Why Stakeholder Management is Important

Projects revolve around stakeholders

June 4, 2016

A stakeholder is someone inside or outside the organization that has an interest in the outcomes of the project. Some are more important to the life of the project, such as the sponsor, steering committee or project team members (which may include technical or business leads/supervisors) and the project manager, of course. Others are no less important but are involved only in parts of the project (such as subject matter experts, cross-functional managers, and suppliers.)

Stakeholders and their actions typically reflect and influence their project interests, the rest of the project/organizational/provider environment, internal/external outcomes, span of project control and functional/organizational authorization.

Stakeholder focus is the lifeblood of successful project relationships. Stakeholders have varying needs at different project stages. These needs may involve communication, establishing a sound relationship, feeling trusted and relevant, and understanding how their work is contributing to successfully meeting project objectives.

Good project managers begin their projects by identifying stakeholders, understanding their role in the project, identifying their project-related expectations and, relative to other stakeholders, confirming common expectations and resolving conflicting expectations. Once this is done the job of managing stakeholders really begins.

As identified earlier, core project stakeholders will be a part of the project for the duration. Their information needs, inputs, and decision-making will vary over that time, but will broadly be focused on seeing the project to a successful conclusion. Other stakeholders typically have a shorter involvement at some point in the project, usually a more specific role in completing activities and tasks either of a functional (e.g. legal, marketing, human resources) or of a technical (e.g. application-specific, contractor, supplier) nature.

Management requires information, which requires communication. The role of the stakeholder will determine the amount of information they require. For example, the information a sponsor requires will be different from that of a team specialist. This is also linked to other project activities, such as progress reporting, stakeholder updates, and day-to-day communication.

The key to successful stakeholder communication is to avoid wasting project resources through unnecessary data collection and to focus on stakeholder decision requirements. Two strategies include:

Determine minimum information needs by asking the following questions:

  • What decisions require information?
  • What minimal amount of information is necessary to make that decision?
  • When is that information required and by whom?
Determine the simplest, most direct and least time-consuming methods for collecting needed information.

Build trust by making sure that all stakeholders are aware of information reporting requirements and the purpose served by each.  Solicit stakeholder input to increase the efficiency and relevance of information reporting activities.


by Steven Lesser

Business Resources