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Project Management Partners-Improving organizational performance through better project management

Managing Your Stakeholders

William R. Duncan 

One of my favorite cartoons features a harried customer service representative muttering: "If only these customers would leave me alone, I'd be able to get some work done around here!" I suspect that many project managers have uttered a similar mutter: "If only these stakeholders would get their priorities straight, we'd be able to make some real progress!"

There's no doubt about it: managing your stakeholders can be difficult. But it can be done, and it must be done if you want to maximize the degree of both real and perceived success on your projects.

Let's begin by defining the term—a stakeholder is any individual or organization whose interests are affected by the project, or who believes that its interests may be affected. Interests may be financial or non-financial, positive or negative, and may be affected during the project or upon completion. For example, if your neighbor decides to build an addition, you are a stakeholder. Your non-financial interests may be negatively affected during the project by construction noise while your financial interests may be positively affected at the end of the project by an increase in the value of your home.

Most projects will have numerous stakeholders, so the first step in managing them is to know who they are. At Project Management Partners, we use the following categories to help our clients identify their stakeholders:

Creators—the individuals who actively participate in the work of the project. Creators include doers and managers, employees and contractors, part-timers and full-timers.

Funders—the individuals or organizations who provide financing. Most projects will have a single source of funds, but some will have many. Funders (also called sponsors) may be external as when a bank provides construction financing or internal as when the CFO budgets money to improve Organizational Competence in Project Management (OCiPM)™.

Customers—those who will use the product of the project. Customers may also be external (a buyer of the project's product or service) or internal (a salesperson using the new sales tracking system).

Dependents—those who want something from the project other than the final product of the project. Typically, dependents are other projects or functional units that need one of the interim deliverables.

Sustainers—groups responsible for supporting the product after the project is done. Sustainers typically include other functional units such as manufacturing, technical support, logistics, maintenance, customer service, and product management.

Auditors—the individuals or organizations, internal or external, who will provide independent testimony that the project is in compliance with applicable standards. This category is more than just a financial audit: it includes management audits, quality control, due diligence reviews, and regulatory bodies.

In-laws—the individuals or organizations whose interests are affected by the project, but who will not typically have any direct contact with the project. For example, your organization's senior managers are in-laws. In-laws are especially important to consider because so many of them have the potential to change the course of the project.

Once you have identified your stakeholders, the next step is to learn precisely what their expectations are. The best way to do this is to get them together in a room and ask them how they will measure success on your project (see " Defining and Measuring Project Success ").

On some projects, it may be impractical to get all the stakeholders in a room together. For example, one of our clients is an environmental consulting firm. One of their real estate development projects could affect thousands of residents and hundreds of businesses. While they can't get everyone together all at once, they do work very hard to solicit input from these potential derailers through well-publicized public meetings.

As you solicit input from your stakeholders, you will almost always elicit conflicting priorities. Time to market is critical to one stakeholder; functionality is vital to another. The most reliable approach is to engage your stakeholders as partners by facilitating a discussion about priorities to help them develop a strategy that satisfies everyone to some extent. When we facilitate such discussions, we are constantly amazed at how cooperative and creative reputed curmudgeons become when someone actually listens to them.

One of our clients is a commercial software developer. As we helped the core team develop a project plan for their next release, they were chagrined to discover that the current feature set was going to take seven months longer than their original ballpark. Based on that projection, we gathered the key stakeholders, and they concluded that a timely release with a reduced feature set was better than delivering the full product at a much later date.

The development staff had expected the sales and marketing representatives to be difficult. They turned out to be enthusiastic supporters of the new approach because they had been involved in its development.

Managing your stakeholders is an investment that clearly pays off. The key to success is to treat them as partners, to engage them in decision making, and to keep the lines of communication open. Stakeholders are people too!