A company’s most valuable commodity is its people. Without invested, competent, and productive employees, you can’t effectively complete projects and deliver customers value.
And this commodity doesn’t end within your company’s “walls.” People who aren’t your employees, like caring and resourceful vendors and supportive clients, all help you achieve your goals.
That’s why effective stakeholder management is so crucial. You must ensure everyone understands expectations and personal responsibilities so projects stay on track and you can deliver value to everyone involved.
What’s stakeholder management?
A stakeholder is anyone that’s involved or invested in a company’s offering or a project’s outcome. And stakeholder management is the process of assessing the needs of and communicating important information to this group.
This work typically involves the following:
- Resolving conflicts
- Communicating project plans and progress
- Working with vendors to reduce wait times and cost
- Gaining and implementing feedback
- Generating product and service ideas based on stakeholder suggestions
- Improving risk management and profit margins
This work is crucial to keeping everyone involved happy. When stakeholders feel well-informed and like their interests matter, they’re more likely to back a project. Consequently, teammates might contribute more meaningful work and external stakeholders might approve deliverables quicker since you’ve fostered everyone’s buy-in.
Various types of stakeholders
There are two stakeholder categories: internal and external. Internal stakeholders (or upstream stakeholders, as they contribute to product and service creation) include all company employees. And external stakeholders (or downstream stakeholders, as they usually purchase or distribute your offering) are your:
- Outside investors
- Government agencies
Regardless of which way the stream is flowing, all stakeholders have some degree of the following traits:
- Influence: Because they’re involved, stakeholders often impact a project’s scope, timeline, and roadmap.
- Power: Stakeholders hold positions of power because they possess assets project managers require, like expertise, capital, and approval.
- Irreplaceability: Each person involved should contribute something unique to project completion.
The benefits of stakeholder management
If stakeholders are unhappy, employers are unhappy, making effective stakeholder management invaluable. It also offers the following benefits:
- Improved communication: Effective stakeholder management requires regular communication with everyone involved. You relay expectations and progress somewhere central while managing stakeholder engagement by encouraging everyone’s feedback.
- Increased buy-in: When you offer visibility and ask for people’s opinions, they feel more invested in the project. They see how you’ve implemented their feedback and better understand how important their contributions are. And even just clearly defining any reasoning behind actioning a project — a crucial part of stakeholder management — can increase team and client buy-in. li>
- Better risk reduction: Open engagement with various stakeholders helps teams identify project risks early on in the process. These interested parties can also help you create avoidance and mitigation plans, leading to smoother project completion.
- Optimized performance: Project stakeholder management includes accurately defining your scope, timeline, and resources for everyone involved. Because you’ve synchronized all this information with stakeholder interest, it’s more likely your team will achieve external stakeholder and employer goals.
- More goodwill and trust: Transparency and accountability increase stakeholder faith, as everyone can see what’s going on and knows who to contact if an issue arises. The more you raise everyone’s project awareness, the more stakeholders feel you value their perspective. This established trust benefits both current and future initiatives, as you’ll likely gain quicker deliverable approval and more renewed contracts.
4 steps to excellent stakeholder management
A great stakeholder management strategy is flexible, since different people require unique communication methods. With that in mind, here’s a four-step process for creating a comprehensive management plan.
1. Identify your stakeholders
List every person involved and invested in your project, from employees to suppliers. Define what connects them to your project and, if useful, fill out a RACI matrix — those responsible, accountable, consulted, and informed — to better understand everyone’s involvement. You might also outline a map that shows how each person connects to other stakeholders.
2. Assess and prioritize stakeholders
Define each person’s expectations and motives as well as their influence on project decisions and outcomes. You might use interviews, surveys, and group meetings to glean this information. Then, create a prioritization list that starts with the most important needs — likely an employer or client’s — and ends with less crucial “asks.” Include reasons why certain requirements are more important so that if conflicts arise, you can reference this information when explaining why you prioritized a higher-level need over a lower-level one.
3. Develop a communication strategy
Clear and frequent communication is crucial to ensure everyone feels informed and can share progress and hiccups right away. Your communication plan should include the following:
- A map showing reporting relationships
- A guide that explains who to go to for common questions and topics
- A communication cadence outlining meeting, check-in, and reviewal schedules
- Access information for any communication-relevant platforms stakeholders need, as well as a guide for best use
4. Create a stakeholder management plan
For each project, compile all the above research into a stakeholder management document any relevant leaders can access. Choose someone responsible for updating this document as stakeholder interests and requirements change, and review it post-project to see if there’s anything you could have done differently.
Final tips and best practices
You’ve already done great work by planning to meet stakeholder expectations. Now, follow these best practices to bolster your plan:
- Reiterate the project’s purpose: As often as possible, push your reasoning behind working on this project so everyone feels invested.
- Define roles and responsibilities: Publicly clarify every stakeholder’s role so the entire group understands their part in the whole and where to direct certain questions.
- Communicate often: Touch base with everyone frequently so remain well-informed on progress, hiccups, and dissatisfaction you can resolve.
- Be transparent: If possible, share stakeholder interests with the entire group, and always accurately convey progress to deter disappointment and surprises.
Tempo tools that assist stakeholder management
As excellent as your planning skills likely are, various Tempo tools exist to streamline your process. Try Roadmunk by Tempo to create project roadmaps that clearly outline deliverables, milestones, and timelines. Then, use Timesheets by Tempo to track task progress and relay metrics-driven updates to external stakeholders.