The ultimate guide to managing and influencing stakeholders
Why is it important?
It only takes one stakeholder of influence to mention something to the CEO or executive sponsor and a project can be closed down. An organisation has a finite pool of capital allocated for projects with large volumes of initiatives and projects vying for funding, the executive team need to place their bets on projects they feel have the greatest chances of delivering the defined ROI. It is easy to develop a theoretical business case that demonstrates the value of doing something, but in the end, what the organisation is betting on is the project team’s ability to execute successfully and navigate the issues and risks that will undoubtedly emerge. Therefore, building confidence and gaining trust is critical to keeping your project alive.
The other outcome of poor stakeholder management is a misalignment of expectations between the project team, business and executive sponsors. This can create significant issues for a project in being able to explain and demonstrate progress. The root cause of this is often poor project communication. A lack of coherent, clear and well-presented communication in regard to progress and status can directly lead to projects failing.
Example: A project team may be overcoming highly complex problems or unexpected issues which mean that a milestone being achieved should be viewed as a huge success, however, if stakeholders are not aware of the issues/challenges, the milestone is just seen as an expected outcome and therefore any slips in terms of time, cost or quality are then rightfully criticised. This scenario leaves the project team thinking that they have exceeded expectations but their stakeholders feeling their performance is below expectations. Once this gap is created it requires a huge allocation of time and effort in order to turn things around and re-build confidence.
Here’s our simplified 3 step plan to help you get it right
Step 1: Network mapping
The first step to stakeholder management is mapping your network or more specifically the network relevant to the project you are working on. For a project, you should include all individuals, departments or organisations that have any involvement, stake, contribution or influence on the project. These can be internal to the organisation or external, such as a supplier or delivery partner.
The idea is to identify connections and links between your stakeholders which will allow you to come up with strategies for how to influence and manage them in the future.
For example, in the figure below there is a simple network map example of how you may be connected to the CEO. There is a standard route that is likely to follow the project or company hierarchy but there is also an informal route presented by a connect with the CEOs EA. It is important to have identified these two routes of influence so that they can be utilised at the right time for different purposes. The EA connect could be used to find time in the CEO’s calendar, gain faster sign-off of a decision, document or payment, understand their mood/state of mind or find out if they will be attending a particular meeting. In addition, by mapping the more formal route, you are able to see how information may flow to the CEO, this will also help you identify the need and importance of building a relationship with all the stakeholders between you and the CEO who you don’t already have an established connect (in this example, the Division MD and business director), in order to have a more direct route of influence. For you to successfully influence the CEO, you cannot rely on information flowing through multiple stakeholder layers, therefore you must create fast track routes. In the example below, there could also be other non-obvious routes, for example, shared family and friends or activity connections such as going to the same gym. These can also be used where appropriate.
Step 2: Stakeholder segmentation
Once you have a network map, all internal and external stakeholders relevant to your project should be mapped in your diagram. Remember, these can be individuals, organisations or departments, as well as internal or external.
In the next stage, all these parties must be categorised in order to devise a stakeholder management strategy and plan. This allows you to first develop a segment level strategy before then moving to an individual stakeholder strategy if required.
To categorise or segment your stakeholders you can use a simple 4 box model that uses two key axes, ‘interest of stakeholder’ and ‘influence of stakeholder’ – see below. Feel free to play around with the segments or axis, the key is to create differentiated stakeholder groupings. In the figure below the groupings have then been allocated a high-level management category – Consult, Actively Manage, Monitor and Engage. These categories reflect the appropriate management style based on the level of interest and influence of a stakeholder.
Step 3: Stakeholder management plan
Once you have your stakeholders segmented you can begin to devise a more detailed plan. The prime objective is to ensure that no stakeholders become a risk to your project delivering to the time, quality and cost expectations of the project brief or achieving the benefits outlined in the business case.
A plan, like the simple example provided below, creates a focus and provides a structured method for managing high volumes of complex stakeholder relationships.
It is important to note that stakeholder segmentation can change during the project, this can be caused by a change in which phase the project is in, re-structures or role changes as well as simple changes in a stakeholder’s attitude. Therefore, this must be something that is actively managed as opposed to an exercise that is done at the start of a project and then forgotten about.