What type of stakeholder is a project manager?

There has to be a significant effort toward identifying project stakeholders early on. This involves prioritizing stakeholders according to their vested interests in the project as well as their overall impact and influence on the project. The process of identifying stakeholders ideally starts when your sponsor approves the project charter.

There following documents and techniques can help you identify the stakeholders:

1. Project Charter

This document normally identifies the project head, key sponsors, clients, and influencers. The project charter can provide useful insights for identifying the stakeholders.

2. Reviewing the Enterprise Environmental Factors

The enterprise environmental factors (EEF) may involve factors such as competition, the company’s structure, and industry standards. Reviewing these factors can help you identify the stakeholders.

3. Interviewing the influencers

Interviewing the project management experts and key influencers is also instrumental in identifying the key stakeholders.

4. Asking questions

Brainstorming sessions between the project team members and experts are a great way of getting the stakeholders involved. For getting a clearer picture, try answering these questions:

• Who are this project’s shareholders?
• Who is involved in the project? Directly or indirectly.
• Who gains if the project is successful?
• Who are the suppliers?
• Who can accept or reject the project?
• Who might be affected by the project’s outcome?

Answering questions like these can go a long way in successfully identifying your project’s stakeholders.

5 Tips to effectively manage project stakeholders

Managing all the different stakeholders is perhaps the most critical part of your project. It is a project in and of itself. Managing stakeholders effectively will be an ongoing sub-project within your main project and you can’t afford to make mistakes here.

Here are the five ways which can help toward efficient management of project stakeholders:

1. Involve stakeholders throughout the project

Identify the stakeholders early on along with their types and create a stakeholder management plan. Engage them with interviews and questionnaires from time to time. If the stakeholders are external, add them to your project dashboard so they get a real-time view of the progress. They should also be able to provide feedback for the project deliverables.

2. All stakeholders must agree on the deliverables

Right from the start, all project stakeholders should be on the same page regarding the deliverables of the project. It is crucial to establish people’s roles and responsibilities as clearly as possible to avoid any confusion in the later stages of the project. Doing so is the best way to avoid project failure, delays, and cost overruns.

3. Define mechanisms that govern changes

Change requests are a common occurrence in complex projects. Many requirements defined in the earlier phases of the project might need to be revisited later. A pre-defined way of handling change requests is extremely important. Otherwise, issues like scope creep might affect your performance and reduce the productivity of your team.

4. Effective communication is key

Meaningful and valuable communication in project management is vital for the project’s success. The frequency of communication is also important and should be selected according to the involvement and interest of a particular stakeholder. Maintaining a stakeholder register from the initiating phase is one of the many proven ways of determining the frequency and method of communication for each stakeholder.

5. Try to see things from their perspective

Part of managing the stakeholders is to visualize the situation from their standpoint. You need to understand what each stakeholder signed up for and what are their specific contexts. If you can relate to their perception about how the project impacts them, you can be better prepared to manage them and their expectations.

Final thoughts

Stakeholders have a defining role in any project because they can negatively and positively influence it. Therefore, it’s essential for the project’s success that you can recognize your project stakeholders and understand their expectations during project initiations.

Identifying the stakeholders is the first step toward effectively managing them and using them to steer the project towards successful execution.

If you are new to project management, most probably you asked the following question; What is a stakeholder? and get confused about the answer. In general, the definition comprises the following; Stakeholders are people or organizations who are associated with a particular project and influenced by the outcomes of this project in a kind of way, and also they have an impact on the project’s objectives. Many categorizations can be made to classify different types of stakeholders and their roles in business, project management, healthcare, etc. In this article, we will talk about different types of stakeholders and their roles in project management to provide you a starting point to brainstorm all of the relevant parties involved in your business.

What is a Stakeholder?

Imagine yourself as a project manager of a large construction project. This whole project will be managed by you and your team from the beginning to the handover of the project. You are signing contracts with various vendors, suppliers, and sub-contractors. You deal with people who have the potential to affect your project every day either internal or external. Moreover, you are spending money to assign team members and bring construction equipment when needed.

Now, the question is coming;

• Who actually performs all of the tasks here?
• Who is actually managing this business?

The answer is “you” of course, but not just “you”. A lot of people or organizations have personal or financial interests in your project, and those people/organizations are your project’s stakeholders.

Understanding Different Types of Stakeholders

Whether they are internal or external to the organization, stakeholders are interested in the outcomes of the project and they may impact the success of your business. They may slow down processes or expedite tasks depending on how you deal with them. Therefore, as a project manager, if you are aware of the delta between their expectations and the requirements of your project, you will be most likely to complete your project successfully. The goal of this article is to analyze the most common types of stakeholders and discuss the requirements that each of them has.

Note that many professionals mistakenly think that stakeholders and shareholders are the same. However, they refer to two different concepts. Shareholders are people or groups that own at least one share of a company’s stock. In other words, shareholders can be defined as the owners in a company who expect to obtain the benefits of a business’s success. Stakeholders, on the other hand, a stakeholder is anyone who has any type of interest in a business or a project.

Typically, stakeholders can be classified according to their level of interest and involvement in the project/business. Each of them has different requirements and expectations. Therefore, developing a strategy do deal with each of them will be difficult, so grouping them according to their requirements, power, or influence will help you develop an effective strategy to manage your project’s stakeholders. In business and project management, common types of stakeholders can be categorized as follows;

• Internal / External
• Primary / Secondary
• Direct / Indirect

Internal stakeholders are those who are internal to the organization and the external stakeholders are individuals or groups who are external to the organization. For example, an employee is an internal stakeholder who can be affected directly by the project. A vendor is an example of an external stakeholder.

Primary stakeholders are those who directly affect or affected by the outcome. For that reason, they have the highest level of interest. On the other hand, secondary stakeholders have contributions to the project’s success but on a general level.

Direct stakeholders are involved in the daily activities directly within a project like workers. Indirect stakeholders are those who focus on the output of the project rather than the process of completing it. They often focus on pricing and availability like customers.

Below are common types of stakeholders in business and project management.

• Customers
• Employees
• Communities
• Owners
• Investors
• Creditors
• Suppliers
• Trade Unions
• Government Agencies
• Media

Let’s discuss common types of stakeholders and their roles in detail.

Customers

Customers are people or organizations who pay for the service or product. So, they are willing to buy the highest quality product/service at a fair price. Since a business doesn’t exist without customers, project managers and business owners should pay proper attention to their expectations.

Employees

Employees conduct business processes to produce a product or provide a service for customers. They undertake technical, managerial, and supervisory roles within the organization. They expect benefits like a better salary, social rights, career growth, and job satisfaction.

Communities

Communities can be important stakeholders, especially in large businesses and projects. They can impact projects or be impacted by a wide range of factors.

Investors

Investors include both stakeholders, shareholders, and owners. They focus on the financial returns of the project/organization. They have the right to participate in major financial and managerial decisions. Typically, an investor can be an external, primary, and direct stakeholder that can contribute ideas to improve and promote your business.

Suppliers

Suppliers and vendors are those who supply services and/or procure resources for the project. They are directly affected by the company’s operations. Suppliers are one of the most important types of stakeholders that you can work with during project management.

Owners

As the name suggests owners are owners of an organization. They supply funds to the project/organization to conduct business processes. They focus on the returns and outcomes of the project. Unlike investors, owners are internal stakeholders.

Creditors

Creditors are banks, suppliers, and bondholders who lend money to your projects/organization to support you to produce your product. You pay back to them by selling your products or services.

Trade Unions

Trade unions are membership-based organizations that are the legal representative for a unit of employees to secure them good working conditions, benefits through collective bargaining. From this aspect, they can affect your project’s or organization’s performance. They are external, secondary, and indirect stakeholders.

Government Agencies

Government agencies collect taxes from the company. From this aspect, they are external, secondary, and indirect stakeholders.

Media

In addition to the above list, media is an important stakeholder for an organization. Building strong media relationships is key to better brand recognition.

Conclusion

Stakeholders can also be classified as, Marketing, Technical, Sales, Executive, Internal, External, etc. Regardless of their title, you should be able to recognize how you can establish your stakeholder management style to deal with them to get their support for the success of your project. In this article, we discussed different types of stakeholders and their roles in project management. Share your approaches related to the topic with us through the comments section below.

See Also

Salience Model

Value Analysis

Further Reading

Planning effective stakeholder management strategies to do the same thing!

Wanda is the Director of Blue Horizons Professional Training Services which focuses on the delivery of PMI-SP, Stakeholder Management and other project related workshops, training, mentoring and consulting services. She holds a Doctor of Project Management from Harward University.