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Tuesday, 13 December 2011

Stakeholder Management

A stakeholder is anyone who is affected either positively or negatively by the cost, time, scope, resources, quality, or risks of your project.

Most businesses have a variety of stakeholder groups which can be broadly categorized as follows:
Stakeholder groups vary both in terms of their interest in the business activities and also their power to influence business decisions.  Here is a useful summary:

Identify Stakeholders:
One of the first things you’ll do when you start a project is figure out who your stakeholders
are and write down their goals and expectations in a Stakeholder Register.

The stakeholders are identified from the below sources:
  • Project Charter (Who will be funding the project)
  • Enterprise Environmental Factors (Organization stakeholders)
  • Organizational Process Assets (From previous projects and lessons learn)
  • Procurement Documents (Suppliers and Vendors)
  • Project Management Plan (Employees)

Stakeholder Analysis:
Stakeholder Analysis is a critical tool in this process. You need to interview all of the stakeholders you can find for your project and find out the value the project has for them. As you sit with stakeholders,
you’ll identify more people to interview. During Stakeholder Analysis you can divide your stakeholders into groups based on their level of involvement and need for communication. When you understand
what motivates all of your stakeholders, you can come up with a strategy to make sure that they’re told about the things that they find important, and that they’re not bored with extraneous details.

There are multiple category of models available, some of them:
  • Power/Interest grid
  • Power/Influence grid
  • Influence/Impact grid
Power/Interest grid is widely used tool in stakeholder analysis & it is used in assessing stakeholders. In this model, each stakeholder is mapped to different quadrant based on their interest on the project against the influence (power) they have over the project.

High power, interested people: these are the people you must fully engage and make the greatest efforts to satisfy.
High power, less interested people: put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
Low power, interested people: keep these people adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the detail of your project.
Low power, less interested people: again, monitor these people, but do not bore them with excessive communication.

Stakeholder Register:
The stakeholder register is usually associated with project communications and identifies the project stakeholder. It usually includes basic contact information, who they report to (this is an important group of stakeholders as well), and notes about their interests and positions on the project. Add to this information about the communications they will receive and how often, and you have a pretty good communications plan.
Stakeholder Management Strategy:
The stakeholder management strategy is the approach developed to deal with the stakeholders in the best interest of the project. The strategy should include the following elements:
  • Key stakeholders
  • For each stakeholder,level of influence on the project and level of impact on the stakeholder from the project
  • How to manage individual stakeholders
  • How to manage groups of stakeholders

For example you can maintain the strategy in a matrix like the table shown below:

Interest on the
Level of Influence
Positive or negative
Strategy for maximizing support or minimizing negative impact

Managing stakeholders expectations:
There are a lot of people involved in making most projects happen: the team that actually does the work, the people who pay for it, everybody who will use the product when you’re done, and everybody who might be impacted by the project along the way. Those people are called your stakeholders. And a big part of the PM’s job is communicating with everybody and making sure their needs are met.

An effective stakeholder management process is the guarantee that timely and relevant feedback is
provided and that the steering of the change effort is made according to the stakeholder management strategy. The project manager takes responsibility for managing stakeholder expectations, resolving conflicts and detecting and settling any issues arising during the project course.

The three aspects of managing stakeholders expectations are:
  1. Know your stakeholders
  2. Know what you are supposed to deliver from the perspective of the stakeholder
  3. Hold your stakeholder accountable to the realities of the project

The picture below explains the process:

Managing stakeholders’ expectations is crucial for project success because it keeps their expectations in line with the project goals, objectives, and requirements in the project management plan. Otherwise, their definition of success will be different from your definition of success, and the project will fail in their eyes even if it succeeded according to the project management plan.


  1. "Hi There,

    Very Nice post on PMP Notes.That was very helpfull.keep posting"

  2. This comment has been removed by the author.

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