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Know how to identify stakeholders and understand how they measure project success.

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Quick reference

Project Stakeholder Management

The Project Stakeholders are any person or organization who is affected by the project.  Project Stakeholders set the goals for the project and will ultimately determine whether the project is considered a success or failure.  Project Stakeholder support is usually a key component in successful projects.

When to use

At the time the project is initiated, the stakeholders should be identified and their goals and objectives for the project should be clarified and captured in the Project Charter.  At the time of project completion, the stakeholders should be notified of the project results and their approval obtained.  Throughout the project execution, many stakeholders will want to be kept informed about project progress and may want to participate in some project activities and decisions.   

Instructions

All projects have stakeholders.  The stakeholders may be only the project team members, but normally they also include managers of the organization and users of the project result.  The project team does not manage the stakeholders, but they do manage their interactions with stakeholders.

Many of these steps are expanded into more detail within other project management lessons.

  1. Projects are normally initiated by one or more Project Stakeholders in order to achieve an organizational goal or objective.
  2. As the project objectives are identified, it often becomes necessary to include additional Project Stakeholders in the project definition since the goals or objectives will affect them in some manner.
  3. Once all Project Stakeholders are identified and their goals or objectives determined, the project leader will integrate those objectives and capture them on the Project Charter.
  4. Throughout the execution of the project, the Project Leader or their designated representative will meet with Project Stakeholders and inform them of the project status.
  5. At the time of project completion, the Project Stakeholders will review the results of the project and determine if they are acceptable.  The stakeholders perspective on success is normally based upon the business objectives being achieved, rather than on a perfectly executed project plan.

Hints & tips

  • Some Project Stakeholders provide the resources for the project; ensure you know their objectives and keep them informed on progress meeting those objectives, or they may remove the resources.
  • If a key Project Stakeholder does not support the project, leverage the relationship other Project Stakeholders have with that individual or organization to win their support.
  • Keep Project Stakeholders informed, especially during a project crisis.  When there is a lack of information, they often assume the worst and may withdraw their support for the project.
  • Stakeholder Definition:  “An individual, group, or organization that may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project, program, or portfolio.” PMBOK® Guide

This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017.

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  • 00:04 Hi, I'm Ray Sheen, and
  • 00:06 I'll be talking about project stakeholders in this segment.
  • 00:11 The project management body of knowledge, the PMBOK Guide,
  • 00:15 defines a stakeholder as "an individual, group, or organization that may affect,
  • 00:20 be affected by, or perceive itself to be affected by a decision, activity,
  • 00:24 or outcome of a project, program, or portfolio".
  • 00:27 That means a stakeholder is anyone impacted by the project or
  • 00:31 the results of the project.
  • 00:33 Now, for our purposes in this lesson,
  • 00:35 we will exclude project team members from our stakeholder discussion.
  • 00:39 They'll be treated in a separate lesson of their own.
  • 00:42 Let's now focus on stakeholders who are not direct team members.
  • 00:46 That would include senior managers,
  • 00:48 users of the results of the outcome of the project, and
  • 00:51 the organizations providing resources that are doing the project work.
  • 00:54 This would mean the managers from organizations that provide team members,
  • 00:58 any organization providing equipment or facilities, and
  • 01:01 even organizations that are providing cash or materials.
  • 01:06 We don't directly manage stakeholders.
  • 01:08 They normally don't report to the project team.
  • 01:11 But we do manage our interactions with stakeholders.
  • 01:14 Stakeholder support is often needed for successful project execution.
  • 01:18 The stakeholders provide key resources that are needed by the project.
  • 01:23 They can veto a project if they lose confidence in its ability to deliver
  • 01:27 the promised business benefit.
  • 01:29 The project team should proactively manage the stakeholder interactions.
  • 01:33 To do this, you must know what's important to the stakeholders.
  • 01:36 What are they are interested in, and
  • 01:37 what aspects of the project do they wanna have direct involvement?
  • 01:41 Another aspect of proactively managing stakeholder interactions is to engage
  • 01:45 the stakeholders for key decisions.
  • 01:47 When project decisions will have long-term impact on the business,
  • 01:51 stakeholders should be included in the decision process.
  • 01:55 Stakeholders may also need to provide special support for the project.
  • 01:58 For instance, the project team may wanna come in to work
  • 02:01 during hours when business is normally closed.
  • 02:04 This would allow them to test new systems without disrupting existing operations,
  • 02:08 but this may require facility support from people who are not normally team members.
  • 02:13 A stakeholder may need to authorize this support.
  • 02:16 And of course, many stakeholders want to be kept informed about project status, so
  • 02:20 regular communication will need to be established.
  • 02:23 Different stakeholders want different information, and
  • 02:25 delivered in different ways.
  • 02:27 All of this takes effort.
  • 02:28 It's important to maintain stakeholder support.
  • 02:31 They can eliminate barriers and can provide extra support when needed.
  • 02:36 Stakeholders often have a very different view of project success than
  • 02:39 the project team.
  • 02:41 The project team members typically consider success as a project
  • 02:44 management success.
  • 02:46 That means that they have managed the project well by completing the project on
  • 02:50 time, on budget, and fulfilling all of the project requirements.
  • 02:54 However, stakeholders often consider a project success
  • 02:57 based upon achieving the project benefits.
  • 03:00 The project was approved based upon some level of promised business benefit.
  • 03:04 The new sales were achieved, the cost savings or
  • 03:07 cycle time reduction was realized, the new system providing real-time data is up and
  • 03:12 running, the compliance issue has been resolved.
  • 03:15 Whatever, the benefit is realized.
  • 03:17 Now, these two views are not mutually exclusive.
  • 03:20 Achieving a project management success should improve the likelihood of achieving
  • 03:24 a business benefit.
  • 03:26 However, if a tradeoff must be made, the stakeholders are more interested in
  • 03:29 getting the business benefits than having a perfect Gantt chart.
  • 03:33 Occasionally, a project includes changing a business strategy,
  • 03:37 fundamental change in direction or operations.
  • 03:40 In this case, the project is more than just the elements of the project plan.
  • 03:44 It includes a change in the organizational culture and norms.
  • 03:48 In these projects, the cultural change element is often far more difficult
  • 03:52 than the work of creating the project results.
  • 03:55 These projects may not result in success for the original project goals, but
  • 03:59 if they change the business direction, they are successful.
  • 04:02 For instance, the project may be to create and sell a product in a brand new market,
  • 04:06 halfway around the world.
  • 04:08 Well, even if the product is not successful,
  • 04:10 an organizational success may be achieved if the market is now open
  • 04:15 to all of the rest of the company's products and services.
  • 04:20 If we understand the stakeholders' goal for
  • 04:23 the project, we'll know how best to measure project success.

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