Stakeholder management

    • What are stakeholders?

    • Are there different type of stakeholders?

    • Stakeholder mapping

    • Engaging your stakeholders

    • Stakeholder Management Plan

    • Stakeholder Communication Strategies

    • Stakeholder Risk Management

What are stakeholders?

Stakeholders are individuals with an interest in or impact on a project. They can influence the project positively or negatively. Identifying and managing key stakeholders is crucial for project success.

Are there different types of stakeholders?

Stakeholders and shareholders often get used interchangeably, though they have distinct interests in an organisation or project. Stakeholders can be internal or external. Internal stakeholders (e.g., employees, project managers, owners) are directly involved, while external stakeholders (e.g., customers, suppliers, community) may have indirect influence and impact.

  • Internal: Employees, Project Managers, Owners, Shareholders, Investors, Board of Directors

  • External: Suppliers, Customers, Creditors, Competitors, Community, Government

Stakeholders and shareholders often get used interchangeably, though they have distinct interests in an organisation or project.

  • Shareholder - Invests in the project/organisation through stocks and focuses on profit.

  • Stakeholder - Has an interest in the project's overall performance and includes shareholders.

Stakeholder mapping

Identification

The first step in Stakeholder Management is identifying who the stakeholders are, listing them out and categorising them into different groups based on similar attributes, interests, or motivations.

1

Analysis

 The next step is to analyse each stakeholder and make assumptions about their level of influence on the project and how they may impact the project scope.

2

Mapping

To visually see how you should be engaging with key stakeholders based on their level of influence or interest in your project, you can map it out in the following way.

3

Here is an example of a construction project power-interest matrix:

The X-axis represents the level of interest a stakeholder has in the project, while the Y-axis represents the stakeholder's power or influence over the project.

Here is an example of a completed construction project power-interest matrix:

All your stakeholders will fall under one of the four quadrants shown on the map, as shown on the diagram above. Consider their level of interest and influence on the project and place them under one of these categories.

Engaging your stakeholders

Depending on where the stakeholder is placed on the map, each category will have a different strategy for managing and engaging the stakeholders effectively:

KEEP SATISFIED

These stakeholders have a strong influence but low interest in the project. The aim is to increase their interest in the project by encouraging participation to reduce the risk of them having a negative impact. 

Inform & Consult on area of interest

MANAGE CLOSELY

These are the key stakeholders who influence the decisions of the project and need to be managed closely. You will need to fully engage with these people and make a great effort to have a strong relationship with them.

Inform, Consult & Collaborate while managing expectations

KEEP INFORMED

 These people have a strong interest in the project. Make use of their interest through involvement in low-risk areas. 

Inform & Consult on area of interest

MONITOR

These are the key stakeholders who influence the decisions of the project and need to be managed closely. You will need to fully engage with these people and make a great effort to have a strong relationship with them.

Inform but avoid sending unnecessary communication

Stakeholders may come and go throughout the project and their influence or interest may also change over time. It is important to frequently reconsider your assumptions about each stakeholder's influence or interest. By completing stakeholder mapping, you can understand how each stakeholder could impact your project and determine the most effective management plan for them.

Stakeholder Management Plan

A Stakeholder management plan provides a consolidated view of how you plan to engage and communicate with stakeholders. 

A stakeholder management plan will typically outline the following:

  • Contact Details

  • Project Role

  • Power/Interest Level

  • Preferred Communication Channel

  • Frequency of Engagement

Having this information in one place allows the project team to know the level of engagement required for each stakeholder and how to engage with them best. This should be made accessible to all team members.

Check out our Stakeholder Management Plan Template.

Stakeholder Communication Strategies

Determining the most effective method for certain information to be communicated can contribute to building a stronger relationship with stakeholders and reduce potential conflict. Be sure to take notice of stakeholder preferences. Here is a list of communication methods and tools to consider.

DIGITAL

  • Emails

  • SMS

  • Social Media Updates

  • Project Blogs

  • Team Calendars

EVENTS

  • Meetings

  • Community Events

  • Wānanga

  • Workshops

  • Discussion Forums

FEEDBACK

  • Surveys

  • Polls

  • Focus Groups

  • Interviews

  • Panels

TRADITIONAL

  • Focus groups

  • Meetings

  • Events

  • Letters

  • Reporting

Choose communication methods carefully to avoid conflict among key stakeholders. Sharing sensitive information through inappropriate channels, like social media, can cause unnecessary tension. Consider the content, audience, and clarity when selecting a communication method.

Tailoring Communication

Customise your communication method based on stakeholder characteristics and needs:

  • Language & Tone: Match the formality and expertise level of the audience.

  • Cultural Sensitivity: Be aware of cultural norms and sensitivities.

  • Formats: Offer various formats for accessibility, like captions or alternative text.

  • Relevance: Address stakeholders' specific interests.

  • Frequency & Timing: Follow recommendations from stakeholder mapping for timing and frequency, including early updates if needed.

  • Visual Elements: Use charts and infographics to simplify complex information.

  • Preferred Channels: Communicate through the channels stakeholders use most frequently.

Managing Stakeholder Expectations:

Stakeholders often have varying expectations, which can conflict with project goals. Here are strategies to manage and align these expectations:

  • Prioritise Expectations: Focus on those aligning with project goals and key stakeholders.

  • Build Relationships: Engage closely with high-risk stakeholders, listen to their concerns, and build trust through transparent communication.

  • Set Clear Expectations: Communicate the project's mission and objectives to ensure alignment.

  • Encourage Participation: Involve stakeholders in decision-making where appropriate to foster a sense of involvement.

  • Be Transparent: Share information openly to build trust, even if stakeholders disagree.

  • Be Proactive: Address potential issues early and anticipate problems before they escalate.

  • Address Conflict Early: Resolve conflicts promptly through open communication and collaboration.

  • Understand Motivations: Tailor communication based on stakeholders' motivations to address issues effectively.

Stakeholder Risk Management

Effective stakeholder risk management can ensure social acceptance and minimise negative impacts. Key risks include:

  • Lack of Support: Influential stakeholders may withdraw or withhold resources if they feel uninformed or unsupportive.

  • Resistance to Change: Stakeholders resistant to changes can slow progress; communicate changes early.

  • Communication Challenges: Poorly targeted communication can overwhelm or confuse stakeholders.

  • Scope Creep: Unclear project scope can lead to competing priorities; manage scope changes carefully.

  • Legal and Compliance Risks: Stakeholders may be unaware of legal or contractual obligations, risking project issues.

  • Financial Risk: Unrealistic budget expectations can lead to overspending or loss of support.

  • Ethical Concerns: Conflicting personal and professional interests may arise; promote transparency to address these early.

So what can you do to manage these risks if they occur?

Follow this 5-step process to handle risks:

  1. Determine Severity: Evaluate the risk’s probability, potential impact, timeframe, and initiating factors to understand how it may affect the project.

  2. Develop a Plan: Create a strategy to address the risk, choosing to avoid, accept, reduce, or transfer it based on its severity and impact.

  3. Communicate the Risk: Share the risk with relevant stakeholders in a clear and relevant manner.

  4. Monitor the Plan: Assess whether the risk management plan is effective and adjust based on stakeholder feedback.

  5. Assess and Adjust: Continuously monitor and reassess risks throughout the project to adapt strategies as needed for smooth delivery.