What Is Project Stakeholder Management? (With Stakeholder Types)
By Indeed Editorial Team
Published April 14, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you're a project manager, understanding and meeting the needs of different groups can be an important aspect of a project. From customers to investors or employees, various stakeholders may have an interest in the success of a project. In this article, we answer the question of what is project stakeholder management, describe how to identify and manage stakeholders and break down the different types of stakeholders to help you succeed in a project management role.
Related: Learn What a Project Manager Does
What is project stakeholder management?
Project stakeholder management is the process in which a project manager identifies the different groups of stakeholders involved with a project and creates strategies and plans to manage the expectations of all parties. In this case, stakeholders are individuals that may have an interest in the success of a project. This can include customers, team members, suppliers, executives or investors. Managing the expectations and results for these parties can require a project manager to understand each group's unique needs and challenges and develop plans to keep them informed about the project's progress.
How to identify and manage stakeholders
Here are eight steps you can follow to identify and manage the stakeholders within a project:
1. Determine who the project may affect
To begin identifying the potential stakeholders for a project, you can determine which groups may experience either positive or negative effects based on the project's success or failure. With a building project, for example, consider who might use the new building and which parties may profit from its creation. You can also identify stakeholders by reflecting on what work is required for the project and who can provide it. In this case, team members, materials providers or investors can all offer resources and services that may help the project come to fruition.
2. Gather data
As you begin to learn about stakeholders and their needs for a project, it can help to gather as much data as possible about each group's desires, expectations and habits. Depending on the stakeholder, you can use different methods to gather data. For example, you could complete market research or distribute surveys to better understand customers' needs or learn about any pain points that the project could fix. For other groups of stakeholders you can gather data by simply speaking with each group about their expectations and concerns.
3. Create and prioritize categories
You can create categories for stakeholder types and prioritize these types based on their potential influence on the project and the amount of work required to meet their needs. You can also create categories based on any criteria that can help you effectively manage expectations. For example, you can group stakeholders based on their level of contribution to the project or the time period when they expect to see results. These categories can require extensive information about each group and their needs, so if you feel like you're missing any data, you can always repeat data gathering procedures.
4. Stay organized
With many potentially competing stakeholder needs and concerns, it can be important to create an effective and consistent system for managing all relevant information and updates. You can use online calendar software, scheduling applications or reminders to help you keep track of stakeholder data. After developing and prioritizing groups, you can use methods like color-coding to visualize the work required for each group.
If some groups seem especially demanding or complicated, you may want to use multiple methods to organize their data. You can also try strategies like designating a certain time period each day for dealing with the concerns of those stakeholder groups. Breaking this information into smaller chunks can make the process of stakeholder management more manageable and free up time and resources you can use to focus on other areas of the project.
5. Schedule consistent meetings
Especially with large projects involving many stakeholders, it can be important to schedule consistent meetings to inform stakeholders about the status of the project. As a manager, communication can be extremely important. You may want to find a way to maintain communication at all times, even in the case of issues or delays.
While it may be challenging to manage a busy schedule filled with many meetings, it can be easier than fixing problems that can arise from a lack of communication. Additionally, these regular meetings can provide a space for the stakeholders to voice concerns of offer areas for improvement. In this way, you can utilize available perspectives to create a high-quality project.
6. Create individual strategies
As you manage the desires of different stakeholder groups, you may want to create individual plans for each group. These plans can include logistical information about meeting times but can also include detailed notes about what each group would like to achieve, how you plan to achieve it and when they can expect results. By doing this, you lessen the chance of misunderstanding and help each group understand what they can expect. You can also demonstrate your care and dedication to individual needs. Like in other areas of the project, it can help to create and consistently update plans.
7. Build relationships
Throughout the project, creating meaningful relationships with stakeholders can help you manage each group's experience and expectations. If possible, consider learning about individual stakeholders. You can begin conversations or schedule meetings during or after work hours to get to know stakeholders. While this isn't always necessary to meet their needs, it can help you better relate to stakeholders and determine the best strategies for understanding their unique thoughts and ideas. It can also help you showcase your personality and ideas to demonstrate your perspective to stakeholders.
Read more: How To Build Good Working Relationships
8. Plan for reactions
Acting as a project manager may mean having a plan for various aspects of the project. This includes a plan for what to do if stakeholders react in certain ways to changes or updates. As you get to know stakeholders and build relationships, you can begin to try and plan for their reactions.
Considering reactions ahead of time can help eliminate any stress that can occur if unexpected problems arise. This can be especially important if you know that an update may upset a stakeholder. For example, if a project is behind schedule and you have to notify an investor, you may want to plan for them being upset at the news. From there, you can brainstorm ways to minimize their negative reaction such as providing other positive updates or describing how you plan to get the project back on schedule.
Types of project stakeholder management
Here are the two types of stakeholders you may encounter as a project manager and how you can relate to each:
Internal stakeholders are people or groups within the project's organization. This can include project team members, other managers and executives. Since these groups' livelihood depends on the success of the project, they may already be motivated to complete it in a timely and effective manner.
As a manager, you may want to find a way to keep these stakeholders accountable for their work and motivate them to use their unique skills to better the project. One way to connect to these stakeholders is to relate to them as a professional who also wants to see the project succeed. This can involve frank, honest discussions of the project's progress and assessments of need and areas of success.
External stakeholders are people or groups outside of the project organization who may still have an interest in the project's success. Some examples of external stakeholders include project customers or users, suppliers or investors. Like internal stakeholders, the needs of these groups can vary greatly.
In many cases, though, external stakeholders may not be as knowledgeable about the specifics of the project outside of their own unique area. In this way, you can manage each group by determining which area of the project they're interested in and providing details in that area. For example, if an investor is focused on the financial aspects of the project, you may want to focus on budget discussions in your meeting. While external stakeholders may be just as invested in the project as internal stakeholders, consider relating to them from their unique knowledge base whenever possible.
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