand the needs of your stakeholders. Regular communication will help them understand your requirements and feel connected to the project.
The stakeholder management plan may have sensitive information. Do not share this document and keep it in a secure place.
Benefits of Stakeholder Engagement
Stakeholder management is important for your project’s success. It helps you get the stakeholders’ buy-in.
Here are a few benefits of stakeholder engagement:
- Keeps stakeholders satisfied by fulfilling their expectations and requirements.
- Avoids scope creep and mitigates issues that may cause problems for the project.
- Ensures that you receive full cooperation from the stakeholders with minimal obstruction.
- Mitigates local disruptions and the problems that could cause reputational damage to your organization.
Project management is all about satisfying stakeholder needs and requirements. They can be a threat or an opportunity. Winning the support of negative stakeholders is crucial for your project’s success. Stakeholder engagement should start from the early stages. If you fail to do so, your project may fail.
This topic is important from a PMP exam point of view, therefore, understand it well.
How do you engage your stakeholders in the projects you manage? Please share your thoughts in the comments section.