Stakeholder management
/What is Stakeholder Management?
Stakeholder management is the ongoing maintenance of relationships with those impacted by a project. This concept is used when setting expectations for those who have invested time or money in a project, or are directly impacted by it. The intent of stakeholder management covers the topics noted below.
Investor Perceptions
To influence the perceptions of investors regarding the likely outcomes of their investments. In particular, it is used to corral over-optimism regarding the possibility of an unusually strong outcome.
Stakeholder Recommendations
To integrate into the project the recommendations of the stakeholders. When they see that their opinions are being incorporated into a project, their support of the project tends to increase.
Stakeholder Support
When there is full engagement by stakeholders, they are more likely to support the project in the face of criticism by third parties. This can be critical when a project is being heavily criticized.
This concept is a key task of the project manager, who depends on the goodwill of stakeholders to ensure the continuing inflow of funds while a project is in progress. It is also part of the investor relations officer's work, who must continually discuss the affairs of a business with its shareholders. Stakeholder management is especially important for longer and more complex projects, and especially those in which a large investment is being made.
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Stakeholder Communications
Stakeholder management requires ongoing communications with investors and others, sometimes on a milestone basis, to keep them apprised of the progress of a project, as well as the preliminary returns from it. They should also be kept aware of any problems encountered, so that they are not surprised when performance is lower than expected. Without this approach to stakeholder relations, it is likely that there will be stakeholder disappointment, accusations, and perhaps lawsuits regarding the improper use of funds. It is also possible that the remaining funding for a project will be withheld, or that its scope will be reduced.
How to Identify Stakeholders
The project manager will find that the number of people treated as stakeholders should be limited to just those having the most influence over a project. Expanding this group to peripheral players takes time away from the project manager, while not demonstrably increasing the level of support accorded to the project. Thus, stakeholder identification is a cost-benefit calculation, where the project manager only engages in it to the extent that there is a material return from doing so.