Master stakeholder management: Your guide to project success

Introduction

Every successful project has a secret ingredient: stakeholder management. 

The truth is, that projects rarely thrive in a vacuum. They exist within a complex ecosystem of stakeholders, individuals, and groups with varying levels of interest and influence. From executives and clients to team members and community groups, their expectations and needs can make or break your project’s success.

This is where mastering stakeholder management comes in. It’s the art and science of understanding, engaging, and influencing stakeholders throughout your project journey. It’s about navigating their unique perspectives, building trust and collaboration, and proactively addressing their concerns.

In this comprehensive guide, we’ll equip you with the tools and techniques you need to become a stakeholder management pro.

What is stakeholder management?

Stakeholder management is the process by which you manage, organize, and improve the relationship you hold with your stakeholders. This process includes identifying your stakeholders, understanding their needs, expectations, and demands, and implementing them in the project progression. 

Stakeholder management will help you prepare a roadmap to identify the right stakeholders, and effectively incorporate them into your daily project progress. This will help you build quality relationships with your stakeholders. 

Team members and employees are influenced by the outcome of the project. Hence, they become an integral part of stakeholder management. 

Why is stakeholder management important?

Stakeholder management plays a crucial role in the overall success of the project. Effective stakeholder management is like a ‘guiding light’ throughout the project. 

Let’s explore the key importance of stakeholder management:

1. Brings in expertise

Stakeholder management helps you bring added expertise to your projects. Stakeholders have vast knowledge in comparison to your project managers. This ‘extra’ knowledge will provide you with the necessary direction for completing your project. 

2. Lowers the risk

With effective stakeholder management, you will have to face lower risks. This is because you can involve expert opinions in every stage of the project progression. When you have an effective plan for involving your stakeholders, you can mitigate concerns and issues with ease. By solving such issues on time, you can ensure the successful and timely completion of the project. 

3. Build stronger relationships and enhanced engagement

Stakeholders tend to participate in every minute detail of the project progressions. This is where you need effective stakeholder management to streamline their participation. You need to incorporate an effective channel for seamless engagement and building strong relationships. This helps you with the smooth progression of the project. 

4. Lowers the overhead cost 

Stakeholders fill up the vacancies and the shortcomings in the project progression. They are aware of the nitty-gritty details of the project methodology. Stakeholders fill the void by providing both knowledge and resources necessary for the project at that particular time. This ensures that you can save on the overhead cost of resources and knowledge. 

Stakeholder management in project management

Stakeholder management in project management is the process of building organized channels for communication with stakeholders and realistically managing their expectations. 

Project managers manage key aspects of the project including stakeholders and stakeholder management. This bridge helps in managing the interest and the influence of the stakeholders in the project.

Read more – the best business project management guide to refer to in 2024

Why stakeholder management is important in project success

Stakeholder management is important to ensure that the project meets the expectations of the stakeholders. Stakeholders play a key role in shaping the success of the project. When your stakeholders are aware of the timely progress and updates in the project, the chances of major roadblocks and rework are lowered. 

Further, with structured stakeholder management in project management, the overall result from the project satisfies the requirements and expectations of all the entities. This ensures completing the project on time and with the expected quality. By involving stakeholders in different stages of the project you can effectively minimize the chances for project failure. 

What is a stakeholder management plan?

Stakeholder management plan refers to the formal documents that contain the details of various stakeholders and the role they play in the project. This plan defines and categorizes different stakeholders based on their involvement in the project.

A stakeholder management plan should generally be created during the start of the project. This helps in keeping all stakeholder expectations transparent and aligning the overall performance of the involved entities. It is important to note the differences between a stakeholder management plan and a project management plan.

Before getting into the detailed steps of creating a stakeholder management plan, let us understand the key components of the plan.

1. List of stakeholders

A quick rundown of the various stakeholders in a project. 

• Product manager
• Project managers
• Front-end designers
• Back-end designers
• Marketers
• Directors
• Sponsors
• Investors 

These are the major categories of stakeholders, although there can be more or fewer stakeholders as per the project. 

2. Roles and responsibilities

Once you identify the stakeholders involved in a particular project, you need to define the roles and responsibilities of each stakeholder precisely. When you define the specific roles of each stakeholder, it becomes easy to streamline their role and the expectations of different stakeholders. 

3. Communication channels

A stakeholder management plan can be executed effectively only when communication channels are defined. This includes setting up methods of communication, the frequency of interaction, and the information that will be shared. Defining all such variables helps in building an effective stakeholder management plan.

4. Level of interest

Different stakeholders have different levels of interest in the overall project performance. You need to identify their role of interest and classify them based on “low” to “high”. This will help you maintain effective relations with different stakeholders as per their level of involvement. 

How to create a stakeholder management plan

In this section, we will explore the detailed steps to build an effective stakeholder management plan. Each step is an actionable process and forms a step-by-step approach. 

1. Identifying the stakeholders

Building a stakeholder management plan starts with identifying the stakeholders. Different projects have different stakeholders who have an interest in that particular project.

For instance, consider the list of stakeholders that I mentioned above, in a project that involves remodeling the home page of a website, the front-end designers will be involved as major stakeholders. However, if the project is about re-working the database, the backend designers will be involved as major stakeholders. 

2. Document the involvement of various stakeholders 

Stakeholders play a crucial role in the overall performance of the project. However, when creating a stakeholder management plan, you need to define the involvement of various stakeholders in the project. This documentation is necessary as it keeps track of the roles and responsibilities of various stakeholders. 

This step should be specific to various stakeholders so you can define each stakeholder’s role in the project’s day-to-day activities. This should include general activities like daily standups to important features like product launches and delivering working products. 

3. Prioritize the involvement of various stakeholders

Categorize the involvement of various stakeholders into different categories. This could be in the form of “low”, “medium”, or “high”. This will help you as well as the other stakeholders to identify how much different entities are interested in the overall success of the project. 

It is important to note here that the designation does not necessarily influence the level of interest of the stakeholders in the project. Prioritizing various stakeholders directly depends on the value they add to the project. 

4. Establish communication channels 

Communication channels play a key role in keeping various entities on the same page. When you define the channel you will use for communication, it makes the process simple by eliminating confusion and unorganized transfer of information on multiple platforms. 

After deciding on the communication channel, you need to decide on the frequency of interaction too. Documenting this step is necessary to eliminate unwanted interruptions and build a smooth platform for project completion. 

5. Share the plan with stakeholders

Once you build a stakeholder management plan, it is essential to make the document easily accessible to all stakeholders. The stakeholder management plan should be easily accessible to every stakeholder involved with that particular project. 

Creating a transparent platform ensures that every different entity is aware of the typical progression and performance of the project. This will ensure that no information is overlooked and everyone is on the same page. 

6. Incorporate feedback

As soon as you share the stakeholder management plan with the involved stakeholders, there can be changes needed by different entities. This could be in the form of their involvement or the frequency of interaction. 

You can take in feedback from the different stakeholders and make the necessary changes in the stakeholder management plan. By incorporating these changes, you can effectively fulfill the expectations of various stakeholders. 

7. Resolve conflicts 

Conflicts arise when multiple stakeholders are involved. This is because what is important for one entity may not hold equal importance to another. There are chances where different team members are not comfortable with the role they are assigned in the project. 

This is where your conflict management and resolution skills come in. Addressing and resolving conflicts early ensures that there are no significant delays in the project. 

Read more – 7 big project management conflicts & ways to solve them all

Stakeholder management best practices

Now that you have understood the concept of documenting a stakeholder management plan, let us explore the best practices in stakeholder management. 

Having technology for assistance is the key. The software will help you manage stakeholders with ease. In the below steps, I have mentioned the actionable steps, how ProofHub an an all-in-one project management and team collaboration tool can be handy in different stages of stakeholder management along the project lifecycle. 

1. Define stakeholders with precision

Choose the necessary stakeholders for your project with care. When you onboard extra stakeholders, there is an influx of too many iterations. Similarly, a shortage of stakeholders will hamper the smooth progression of projects. 

Defining the role and responsibilities of every stakeholder will ensure equal contribution and seamless project progression. At this stage, you need to ask two questions simultaneously: 

1. Does this project require additional stakeholders?
2. What value does a particular stakeholder add to the project?

Both these questions will help you in defining the stakeholders precisely needed for a particular project.

2. Involve stakeholders at the right time 

Ensure that your stakeholders do not come up with suggestions and conflicts at random instances. You need to set up an effective time frame and communication channel to streamline the process. 

Stakeholders coming up with the right message at the right time will enhance the overall quality of the project. This is critical for the overall smooth functioning of the project. 

3. Communicate regularly and consistently

Set up a time frame and a communication channel that will help streamline the communication between the stakeholders and the management. An effective system should ensure quick and timely communication, ensuring minimum time spent in resolving conflicts and other issues. 

With ProofHub you can clearly define communication channels with ease. ProofHub provides you with a built-in chat for quick communication. This further organizes communication on the platform and eliminates the need for multiple platforms and tools. This ensures that the expectations of every stakeholder are fulfilled in the project lifecycle. 

4. Establishing transparency

The stakeholder management plan and other project information should be easily comprehensible. It is advisable to differentiate stakeholders into two categories broadly. 

• Leadership stakeholders 
• Audience stakeholders

This will help you prepare your project information and deliver it effectively. 

ProofHub serves as a centralized dashboard where you can identify the role and involvement of various stakeholders in the project. Further, you can limit the access of different members. This allows access to the necessary information only.

5. Encouraging continuous feedback mechanism 

Decide on a feasible time frame for planning and scheduling feedback sessions. This will prevent a random surge of suggestions which will eventually hinder the smooth flow of the project. Setting up a timeframe for feedback will ensure that the project fulfills the expectations of all the involved stakeholders. 

With ProofHub you can establish a smooth platform for back-and-forth communication and incorporate feedback as and when necessary. Further, the powerful collaboration functionalities like Discussions, Notes sharing, and comments with @mention ensure that every entity is aware of the project performance.

Stakeholder management examples 

Before concluding let me quickly run you through two different practical examples where stakeholder management comes in handy as per the ground situation. 

1. The role of stakeholders in marketing 

Let us take the example of a large IT company launching a new product. The company aims the product to be ground-breaking, and boost the overall income. The major stakeholders in this project would include the product development team, potential investors, and target customers. 

However, the marketing team members would count as the most important stakeholders. This is because the product development team would work on building an effective interface for enhancing the user experience. The marketing team is solely responsible for placing the product in the right market. Their research will be the turning point that decides the performance of the new product.

This example states the importance of choosing and laying emphasis on the right stakeholders. Different stakeholders play different roles along the project lifecycle. By choosing the right stakeholders you enhance the chances of the successful outcome of the project. 

2. Involving stakeholders in the decision-making process

In the event management sector, stakeholders play a crucial role in the decision-making process. By incorporating a collaborative approach in the planning stage, you can make a collective decision based on the variety of ideas at your disposal. 

Event management is a process-driven module. Hence it is essential to set up a steady roadmap for planning and executing the event. By involving the stakeholders at the decision-making stage you can eliminate the delays and shortcomings in the event. This will help you hold an event that completely satisfies the stakeholders’ requirements. 

Conclusion

Stakeholder management is a broad term that brings into consideration and interest of every entity interested in the success of the project. This article is an eye-opener and provides you with a basic understanding of the terms surrounding stakeholder management. 

By establishing and streaming stakeholder management you can efficiently fulfill the expectations of the various entities. Further, ProofHub simplifies the process by providing you with a platform for engaging with your stakeholders and keeping them on the same page.

Related articles

• Project stakeholders: Definitions, roles, and management
• What is stakeholder analysis? All you need to know
• How to manage stakeholder expectations for a successful outcome?
• Stakeholder engagement plan: 5 best practices for building one
• 5 Steps to create an effective stakeholder communication plan

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