The importance of project stakeholder management & stakeholder satisfaction

What is stakeholder management in project management?

In project management, ‘stakeholder management’ refers to identifying, analyzing, and engaging stakeholders throughout the project lifecycle to meet their needs and expectations.

By effectively managing stakeholders, project managers can:

• Secure stakeholders’ support for the project

• Prevent potential roadblocks, and

• Ensure the project is aligned with stakeholder needs and expectations.

Effective management of project stakeholders fosters trust, builds credibility, enhances decision-making, and improves the overall performance and sustainability of the project.

Defining project success through stakeholder management

There are several definitions of project success: from primitive definitions of delivering agreed scope on time and within budget to others, such as customer satisfaction, producing products fit for use, meeting requirements, meeting objectives, and more.

A relatively new definition is ‘Stakeholder Satisfaction.’

Let’s say the Project Manager completes the project on time, within budget, delivering the agreed scope, the product(s) confirmed to specifications, were fit for use, and even satisfied the customer. Can we consider it successful?

Maybe yes, going by most definitions of project success.

But say, as part of managing this project, the project manager

• Burnt out the team, affecting their morale such that some of them quit the organization as a result

• The compliance team complains of non-adherence to QMS standards and documentation requirements

In my view, ‘satisfying stakeholders’ is a more thoroughgoing definition of project success; it encapsulates most other explications of success.

For instance, in the above case, project team members and the compliance team were not satisfied, but they were also stakeholders in this project. Therefore, besides the common notion of project success, stakeholder needs must be carefully examined and satisfied.

The project management community has realized the importance of stakeholders, and stakeholder management is gaining popularity within project management.

Symbolic of this is PMI’s adoption: in the last couple of revisions of PMBOK, this was consistently addressed, while the fifth edition has been overly aggressive about this to have rendered ‘Stakeholder Management’ the status of a separate knowledge area– well deserved, in my opinion.

I may have oversimplified the definition of project success as ‘stakeholder satisfaction,’ but this is no easy task. Satisfying them is a later challenge; the former one is identifying who they are and what they want. This is most important. If this is not done well, overall success cannot be achieved.

Things to consider about stakeholders

1. They could be classified as positive, negative, and neutral.

2. They could be internal or external to the organization. For instance, customers, vendors, partners, government agencies, and environmental groups are external.

3. They vary significantly regarding the level of influence and their interest in the project.

4. Usually, their needs are unique to the project; thus, using a generic checklist may not be enough.

5. Their agenda in the project could be apparent as well as hidden. For example, in a project to outsource specific business processes to achieve cost-effectiveness, the process owner may be against laying off resources that they may not directly express.

6. They could have competing needs in the project. For example, in a project executed for an external customer, the customer may want a product that is high in quality, reliability, etc., while senior management wants good margins meeting the SLAs and not necessarily overachieving them)

7. Their needs may change during the project.