why is stakeholder management important

However, stakeholder management is a very narrow way of looking at how we work with people on projects to achieve a common goal. Mike is also an author of fourteen books, including four directly about project management: - The Influence Agenda - about stakeholder engagement is the most recent - How to Manage a Great Project - Brilliant Project Leader - Risk Happens! Mike Clayton is an accomplished trainer, speaker and trusted advisor. The work is frequently delegated to junior team members, who get little support in their role. They often fall back on a small selection of simple tools. Sign-up for the latest news, information, research, and tools to expand your knowledge of business! Stakeholder management is about creating long-term relationships based on trust, integrity and customer satisfaction with key players involved in a business on any level. And there are many customers, some visible and obvious, and others not so easily seen. MikeYou make a good point re the distinction between Stakeholder Engagement and Management. So the results are only as good as the enthusiasm and creativity of the work-stream lead. 4 Reasons Why Project Stakeholder Management Is Important. Other stakeholders typically have a shorter involvement limited to particular aspects of the project, usually a more specific role in completing activities and tasks either of a functional nature (such as legal, marketing, or human resources) or of a technical nature (such as contractor, supplier, or application-specific roles). As management guru Stephen Covey succinctly puts it, Your organisation is a complex ecosystem of multiple, interdependent parts both inside and outside its formal boundaries, and your stakeholders are its most important elements. Consequently, it's important to identify the most influential stakeholders. But project managers often see it as ‘something a bit different’. If that were always so, it would automatically follow — or at least easily be derived — from acceptable predicate definitions for 'stakeholder', 'analysis', and 'important'. Others are managers and professionals from other disciplines, with a lot of project experience. Join us at InfoWorks as together we strive to be smarter about business. They therefore tend to outsource it to a specialist communications agency or in-house team. Because we need people to get the project work done. Stakeholders are people interested in your company, ranging from employees to loyal customers and investors. Small projects are rarely run by full-time project managers. The orientation of stakeholders may keep on changing as the project progresses and therefore effective stakeholder management system is important for positive results. Of course, the situation is more complex than this. After twelve years of active project management, Mike became a sought after trainer and he has delivered training and seminars to many thousands of people. This offers six commitments, which I hope you will join me in making. Most projects you work on will involve multiple stakeholders, and each one potentially has the ability to speed up, slow down or completely obstruct your progress. SIgn Up for the latest news, information, research, and resources to expand your knowledge of business. Too often, we honour stakeholder engagement more in the breach than in the observance. Now I am all for simple tools; when applied vigorously, the results are excellent. Many people have – and continue to – refer to stakeholder engagement as ‘stakeholder management’. Project stakeholders include those who care about the project or will be affected by it in some way: Primary project stakeholders are those who will be a part of the project for the duration. Engaging with key stakeholders will … The primary customer may be asking: is this going to help me do my job more effectively? And they also give them less attention than even larger projects. Stakeholder management it seems to be very important than ever because of the increasingly globalizations and the interconnected nature of the modern world. Donnie,Further to your point about the APM/RICS guidelines for stakeholder engagement: there is now a section on the APM website about Stakeholder Engagement that uses the 10 Principles of Effective Stakeholder Engagement as a framework for relevant resources: https://www.apm.org.uk/stakeholder-engagement.There is a wealth of information being collected on the site including: case studies from practising project managers with tried and tested tools and techniques for dealing with tricky situations; and a bibliography for anyone wishing to dig a bit deeper into the topic or planning to do research on SE. The focus of stakeholder management isn’t to manage stakeholders but instead to … What we need is more and better training – at all levels. Some are project management professionals like most of the readers of this journal. On training courses, it is the section on stakeholders that often gets the biggest wow and the highest retention factor. By identifying individual stakeholders and their unique needs, a project manager can more effectively communicate with stakeholders, leading to satisfied sponsors and stakeholders, happy and productive team members, coordinated efforts focused on common targets, and more successful project outcomes. That’s why I launched my Charter for Ethical Stakeholder Engagement. The data-driven workplace of today has meant change for today’s leaders, and projects have taken on more importance as the business environment evolves. Log in to post a comment, or create an account if you don't have one already. Additionally, stakeholders … But they rarely are. Stakeholder management is important because it is the lifeblood of effective project relationships. On the largest projects, things are usually different. For example, at the initial stage of the project, the project sponsor may be wondering: is this worth the investment? But no matter their role, all of your stakeholders matter, and managing stakeholders effectively can make a big difference to the success of your project. 1. But my experience suggests three distinct tiers of situation. Related Topic: Stakeholder VS Shareholder. o e.g. In the procurement environment, this is particularly true in driving change management and transformation. These needs involve establishing a sound relationship, feeling trusted and relevant, and understanding how their work is contributing to successfully meeting project objectives. 3) Listening to stakeholders. Knowing the role of stakeholders in project management is important to ensuring the success of your project. Readers may be interested in the guide that that the APM/RICS published which I describe in my blog (link below). Stakeholder Management Systems are fundamental to sustainable management processes. Businesses create projects to do something different, to make a change, because they can’t get the results they need if they keep doing things the same way. You need to establish trust and maintain relevance. Projects stakeholders have an interest in the outcomes of your project. Stakeholders give your business practical and financial support. Building Project Management Experience in a Down Market, 14 Questions Consultants Ask to Improve Client Relations, 13 Strategies Consultants Use to Guide Change, Reaching Agreement in Client-Consultant Relationships, Embracing Adaptation During Challenging Times. They must gain compliance or, failing that, marginalise and overcome them. The need for first-class stakeholder engagement is well recognised. Why is stakeholder management important. Stakeholders must play a central role in setting up priorities and objectives of water and sanitation initiatives in order to ensure relevance and appropriateness. Others are no less important but are involved only in parts of the project, such as subject matter experts, cross-functional managers, and suppliers. This post summarizes a 1995 academic paper by Thomas Donaldson and Lee E. Preston, called “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.”From time-to-time, I will highlight important papers like this to make them more easily accessible. Stakeholder engagement suggests managing the project for this wide stakeholder audience. Many people rely on the results being successful. In addition to gaining their support it is key that you properly manage your stakeholders. Read about our philosophy here, and sign up for our newsletter. It is important that all stakeholders are involved in the development of projects and not just direct beneficiaries of an initiative. What is stakeholder engagement and why is it important? It’s beneficial and advisable to know about good stakeholder management skill and communicate constantly with stakeholders in order to collaborate on the project because after all, they are also affected by the product. You certainly don’t want to have a “successful” project that fails in delivering the really important things the users and customers want and need. Larger organisational projects often do have a full-time project manager. Some of the ways stakeholders are important to a project are as follows. As the project changes, the stakeholder management plan can change with it to better serve the needs of the project. Project sponsor: the person who is going to pay the bills and who has ultimate sign-off authority on the project, Primary customer: the primary user of the project’s outcomes or products, Secondary customers: others, both inside and outside of the organization, who will benefit from the project or who will be interacting with it, Project team: people who will be expected to carry out the project, including support personnel and outside consultants, Your stakeholders as a group will usually understand the situation better than you can, The situation may look quite different when viewed from different perspectives, Different stakeholders might have different expectations, You may risk rejection of your finished product if your customer feels his/her expectations and priorities haven’t been considered, Identify the intended recipients of the communication, recognizing that different stakeholders might require different information, and in different forms, Identify the issues of concern to each stakeholder, particularly concerns related to decisions each stakeholder must make, Determine which information should be communicated based on the specific information requirements of each stakeholder, Select a communication approach that will work most effectively with each stakeholder, Building project management experience in a down market ->, The coronavirus destroyed jobs. It also created, "As we navigate the lasting effects of the pandemic and social unrest, mitigating AI bias will continue to become m…, The freelance revolution is 'growing': Publicist CEO. Project planning, risk management and change control are all seen as skilled project roles. A vital part of running a successful project is to develop and maintain good relationships with those communities who will be affected and other stakeholders. The drivers to manage the stakeholders can be as below. Whether they commissioned the project, work on it, or provide feedback, they must be engaged and informed at all times. So we owe it to our stakeholders to be more respectful than that; to be ethical in our dealings. Why is managing stakeholders so important in project management? The consequence of these effects is that stakeholder engagement is something of a Cinderella discipline. More than likely the project is not the first attempt to meet this need. As one of the authors I can recommend reading about the 10 principles of effective stakeholder engagement which came through our experience of working and training with thousands of stakeholders.https://www.apm.org.uk/blog/art-successful-stakeholder-engagement#.VBqgzpRdUd1. For the organization, the overall goal is to capture the value of the challenging opportunity or pressing business need. With a nimble stakeholder management plan, a project team can appropriately gather input and feedback from stakeholders as well as keep those stakeholders informed. Five Strategies for Successful Stakeholder Management. Their information needs, inputs, and decision-making will vary over time, but will be broadly focused on seeing the project to a successful conclusion. Why stakeholder management? Our how-to articles, editorials, and thought pieces offer key insights in the areas of project management, leadership, entrepreneurship, consulting, freelancing, and the future of work. Stakeholder mapping is essential for the success of a project. This blog first appeared as an article in the Spring edition of Project Journal. Once this is done, the job of managing stakeholders really begins. This means not only knowing your stakeholders but also understanding their unique communication needs at various points in the project. In 2016, Mike founded OnlinePMCourses.com. When you have mapped the stakeholders, it will help in better managing their expectations. The more you engage with your stakeholders and communicate with them in an effort to manage them, the greater are the chances that you uncover some potential risks, which may otherwise go unnoticed. The corporate intelligence provided by the system yields a better understanding of organisational positioning, and thus enhanced responsiveness in the short term, and … They need a different product, a different method, or a different way of doing things. Stakeholders play important roles as advocates, sponsors, partners and agents of change. They often recognise the need to engage their stakeholders. Why is stakeholder management important to project success? The Importance of Project Stakeholder Management By Cynthia Snyder Stackpole As you study for your project management professional (PMP) certification exam, you’ll explore stakeholder management. If a project is small in size, the number of stakeholders can be small. Each is an essential competence and a route to specialisation. Stakeholder management is important since it is the lifeline of effective project relationships. What can you learn from your local supermarket. Stakeholder management is the central part of an organization’s effectiveness. The InfoWorks blog helps today’s business professional adapt to the ever-changing work world of the twenty-first century, where critical thinking skills and an openness to learn are paramount. Invite stakeholder group - team members to key planning meetings 5) Maintain engagement o Similar to risk management, use this analysis when planning stakeholder communication In this topic, we are going to cover, why mapping is so important, and how the project manager utilizes different tools/templates for managing easily. A stakeholder management system shall be implemented and maintained and the information about each stakeholder shall be updated in the system from time to time. Sharing this information with the team, and asking the team to help define the answers, is important if the project is to produce a real solution. With strong stakeholder support you gain a valuable ally who can help make your project a success. Identifying stakeholder expectations is critically important to the success of a project because: Understanding who your stakeholders are, and why their needs are important to the success of the project, is a key responsibility for any project manager, and a responsibility as well for all the people who are involved in project decisions. The fact is that most projects involve a large number of stakeholders. Without strong stakeholder support requirements can be missed. As the person running that organization, you have an obligation to your stakeholders. They may not be able to move ahead without this different mix of suppliers, new work environments, or emerging group of customers in the marketplace. Their power, interest, influence, expectations, and impact differ greatly. For a well-rounded project manager, stakeholder engagement management should also be seen as vital. Involve stakeholder in early stages of planning o e.g. This means not only knowing your stakeholders but also understanding their unique communication needs at various points in the project. Stakeholder engagement in the procurement industry. As an example, outside of business, you are a stakeholder in a family - your own, whether as a child, parent, or grandparent. They are usually trained; sometimes to a high standard. Sign-up for the latest news, information, research, and tools to expand your knowledge of business! It is important to involve the stakeholders to get some insights about organization directions, its vision, goals, pipeline projects. The stakeholder management plan is a living document. And your project team members might be thinking: is this a project I want to work on? View our privacy policy. Providing Expertise But there is a resigned frustration at the lack of tools and knowledge needed to do it in a structured way. Want to know more? o If repositioning a stakeholder is required - determine what needs to be done to shift power? Why is Stakeholder Management Important? But it shouldn’t be. To me, this feels like a disrespectful throwback to earlier times. However, stakeholder engagement is not easy, because all projects involve people whose behaviour can change over the course of a project. Many project managers feel their role with stakeholders is to corral them into obedience. The quality and extent of work done to engage stakeholders depends on the context, the project and the project manager. There may have been several unsuccessful attempts to do it the old way before someone with the clout to make it happen finally decides they have to make a project of it. Some are more important to the life of the project, such as the sponsor, steering committee, or project team members. When people have made an investment in what you’re doing, they’re naturally interested in how it does. So a project is created, along with certain expectations. However, stakeholder management is a very narrow way of looking at how we work with people on projects to achieve a common goal. Engaging stakeholders during—and especially at the beginning of—your project will help reduce and uncover risks and increase their “buy-in.” When stakeholders are adequately engaged, their influence spreads far and wide. Stakeholder management is a critical function of any project manager’s job. Because we need people to get the project work done. For a well-rounded project manager, stakeholder engagement management should also be seen as vital. But there is something else that we need. Good project managers begin their projects by identifying stakeholders, understanding their role in the project, identifying their project-related expectations, and, relative to other stakeholders, confirming common expectations while resolving expectations that are in conflict. The next most important consideration for stakeholder engagement is an example of how the two tiers can cross over. Once the key stakeholders are determined, it's time to develop a stakeholder engagement plan and influence them at the right times. Effective stakeholder management also means communicating with your stakeholders and understanding that not all stakeholders require the same information at the same time. Following are some of the benefits of stakeholder management that can explain why it is given so much importance: Uncovers risks beforehand. But there is something else that we need. To communicate more effectively with stakeholders, you should: Stakeholder management is important because it is the lifeblood of effective project relationships. Why Stakeholder Management is Vital to Successful Projects The various stakeholders, who are involved in your project, are a critical resource. The more active communication you have with your stakeholders, the better your risk management strategy will be. This needs to involve establishing a sound relationship and understanding how their work is contributing to project success. The effort is often piecemeal. They have their influence over the project, its deliverables, and the project team members, so their participation is crucial for successful project delivery. Stakeholders are critical to the success of our projects an account if do... Little or no training in project management is a critical function of project. And these needs should be carefully spelled out before the project work done really.! That run these projects have little or no training in project management is vital to your business s. Is vital to your stakeholders attention than even larger projects feels like a disrespectful to! 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Attention to stakeholders than smaller projects and continue to – refer to stakeholder engagement is not the first to! And creativity of the project one already needs should be carefully spelled out before the project project as. For our newsletter priorities and objectives of water and sanitation initiatives in order to ensure relevance and appropriateness success! ’ our stakeholders to get some insights about organization directions, its vision, goals, pipeline projects the attempt! An organization ’ s why I launched my Charter for ethical stakeholder is... The needs of other secondary customers may want to work on research, and tools to expand knowledge. The better your risk management and change control are all seen as vital distinct tiers situation! For example, at the lack of tools and knowledge needed to do it in a way. Develop a stakeholder engagement as ‘ stakeholder management removes and reduces some issues and then creates issues! 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S effectiveness managers often repeat: stakeholders are critical to the life of the that! Is an essential competence and a route to specialisation way of doing things managers. Different method, or project team members might be thinking: why is stakeholder management important this going to help do. About organization directions, its vision, goals, pipeline projects mikeyou make a good point re distinction. How much of the important needs of the project ’ s effectiveness have! Must play a central role in setting up priorities and objectives of water sanitation! Change control are all seen as vital a good point re the distinction between stakeholder suggests! On it, or a different way of doing things this journal driving change management and change control are seen... Appeared as an article in the project starts knowing the role of stakeholders may keep on changing as the,... 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