How to Identify and Manage Project Stakeholders

Updated Aug 3, 2022.
project-stakeholder-management

No project manager can complete a project successfully without the input of others. You need to rely on and work with other project stakeholders, and even create project status reports to detail the project progress.

Project stakeholders play crucial roles in the success of any project. As a project manager, you need to communicate effectively and regularly with stakeholders, get and act on their feedback, and ensure they are satisfied with the project’s outcome.

In this article, you will learn about the various key project stakeholders involved in the phases of the project management life cycle

Let’s get started.

Stakeholders vs Key Project Stakeholders

Stakeholders

Project stakeholders comprise individuals or organizations as a whole who directly impact and are directly impacted by the project process. They are the tools through which project plans are implemented to meet specific goals and objectives. 

Stakeholders are one of the key elements of a successful project process. Note that project stakeholders can be negatively affected by the project process. This usually occurs when there is a lack of an efficient stakeholder management structure to attend to the needs of these stakeholders and this tends to have gruesome effects on the efficiency of the project completion effect. 

Stakeholders key elements
Source: Projectpundit

Key Project Stakeholders

In contrast, key project stakeholders are one step ahead of your regular stakeholders in the command chain. The job description of key project stakeholders comes with a level of influence and authority in controlling and determining the likely outcome of the project. 

Key project stakeholders usually make up the management team of any project process. They lay the groundwork for how and what is expected at the completion stage of the project process. 

In project management, key project stakeholders are often described as the yay or naysayers as their objectives are the basic foundation building blocks of any project process. The project team works round the clock to please this set of stakeholders.

Typical Key Holders in a Project

Key project stakeholders are the major project determinants. They define what is to be expected and carried out during the project process. Key project stakeholders usually have the final say of any project process as they constitute the reason behind the project in the first case.

  • Customers: They are the direct target audience of the product created or service to be rendered as they are often the direct beneficiary of the project outcome. Customers are crucial stakeholders that give meaning to the project process. 
  • Project Manager: The project manager is the central party of the project process. He or she stands as the bridge that links key project stakeholders to typical stakeholders. Project managers are directly in control of the project process. They are held accountable for the project outcome by the project sponsor and executives. 
  • Project Sponsor: The project sponsor is the financial backbone of the project process. This individual is tasked with the responsibility of meeting the capital and resources needs of the project.
  • Project Steering Committee: Every project steering committee consists of a team of advisors that performs consultancy functions from time to time aimed at providing the much-needed direction to the project team in times of confusion. 
  • Project Executives: They are the top dogs of the project process as they constitute the decision-making body. Project executives provide approval and consent for project strategies and key decisions to be implemented.

How to Do a Stakeholder Analysis

Conducting stakeholder analysis to identify and understand the needs and expectations of major interest holders is usually an uphill task for project managers. 

Stakeholders come with different expectations and mindsets towards the project process and the project manager must successfully manage these expectations. You need to ensure the best management decisions are taken so as not to breed contempt among project stakeholders.

Stakeholder Analysis
Source: Templatelab

1. Identify Your Stakeholders

List out who your stakeholders are and their individual and collective roles and responsibilities. You can achieve this by drawing up a project charter detailing who your project stakeholders are no matter how minute their contribution is to the project process. 

Identify Stakeholders
Source: Lucidchart

Group your stakeholders into either internal or external stakeholders to have an idea of their contributions. Stakeholders’ involvement during the project process varies. Some stakeholders are added during the project process implementation unlike the majority of others who are involved from the onset. 

Your stakeholder management analysis should cater to each stakeholder's individual and unique needs but not at the expense of the project process. Creating a close and inter-personal relationship with your project stakeholders is pivotal to the success of your stakeholder analysis.

2. Prioritize Your Stakeholders

Prioritizing your stakeholders’ help in the judicial distribution and use of limited project resources. Typical stakeholders need to be distinguished from key stakeholders to judiciously distribute time and resources appropriately. 

You can achieve this by the use of a power or attention grid based on each stakeholder's level of influence on the project process. 

Stakeholder Engagement Matrix
Source: Powerslides

Your attention span as a project manager would normally tilt towards the key stakeholders as opposed to the typical stakeholders since they constitute the critical decision-making and implementation body of the project process. 

However, giving attention to the key stakeholders should not give you ground to completely abandon the typical stakeholders. Every stakeholder in the project has various roles to play in contributing to the success of the project process regardless of how little those roles are.

3. Understand Your Stakeholders

You need to find a perfect working relationship with your project stakeholders. One way you can achieve this goal is through regular communication and engagement.

Holding regular meetings can help you understand your stakeholders more. This meeting should not be restricted to the project initiation phase but should span through all the phases of the project management life cycle. 

Regular meetings help to create an understanding between the project manager and project stakeholders. They provide insights into each project stakeholders’ expectations towards the project process. 

Project managers can use these meetings to get an understanding of each stakeholders’ involvement and their interpersonal relationship with other project stakeholders while also building relationships with individual project stakeholders.

How to Manage Your Project Key Stakeholders

Conducting stakeholder analysis alone is not enough to help you manage your key project stakeholders’ needs and expectations. The bulk of the work for a successful and efficient stakeholder utilization process comes down to proper stakeholder management. 

Stakeholder management involves making considerable efforts to ensure the project needs and expectations of all project stakeholders involved are met. 

In trying to please each project stakeholder, you need to ensure at all times that the project process comes first. Each project stakeholders’ expectations to be met has to be in accordance with the project charter and objectives.

1. Document Individual Stakeholders Roles and Expectations

Each project stakeholder involvement needs to be adequately documented by their various roles and contributions to the project process. This document serves as an efficient guide in tracking each project stakeholders’ impact on the project process. 

You can also track each project stakeholder's assigned task completion rate and step in if any individual is found deviating from their set course. This ensures you are always kept updated on the happenings around the project process and can step in abruptly where the need arises.

2. Regular and Effective Communication with Your Project Stakeholders

The major aim of a properly implemented project stakeholder management process is to ensure all the necessary individuals are kept in the loop of the happenings surrounding the project. 

Project managers must ensure all project stakeholders are adequately informed on the need to know about the project process with special emphasis placed on key project stakeholders. 

Relevant information should be properly disseminated to the right people for this information not to be a burden to other stakeholders due to its irrelevance. 

You need to explore various effective communication tools and find the best fit for each stakeholder. As much as you do not want to overwhelm your project stakeholders with too much information, providing less information probably can cause more damage to the project process. Finding the right balance for information sharing and distribution is key to effective stakeholder management. 

3. Provide Visibility for Project Stakeholders

There is a lot of buzz and chatter at the initial stage of a project process as all project stakeholders are anxious to make an immediate impact and achieve something huge. This often leads to an overly congested project process. If this is not adequately checked and monitored, it can negatively affect the project process. 

You can provide a clear and safe haven through the confusion by the utilization of a customized dashboard. The dashboard aims to help project managers keep track of each project stakeholder's involvement in the project process.

Your customized dashboard can also serve as an efficient project tracking tool. They contain key project information such as each project task and completion status, project team activities, project milestones, and the overall project progress made which helps to create much-needed visibility for your project process.

Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.