1. business and industrial
2. business operations
3. management
4. project management

Effective Project
Stakeholders Management
Presented by Dr. Tony Prensa, PMP
For NWA PMI Chapter
February 2014
Project Stakeholder Management
Agenda
Project Success Parameters
Current Facts!
Literature review
Project Stakeholder Management Processes
Identify Stakeholders
Plan Stakeholder Management
Manage Stakeholder Engagement
Control Stakeholder Engagement
Concluding thoughts
Q&A
References
Adjourn
According to an IBM study, only 40% of projects meet schedule, budget and
quality goals. Further, they found that the biggest barriers to success are
people factors.
Geneca, a software development company, noted from its studies that ‘fuzzy
business objectives, out-of-sync stakeholders and excessive rework mean
that 75% of project participants lack confidence that their projects will
succeed.’ A truly stunning 78% of respondents reported that the “Business is
usually or always out of sync with project requirements”
McKinsey recently found that ‘while an increasing number of non-IT
executives give IT a score of 61% for basic services like email and laptop
support, only 26% rank IT high in the most vital area of proactively engaging
with business leaders on new ideas or systems enhancements.’
One Canadian study actually stated: “Bad communications between parties
are the cause of IT project failures in 57% of cases they studied.”
KPMG New Zealand found ‘…and incredible 70% of organizations have
suffered at least one project failure in the prior 12 months and 50% of
respondents indicated that their project failed to consistently achieve what
they set out to achieve.’
Retrieved from: http://faethcoaching.com/it-project-failure-rates-facts-andreasons/, 2/10/14
Literature Review
R. Edward Freeman (1984)
Father of Stakeholder Theory
Stakeholder theory is about identifying the groups who
are stakeholders in a corporation and need to be
managed
"Principle of Who or What Really Counts”
Suggests to put stakeholders' needs at the
beginning of any action
The quality of relationships with stakeholders are
the key determinant of corporate reputation
Stakeholder management is the core of public
affairs management
Symmetric and asymmetric communication
theory is relevant to stakeholder management
Literature Review (cont.)
Study shows a strong correlation between project
communication and project stakeholders’
commitment.
Lack of stakeholder commitment is listed as a key
cause for project failure.
It is caused because of inefficient project communication
and inadequate project information.
Clarity of project information fosters commitment
among stakeholders.
Effective project communication makes workers
feel that they are cared
Boosts their commitment to undertake tasks.
Effective project communication creates a feeling
of responsibility and
attachment between a stakeholder and the project tasks.
The study suggests that project managers should
ensure efficient project communication
Project team members cannot be committed to projects
unless they have clear project goals.
(Nangoli, Namagembe, Ntayi, & Ngoma, 2012)
Literature Review (cont.)
A project stakeholder management process – Six Steps
Plan
1.
2.
3.
4.
5.
6.
Identify
Define the purpose
Identify
Analyze
Communicate
Strategize
Evaluate
Analyze
Communicate
Act
(Karlsen, 2002)
Follow up
Literature Review (cont.)
Project Stakeholder Analysis/Strategies
Potential for collaboration
with the project
H
Mixed
blessing
Nonsupportive
L
L
Project Stakeholder Strategies
Supportive
H
Marginal
Potential to affect the
project
Project Stakeholder Categories
Potential for collaboration
with the project
H
L
(Karlsen, 2002)
H
L
Collaborate
Involve
Defend
Monitor
Potential to affect the
project
Literature Review (cont.)
Management of project stakeholders is one of the
most important tasks for a project manager because
project’s success depends upon many individuals
Trust is viewed as essential for stable relationships
and vital for the maintenance of cooperation
Trust enables cooperative behavior,
Promotes adaptive organizational forms, reduces damaging
conflicts and transaction costs, and promotes more effective
responses to crisis
Trust is something that must be earned over time by
listening, talking and making sure that you “walk the
talk”.
The study results show that the parties should be
aware of how trust is built in relations
Which factors are important in building trust.
Emphasis should be put on improving communication
skills
Behaving reliably, showing commitment, being sincere,
benevolent and competent, having and acting with integrity,
working towards reaching project milestones and establishing
common goals.
Clarify the roles and responsibilities in the beginning of
the project.
(Karlsen, Græe, & Mona, 2008)
Literature Review (cont.)
The model for trust building in a project-stakeholder
relationship
Reliable
behavior
Project
Good
communication
Commitment
Integrity
Trust
Factors
Factors
Goal
congruence
Sincerity
Competence
Benevolence
Reaching project
milestones
Stakeholder
(Karlsen, Græe, & Mona, 2008)
Literature Review (cont.)
Stakeholder theory
To identify, classify and categorize stakeholder and understand
behavior
Manage stakeholder more strategically
Understanding project stakeholders needs and
requirements
Is key for project success.
Lack of understanding of internal/external project
stakeholders and their interests
Might impact project success.
Carefully consider external stakeholders and their
influence on projects
The external stakeholder environment involves all external
stakeholders of the project and relationships between them.
Interpretation model: Scan and collect data; analyze and
interpret data; make decisions and take action (Aaltonen,
2011)
Openness, dialogue and active engagement of
stakeholders, in the front-end phases of the project
Reduce conflict in the project execution phase.
(Aaltonen, 2011)
Literature Review (cont.)
“Effective project managers require keen analytical and intuitive skills to identify
stakeholders and work with them to understand their expectations and influence upon
project success. This facilitates managing a process that maximizes stakeholder positive
input and minimizes any potential detrimental impact” (Jepsen & Eskerod, 2009, p.2).
Stakeholder
Area of
interest
Stakeholder
Contributions
Active
Opposition
Expectations
Power
Responsible
Stakeholder Register
Passive
Opposition
Suppliers
Neutral
Passive
Support
Active
Support
XO
Top
Management
Peers
Strategy
O
X
O
X
Grumbler
Stakeholder commitment
matrix
O
X
X = current position, O = necessary/wanted position
(Jepsen & Eskerod, 2009)
Project Stakeholder Management
Project stakeholders
The definition
Individuals,
groups,
or
organizations who may
affect, be affected by, or
perceive themselves to be
affected by a decision,
activity, or outcome of a
project.
(PMI, 2013)
Press/Media
Financial
Controlling
Organizations institutions
Client/
customers
End Users
Suppliers/
Contractors
Competitors
Public
Authorities
Sponsor
Project
Project Team
Project Manager
Performing
Organization
Labor
Unions
Insurance
Companies
Third Parties
Consultants/
Advisers
Line
Organizations
Subject Matter Experts
Project stakeholders
It is critical for project success to
identify the stakeholders
Early in the project or phase and to analyze
their levels of interest, their individual
expectations, as well as their importance
and influence.
This initial assessment should
reviewed and updated regularly.
be
Classify stakeholders according to their
interest, influence and involvement in
the project.
Project manager should focus on the
relationships necessary to ensure the
success of the project
Project Stakeholder Management
the definition
Processes required to identify the people,
groups, or organizations that could impact
or be impacted by the project,
To analyze stakeholder expectations and their
impact on the project,
and develop appropriate management
strategies
to effectively engaging stakeholders in
project decisions and execution.
I am the
PM
Stakeholder management also focuses on
continuous communication with
stakeholders:
to understand their needs and
expectations,
addressing issues as they occur,
managing conflicting interests and fostering
appropriate stakeholder engagement in
project decisions and activities.
Stakeholder satisfaction should be
managed as a key project objective.
(PMI, 2013)
Project Stakeholder Management
Project stakeholder
management is designed to
encourage the use of
proactive project
management for limiting
stakeholder activities that
might affect the project
negatively, and to assist the
project team’s ability in taking
advantage of opportunities to
encourage stakeholder
support of project goals.
(Karlsen, Græe, & Mona, 2008)
Vital to develop an understanding that can
generate appreciation and trust and lead
to constructive
working relationships.
Efficient management of the relationship
between the project and its stakeholders
is an important key to project success.
The project and its stakeholders can be
viewed as a network
in which the actors interact with each other
and exchange information, resources, and
results.
Stakeholders ultimately determine
whether a project is a success, based
on the project results.
Project Stakeholder Management
the processes
Identify
Stakeholders
Plan Stakeholder
Management
Manage
Stakeholder
Engagement
Control
Stakeholder
Engagement
• To identify the people, groups, or organizations that could impact or be impacted by a
decision, activity, or outcome of the project.
• To analyze and document relevant information regarding their interests, involvement,
interdependencies, influence, and potential impact on project success.
• To develop management strategies to effectively engage stakeholders
throughout the project life cycle, based on the analysis of their needs,
interests, and potential impact on project success.
• To communicate and working with stakeholders to meet their
needs/expectations, address issues as they occur, and foster
appropriate stakeholder engagement in project activities throughout
the project life cycle.
• To monitor overall project stakeholder relationships, and adjusting
strategies and plans for engaging stakeholders
(PMI, 2013)
The key benefit of this process is that it allows the
project manager to identify the appropriate focus for
each stakeholder or group of stakeholders.
Inputs
• Project
charter
• Procurement
documents
• Enterprise
environment
factors
• Organizational
process assets
Tools &
Techniques
• Stakeholder
analysis
• Expert
judgment
• Meetings
Outputs
• Stakeholder
Register
(PMI, 2013)
Who is threatening the target of this project?
Who is most dependent on this project?
Has there been a similar project in the market? If so, to what extent did it
succeed?
Who was in charge and how did local stakeholders respond?
Who possesses claims – including legal jurisdiction and customary use – over
the project/resources at stake?
Is any government departments to be involved in this project?
Are there national and/or international bodies involved in this project
because of specific laws or treaties?
Who are the people or groups most knowledgeable about, and capable of
dealing with the project at stake?
Are the stakeholders and their interests stable across the globe or is there any
identifiable pattern exists?
Are there major events/trends/activities currently affecting the stakeholders?
Is this project replaceable by other project(s)?
“Stakeholder analysis increases the project manager’s ability to anticipate opportunities and
problems for the project at a time when the project team still has time and opportunity for
maneuvering” (Jepsen & Eskerod, 2009, p.1).
To systematically gathering and analyzing
quantitative and qualitative information to
determine stakeholders’ interests.
To
identify interests, expectations, and
influence of the stakeholders and relates them
to the purpose of the project.
To identify stakeholder relationships that can
be leveraged to build coalitions and potential
partnerships to enhance the project’s likelihood
of success.
K now
Y our
S takeholders
How key stakeholders are likely to react or
respond in various situations, in order to
plan how to influence them to enhance
their support and mitigate potential
negative impacts.
Assess
Identify
Stakeholder
Analysis
All potential project stakeholders and
relevant information (roles, departments,
interests, knowledge, expectations, and
influence levels.
The potential impact or support each
stakeholder could generate, and classify
them so as to define an approach strategy.
Analyze
Who is directly responsible for decisions on issues
important to the project?
Who holds positions of responsibility in interested
organizations?
Who is influential in the project area (both thematic and
geographic areas)?
Who will be affected by the project?
Who will promote/support the project, provided that they are
involved?
Who will obstruct/hinder the project if they are not involved?
Who has been involved in the area (thematic or geographic)
in the past?
Who has not been involved up to now but should have
been?
Power/Interest grid
Grouping stakeholders based on level of authority
(“power”) and concern (“interest”) regarding the project
outcomes.
Power/Influence grid
Grouping the stakeholders based on level of authority
(“power”) and involvement (“influence) in the project.
Influence/Impact grid
Grouping stakeholders based on involvement
(“influence) and their ability to effect changes to the
project’s planning or execution (“impact)
Salience Model
Describing classes of stakeholders based on their
power, urgency, and legitimacy
High
High
•B
Manage
Closely
Keep
Satisfied
•A
•H
•F
Power
•C
•G
Monitor
•D
Low
Low
Low
Keep
Informed
•E
Interest
High
Expert Judgment
To ensure comprehensive identification and listing of stakeholders:
Senior management
Other units with the performing organization
Identified key stakeholders
Experienced project managers
Subject matter experts
Industry group and consultants
Professional and technical associations
Meetings
Profile analysis meetings are project meetings designed to
develop and understanding of major project stakeholders, and
they can be used to exchange and analyze information about
roles, interests, knowledge, and the overall position of each
stakeholder facing the project
Plan stakeholder management
The process of developing appropriate management strategies to effectively
engage stakeholders …
To provide clear, actionable plan to interact with project stakeholders to support the
project’s interests.
Inputs
• Project
management
plan
• Stakeholder
register
• Enterprise
environmental
factors
• Organizational
process assets
Tools &
Techniques
• Expert
judgment
• Meetings
• Analytical
techniques
Outputs
• Stakeholder
management
plan
• Project
documents
updates
(PMI, 2013)
Contains life cycle selected for the project and the processes
that will be applied to each phase
Contains description of how work will be executed to
accomplish the project objectives
Contains description of how human resources requirements will
be met and how roles and responsibilities, reporting
relationships, and staffing management will be addressed and
structured for the project
Contains the change management plan that documents how
changes will be monitored and controlled
Contains need and techniques for communication among
stakeholders
Stakeholder engagement throughout the project life
cycle is critical for success.
Engagement level of stakeholders can be sorted as
follows:
Unaware – unaware of project and potential impacts
Resistant – aware of project and potential impacts and
resistant to change
Neutral – aware of project yet neither supportive nor
resistant
Supportive – aware of project and potential impacts and
supportive to change
Leading – aware of project and potential impacts and
actively engaged in ensuring the project is a success
Stakeholder engagement assessment matrix
Stakeholder
Unaware
Stakeholder 1
C
Stakeholder 2
Stakeholder 3
C – current engagement
D – desired engagement
Resistant
Neutral
Supportive
D
C
D
D, C
Leading
The stakeholder management plan
It is a component of the project management plan and
identifies the management strategies required to
effectively engage stakeholders. It should contain at
least:
Desired and current engagement levels of key
stakeholders
Scope and impact of change to stakeholders
Identified interrelationships and potential overlap between
stakeholders
Stakeholder communication requirements for the current
project phase
Information to be distributed to stakeholders, including
language, format, content, and level of detail
Reason for the distribution of that information and the
expected impact to stakeholder engagement
Time frame and frequency for the distribution of required
information to stakeholders
Method for updating and refining the stakeholder
management plan as the project progresses and develops
Manage stakeholder engagement
The process of communicating and working with stakeholders to
meet their needs/expectations, address issues as they occur, and
foster appropriate stakeholder engagement in project activities.
Inputs
• Stakeholder
management
plan
• Communications
management
plan
• Change log
• Organizational
process assets
Tools & Techniques
• Communication
methods
• Interpersonal
skills
• Management
skills
Outputs
• Issue log
• Change requests
• Project
management
plan updates
• Project
documents
updates
• Organizational
process assets
updates
(PMI, 2013)
Manage stakeholder engagement entails:
Engaging stakeholders at appropriate project
stages to obtain or confirm their continued
commitment to the success of the project
Managing stakeholder expectations through
negotiation and communication, ensuring project
goals are achieved
Addressing potential concerns that have not yet
become issues and anticipating future problems
that may be raised by stakeholders
Clarifying and resolving issues that have been
identified
Why the communication management plan?
It provides guidance and information
on managing stakeholder expectations:
Stakeholder communications
requirements
Information to be communicated,
including language, format, content, and
level of detail
Reason for distribution of information
Person or groups who will receive
information
Escalation process
Management stakeholder engagement
tools and techniques
Communication methods
The methods of communication identified for each stakeholder in
the communications management plan. The project manager
decides how, when, and which of these methods are to be used in
the project.
Interpersonal skills
Building trust
Resolving conflict
Active listening
Overcoming resistance to change
Management skills
Facilitate consensus toward project objectives
Influence people to support the project
Negotiate agreements to satisfy the project needs
Modify organizational behavior to accept the project outcomes
Organizational process assets updates
Stakeholder notifications
About resolved issues, approved changes, and general project status
Project reports
Project status, lessons learned, issue logs, closure reports, and outputs
from other knowledge areas.
Project presentations
Provided to project stakeholders
Project records
Correspondence, memos, meeting minutes, and other documents
describing the project
Feedback from stakeholders
Concerning project operations can be distributed and used to modify or
improve future performance of the project
Lessons learned documentation
Includes root cause analysis, corrective actions, other types of lessons
learned about stakeholder management.
Control stakeholder engagement
The process of monitoring overall project stakeholder relationships and adjusting
strategies and plans for engaging stakeholders.
The key benefit of this process is that it will maintain or increase the efficiency and
effectiveness of stakeholder engagement activities as the project evolves and its
environment changes.
Inputs
• Project management
plan
• Issue log
• Work performance
data
• Project documents
Tools & Techniques
• Information
management
systems
• Expert Judgment
• Meetings
Outputs
• Work performance
information
• Change requests
• Project management
plan updates
• Project documents
updates
• Organizational
process assets
updates
(PMI, 2013)
Concluding thoughts
Project managers have to ensure that they communicate the project
information that is required at the different stages (Nangoli,
Namagembe, Ntayi, & Ngoma, 2012).
Project managers should build good relations with the stakeholders
who are identified as being most crucial for the end result (Karlsen,
Græe, & Mona, 2008).
Trust is important for building a well-functioning relationship (Karlsen,
Græe, & Mona, 2008).
Project success is tied to effectively communicating and managing
relationships with the various stakeholders of the project. This makes
stakeholder management an important issue in project management
(Assudani & Kloppenborg, 2010).
Project manager should make deliberate attempts to exert influence on
project stakeholders so that they deliver their contributions to the
project (Jepsen & Eskerod, 2009.
Keep in mind that stakeholders are critical for your success!
Questions and Answers
Aaltonen , K. (2011). Project Stakeholder Analysis as an environmental interpretation process. International Journal of Project
Management , 29 (2011) 165-183.
Assudani, R., & Kloppenborg, T. J. (2010). Managing stakeholders for project management success: an emergent model of stakeholders.
Journal Of General Management, 35(3), 67-80.
Karlsen, J. T., Græe, K., & Mona, J. M. (2008). Building trust in project-stakeholder relationships. Baltic Journal of Management, 3(1), 722. doi:http://dx.doi.org/10.1108/17465260810844239
Karlsen, J. T. (2002). Project Stakeholder Management. Engineering Management Journal, 14(4).
Jepsen, A. L., Eskerod, P. (2009). Stakeholder analysis in projects: Challenges in using current guidelines in the real world. International
Journal of Project Management , 27 (2009) 335-343.
Project Management Institute. (2013). A guide to the project management body of knowledge (pmbok® guide) – fifth edition [ebook].
Retrieved from CTU Online Library http://wow.coursesmart.com/C001850000035/firstsection#
X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTkzNTU4OTY3OS9j
Nangoli, S., Namagembe, S., Ntayi, J. M., & Ngoma, M. (2012). Towards building project-stakeholder commitment. World Journal of
Entrepreneurship, Management and Sustainable Development, 8(4), 233-245.
doi:http://dx.doi.org/10.1108/20425961211276615
Effective Project
Stakeholders Management
Presented by Dr. Tony Prensa, PMP
For NWA PMI Chapter
February 2014