Stakeholder management
A key factor for project success
Stakeholder management refers to the process of identifying, analysing and systematically influencing all important interest groups (stakeholders) of a project or organization. Stakeholders are individuals, groups or organizations that have an interest in or influence on the project or are affected by its outcome.
The term stakeholder originally comes from corporate management and was popularized in the 1980s by the American economist R. Edward Freeman through his Stakeholder Theory.
""Great companies endure because they manage to get stakeholder interests aligned in the same direction." R. Edward Freeman
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Goals of stakeholder management
The main goal of stakeholder management is to build and maintain a positive relationship with stakeholders to ensure project success and minimize risks. The aim is neither to meet the needs of all stakeholders equally, nor to manipulate stakeholders so that they always agree with the company's objectives.
Importance of stakeholder management in project management
Stakeholder management plays a crucial role in project management, as the success of a project depends not only on good project planning, adherence to deadlines and efficient use of resources, but also to a large extent on the support and satisfaction of stakeholders.
Stakeholder management should not be a manipulative strategy to package project goals in the interests of the company in such a way that they please as many stakeholders as possible and nobody acts against them. Instead, the aim is to meet all stakeholders on an equal footing in order to establish a good basis for discussion during the course of the project. Positive influences from the project environment should be strengthened and negative influences minimized by taking them seriously and addressing them.
Good stakeholder management can also turn negative stakeholders into constructive critics who, if they are not enthusiastic about the project, at least no longer actively work against it.
Stakeholders with a positive attitude can become mentors and advocates of the project - in other words, project influencers. This makes stakeholder management an effective project marketing tool and makes a positive contribution to branding.
Who is responsible for stakeholder management?
In most cases, this competence is part of project leadership. Depending on the scope of the project, there may be a separate person or team responsible for stakeholder management. However, it is often one of the many tasks of project management.
This naturally entails the risk that too little attention is paid to stakeholder management and communication with the interest groups is neglected. This is a major risk for the success of the project, and there are many examples where poor or non-existent stakeholder management has contributed to the failure of major projects.
What do you need for stakeholder management?
Above all, comprehensive knowledge of the project and the project environment. In concrete terms, this means that all information about the project must be well documented and always up to date.
During the course of the project, it must always be possible to provide information on the current status and to know which sub-goals have already been achieved and to what extent, which project phases are pending and which risks could jeopardize the success of the project.
In addition, the following three sentiments should always be considered:
- Understanding: If the stakeholders are known, an understanding of their situation, position and attitude towards the project can develop. If you understand the stakeholders, you can communicate better with them and respond to their needs.
- Trust: If there is an understanding of the respective positions on both sides - project management and stakeholders - trust can develop. Then it is possible to communicate openly and honestly and also to talk about unpleasant things.
- Connection: Understanding and trust create a connection that makes it possible to work constructively on solutions and jointly lead a project to success.
Effective stakeholder management in 5 steps
1. Stakeholder identification: Determine who the stakeholders are. They can be internal persons or groups as well as external persons or stakeholder groups. They can also be laws, regulations or guidelines that are represented by an office instead of a person.
2. Stakeholder analysis: Understanding the interests, expectations and potential influence of stakeholders, as well as recognizing conflicts and relationships.
The stakeholder analysis can be recorded in a simple stakeholder matrix, which basically takes into account the two factors "interest in the project (large/small)" and "influence on the project (large/small)" and categorizes the stakeholders accordingly. The more complex the project, the larger the group of stakeholders usually is. More complex methods can then also be used for analysis.
3. Development of strategies: Creation of communication plans in order to inform and involve stakeholders appropriately and secure their support.
Communication plans can be very comprehensive and can be developed for many different channels. It is important that you do not get bogged down in planning but make sure that the plans are actionable. Plan for realistic timescales and appropriate for the target audience and communication channel.
4. Communication and involvement: Communicate regularly and transparently with stakeholders to meet their needs and avoid potential conflicts.
Communication plans help to provide structured information and to be able to track which content is transmitted to certain stakeholders via which communication channels. Important: even if the project becomes challenging in terms of content or deadlines, the implementation of communication plans must not be neglected.
5. Monitoring and adjustment: Monitoring the communication measures, the reaction of the stakeholders and the evaluation of the measures.
This allows adjustments to be made to stakeholder management and stakeholder communication if necessary. In the best case scenario, this results in a positive feedback loop to the project management, which can use constructive criticism or praise in the course of the project. The following considerations can help to continuously improve stakeholder management:
- Have new stakeholders been added?
- Is the stakeholder analysis still correct?
- How do the stakeholders react to the measures and should they be adapted?
The 5 steps of the control cycle for stakeholder management are run through regularly throughout the course of the project. This will ensure that your stakeholder management efforts bear fruit.
Practical tips for stakeholder management
Adapt the communication to the target group and the communication channel. The same project information must be prepared differently for the public via social media channels than for a press release or an information event in front of the local council. If necessary, get know-how from your company's marketing and PR department.
No project is perfect, no stakeholder analysis is perfect and, accordingly, stakeholder management does not have to be perfect either. Honest communication and constructive exchange lead to a better relationship between project leadership and stakeholders than a perfect project marketing campaign that does not come across as authentic.
Pragmatic solutions are better than no solution. Try to solve those problems that can be tackled quickly in a pragmatic way. This clears the way for the big problems and shows that you can act quickly.