What are stakeholders?
Here is the definition of stakeholders:
“Stakeholders are those who have a stake or an interest in a project or strategy undertaken by a company or an organization, they will be affected in some way by the project and so have an interest in influencing it.”1
As you can see a stakeholder can be anyone in your organization, as well as outside of it.
Besides the obvious ones (sales, operations or finance), stakeholders can be as well:
- Non-profit organizations
- Research and development
Even if they are not directly involved in the purchase of a particular good or service, they may have some interest in the project.
Procurement is a service provider to the business. And, hence, procurement must ensure that for all stakeholders we cover at least the minimum of their requirements. And this often requires a lot of negotiations.
Who are our stakeholders
Alright, so we learned who our stakeholders can be. But, under no circumstances shall we treat them equally. Some of them can only complain to your management if their wishes are not fulfilled. While others may stop the project altogether, or even impose a hefty fine on your Company.
For this purpose, we use stakeholder mapping
Firstly, we need to list all stakeholders. Let us list them as long as they have any interest, or are in any way impacted by the project outcome. In the next step, we will segregate them into four categories based on:
- Their power to influence the decisions and outcome
- Their interest in the project
This group is the one that can bring your project to a halt. They are usually the ones holding budget decisions or giving the final sign-off.
These stakeholders can create a lot of inconveniences but do not have a particular interest in the project itself. Government entities would be a good example. As long as you have all the required permissions, they will not interfere.
This group of stakeholders has a lot of interest, but little influence. Still, communicate often and in detail with them. You do not want them to persuade some of the more influential stakeholders that you are doing something wrong. Examples of these groups would be non-profit organizations or informal groups, as well as workers.
This group has no interest, nor influence. They are just around because they have to. It can often happen that they are not aware of the project, even if it will impact them in some way. All you need to do is not to ignore them. Acknowledge them, provide the information they need to know and make sure nothing escalates.
As we have already learned, communication is paramount to good project execution.
Setting up communication channels
Nowadays, there are so many channels to communicate. All you need to do is to pick one (or a couple) and stick to it.
For example, you can set up a Teams group internally. And a weekly newsletter for external stakeholders. If live meetings are preferred by the majority, set up a reoccurring meeting invite. It can be a daily 15-minute catch-up and a bi-weekly detailed progress update meeting.
The important thing is: to be consistent. So many projects failed due to information not being shared on time and with the right audience.
Building trust and rapport
We have learned how stakeholders have different levels of influence or interest in the project. Next will be to see what is their personal opinion about the project:
Blockers are stakeholders that are working against the project. For some reason, they do not want to have the project finished. No matter their influence, we must engage and find the reason for this. If this is not taking you anywhere, flag it to the management. Those stakeholders cannot be ignored.
Critic, on the other hand, can be very useful. Yes, they are the ones that always find a way to describe the project as a “disaster”. But, some of their criticism may reveal risks that were overlooked. So, listen to what they have to say. Nevertheless, do not allow them to push the project in the wrong direction with their constant negativity.
The Neutral ones are the ones that are there because they have to. Usually, the project is a part of their regular duty. They do not care about the outcome. Assign them tasks that need to be done, but are not critical.
Next are Supporters who are on board with the idea and project. They believe in the mission and will go above their duty to get the job done.
Advocates actively support and vouch for the idea. These are the stakeholders that will use their position or influence to remove any obstacles. However, use this help only when really needed. Nothing can harm a project more than a disappointed advocate turned into a blocker.
Managing our stakeholders
So, how do we manage all those different stakeholders? A short answer would be transparency and communication. A longer answer: using our negotiation skills to find the best possible outcome for all stakeholders.
Setting goals and expectations
Establish what’s required from each stakeholder. High, medium or low-level support; full-time technical support or ad-hoc advice. Inform them about specific actions required and why these are important.
In an ideal case, every stakeholder will know what and when is expected of him.
Buy-in from stakeholders
We have discussed different types of stakeholders earlier. Try to get stakeholders’ buy-in early. Especially when it comes to those that can influence the progress of the project. What is there in for them and their teams? Can you offer them to support their project in return?
Office politics exist in most companies, whether we like to admit it or not.
In Procurement and Supply Chain, we use project management tools when we are about to change a process. And as much time as we spend on the process must be as well spent on change management. Some of our stakeholders will have to work in the changed environment long after the project is officially closed. Once more, communication is key. Start communicating early and frequently.
If you want to learn more about Stakeholder Management, below are a couple of good sources.
1 Vogwell, D. (2003). Stakeholder management. Paper presented at PMI® Global Congress 2003—EMEA, The Hague, South Holland, The Netherlands. Newtown Square, PA: Project Management Institute.