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Stakeholder Analysis and Management

Who is who in your client´s organization? How strong is their influence on your project? And what is their intention? Important questions – a lot projects fail due to poor stakeholder management. Active and systematic stakeholder management is key so I will give you some insights.

First rule of thumb: The more complex a project is the more important active stakeholder management becomes. Complexity in this sense means that your project becomes more dynamic and complicated at the same time (*).

Second rule of thumb: costly projects and such of strategic importance require active stakeholder management all the time. Don´t expect to be managing even a 200K EUR project without any management attention (and their associated concerns) – let alone a 1.5M EUR rollout of SAP CRM as part of a new sales strategy.

When assigned a project most project managers usually start creating a project charter, a brief project description or maybe a high level plan. Some project managers compile a business case or analyze possible risks in a project´s early stages as well. Hardly any I have met start with analyzing their stakeholders.

My advice: Managing stakeholders should begin very early in the project – basically the moment you are receiving your official project mandate. However a good project manager regularly reviews his stakeholder analyses and updates it with new findings. The stakeholder management process basically consists of three activities:

  1. Identifying stakeholders
  2. Assessing stakeholder motifs
  3. Influence stakeholders

1. Identifying stakeholders

First question is: Who is affected by my project?

If a person is a stakeholder or not is usually a question of impact. Impact can be measured in several different dimensions.

  • Political – who wins power, staff and reputation – and probably more importantly: who loses them?
  • Financial – who pays for the project? Who earns the benefits?
  • Factual – who has to change his/her behaviour, daily routine, tools, processes, etc.?

A few more concrete questions in order to give you a bit of direction:

  • Who will (have to) contribute to the project?
  • Who will „receive“ the project´s deliverables?
  • Who will profit from the project´s benefits?
  • Who will be penalized by the project´s costs and efforts?

This way you should be able to identify project team members, staff members affected by the project´s changes, managers receiving positive or negative credit and so on. Please be aware that stakeholders can be found inside and outside of your organization (e.g. customers and suppliers, shareholders, unions, etc.) and take this into your account.

Concentrate on individuals first and write their names down. Sometimes you identify interest groups sharing most probably the same attitude. You may add them next to your list of stakeholders. If a call center of 600 people is affected by a software change there is probably no use in noting each staff members name 😉

2. Assessing stakeholders

After you have identified your stakeholders the next thing you want to know is which action is required. In order to identify adequate actions you need to analyze a stakeholder´s attitude towards your project, as well as motivations and intentions. Several tools exist to do that. Each focuses on different aspects.

However if you want to analyze something you will need facts and verified information to base your analysis on. The best source of information is having a face-to-face talk about your project with every stakeholder. After the conversation make notes about your impression and use this info for putting together your assessment. You may not be able to talk to each stakeholder yourself – in this case you should simply delegate this task.

Besides face-to-face talks you can rely on meeting minutes, publications, company newspapers or other pieces of written information. Yet these sources will usually not include a direct reference to your project but display a more general view of a stakeholder. You may add hearsay to your sources of information, e.g. information from a stakeholder´s staff member or supervisor. But be careful with hearsay since people tend to hear what they want to hear and say what serves their own purposes.

The Attitude Matrix

The attitude matrix lists your stakeholders on the left side. Then you add 5 different columns headed with „–„, „-„, „0“, „+“ and „++“.

  • A double minus „–“ marks stakeholders working actively opposing you and your project. They try to stop your project and form alliances against it. They constantly question your actions and create doubt about plans, reports and concepts.
  • A single minus „-“ marks stakeholders who behave passively but are basically against your project. They may not do something but their negative talk could affect the project teams moral or negatively influence other stakeholders. Plus a passive opponent may turn into an active one depending on the circumstances.
  • A zero „0“ is for stakeholders who can basically be considered as neutral, indifferent or unconcerned.
  • Positive attitude is marked in the „+“ column if the stakeholder is not actively supporting you. In their perception your project is beneficial but does not require any further support.
  • Active supporters are marked with „++“. They support your project with manpower, budget, know-how and guidance. Keep them warm.

For each stakeholders you mark the attitude you or your team identified by placing an X in one of the columns. Add a square for those stakeholders you need to reside in specific target state.

Attitude Matrix
Mr. Stake is actively opposing the project while Mrs. Holder is all for it

 

3. Influencing stakeholders

As a project manager you need as much support for your project as possible. Pure project organizations (task forces) are extremely rare in the corporate world and most PMs end up with a matrix organization. They have to share their project staff resources with daily business and other projects. So each of your team members has a good excuse for not having finished a specific piece of work or missing a deadline.

A systematic influencing strategy aims to create the required support amongst your stakeholders inside and outside of the relevant organization. You need to influence stakeholders in such ways that:

  • Active negative stakeholders cease their activities
  • Passive negative stakeholders stop spreading negative words
  • Neutral stakeholder become positive supporters, even if not active ones
  • Passive positive stakeholders start supporting your project actively
  • Active positive stakeholders stay happy

How to do that? Well, first find out about the concerns. Again: the better (and best) way to identify someone´s concerns is to have a word with that person. Typically you will find them in the following areas:

  • Company politics (=power, staff, reputation)
  • Finance, be it either personal finance (=salary development, bonuses) or company finance (department budget)
  • Social relationships
  • Convenience

Next step is to think about an adequate leverage. Imagine a staff member has concerns in the area of social relationships: „If I work for the project I will have to spend less hours with my colleagues and I will have to meet a lot of new people.“ It would be totally inadequate to offer that person more money. Instead try to think about something socially related like: „I will help you integrate into the team by introducing you personally to everyone.“

In our example below Mr. Stake is afraid of loosing his job. You may convince him by creating a new role for him. Please be careful with this kind of topic since you need to make sure that your interventions are really credible first. So don´t promise a new role if there is none.

Stakeholder Matrix

When the leverage is clearly identified the final step is executing your stakeholder management strategy. First decide who should lever. Do you talk to someone yourself or do you need support by a supervisor or another person? Next define what measure to take. Are you going to have a talk or do you need to present some power point slides? Last but not least define until when the action needs to take place.

Stakeholder management: Done!

In this article I described a systematic approach to manager your stakeholders. I showed you how to identify the relevant individuals by asking a set of questions about your project’s impact. Next step was to assess each stakeholders current and target attitude towards your project. And finally I explained how to influence stakeholders based on their personal motivation, create systematic strategy and execute it.

One last recommendation: keep the results of your analysis secret. It is political toxic to circle this kind of analysis openly and could lead to great irritation amongst the people listed.

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(*) A lot of people use the word complex when they actually mean complicated. An SAP migration from one location to the other is complicated but not complex.

If you include the selection of possible outsourcing partners in the project it may become complex since you suddenly have to deal with different stakeholders and their interests within your own company and outside. Some might say the project gets a „political touch“ – which I think is not wrong to say.

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