Smooth sailing through complex projects is every business manager’s dream. While some businesses can effortlessly navigate choppy waters and steer a project to success, others face constant challenges and roadblocks.
Why?
One big factor is a business’s ability to manage the stakeholders involved in each project.
Whether you’re a project manager, a business owner, or an entrepreneur, understanding the intricacies of stakeholder management is the key to building a high-functioning and successful organization.
In this article, we’ll unravel the mysteries of stakeholder management. You’ll master the stakeholder management process and get insider tips for effective stakeholder engagement and communication.
What is a stakeholder?
Stakeholders are the people who have a stake in — or are impacted by — a project, organization, or initiative. They play an active role in project outcomes, and their involvement is crucial for achieving the desired results.
Effectively engaging with stakeholders means companies can use their expertise, insights, and contributions to improve project success and grow as a whole.
Internal and external stakeholders
Two types of stakeholders can significantly influence your organization’s success: internal and external. Let’s discuss each of them.
Internal stakeholders
Internal stakeholders are those within your company who have a direct interest in the project or initiative. These are the employees, project managers, and shareholders who are involved in the company’s day-to-day operations and decision-making processes.
Internal stakeholders’ support and active participation are key to achieving project goals. Effectively engaging them will help create a sense of ownership, boost morale, and enhance collaboration within the project team.
External stakeholders
On the other hand, external stakeholders are individuals or groups outside the company who can impact — or be impacted by — the project. They include customers, suppliers, government entities, and local communities.
External stakeholders can affect a project through their buying choices, official regulations, or even their opinion of the company’s name. Therefore, establishing and nurturing positive relationships with them is essential for a project’s sustainability, success, and long-term viability.
What is stakeholder management?
Picture this: you’re planning a conference that brings together industry experts, innovators, and decision-makers. As the event organizer, you have numerous tasks at hand, including securing sponsors, coordinating speakers, and providing a positive experience for attendees.
But there’s one crucial aspect that can make or break the success of your event — stakeholder management.
Stakeholder management is the art of engaging with people who have a vested interest in your project or initiative. It involves understanding stakeholders’ needs, managing their expectations, and building positive relationships with them.
Effectively managing stakeholders helps to ensure their active support, align their interests with your project objectives, and mitigate any potential conflicts that may arise.
3 benefits of stakeholder management
While there are many benefits of stakeholder management, here are three of the most significant:
Increased buy-in
In one year, three big global companies lost 20% to 56% of their market value when stakeholders stopped trusting them. In total, they lost $70 billion — a big price to pay.
Fortunately, however, you can generate more buy-in and support by actively involving stakeholders in the decision-making process and addressing their concerns and interests.
Buy-in refers to the level of commitment, agreement, and support that stakeholders have toward a project or initiative. When stakeholders have buy-in, they’re emotionally invested in the project’s success and are more likely to be supportive.
Reduced risk
Any project has risks. But involving stakeholders and listening to their needs, concerns, and objections will help you find and deal with potential problems early on. This collaborative approach helps prevent conflict and reduces the chances of things going off track.
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Stakeholders also bring new insights that can help you uncover blind spots and anticipate challenges, ultimately contributing to the development of effective risk management strategies and ensuring a project goes well even in the face of uncertainties.
The result? Reduced project risks and enhanced project resilience. Stakeholder engagement builds the foundation for collaboration, trust, and transparency, fostering a positive project environment.
Better project outcomes
Forty-one percent of employees believe more engagement would make their company a great place to work.
Engaged team members boost a project’s success and help ensure that the deliverables align with specific needs, goals, and objectives. You can also tap into your team’s diverse perspectives and collective expertise to drive project success.
The bottom line: leveraging the combined strengths of stakeholders can help you achieve better project outcomes.
A guide to developing a successful stakeholder management process
Stakeholder management doesn’t have to be complicated. When the stakes are high, simplify the process by breaking it down into the following manageable steps:
1. Identify your stakeholders
The first step in a stakeholder management plan is to identify both the internal and external stakeholders who have an interest or influence in your project or organization.
Consider the following questions when you’re identifying stakeholders:
- Who will your project impact?
- Who has an interest in your project?
- Who has the power to influence your project?
- Who wants your project to fail?
- Who wants your project to be successful?
Answering these questions will help you create a stakeholder blueprint, which will serve as a valuable tool for understanding the dynamics and relationships among your stakeholders.
2. Prioritize your key stakeholders
Next, evaluate each stakeholder’s influence, impact, and level of involvement in the project. This will help you understand the significance of their roles so you can allocate resources and attention effectively.
Identify the stakeholders who are most important for your project’s success, and prioritize their engagement and your communication with them.
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A good way to evaluate your stakeholders is to visualize their relationships and understand their needs through a stakeholder mapping exercise. This tool will help you pinpoint critical individuals who require proactive engagement so you can tailor your communication strategies accordingly.
3. Understand your stakeholders
Now, dig a little deeper. Conduct a stakeholder analysis to assess what your stakeholders want from the project and how best to engage with them.
This involves evaluating expectations, priorities, and any financial or emotional interests the stakeholders may have. Your communication and engagement strategies should align with their needs so you can strengthen your relationships with them.
For stakeholders who have a high amount of influence or are directly involved in the project, regular meetings can provide a platform for in-depth communication and evaluation of their specific concerns. For stakeholders who are interested but don’t directly participate, you can send newsletters or emails to keep them informed.
4. Define your stakeholders’ motives
Determine what drives your stakeholders’ actions. These insights will help you create a more targeted and effective stakeholder management plan that meets those individuals’ needs.
One way to define your stakeholders’ motives is through direct engagement focused on open communication, such as interviews and meetings. Surveys and feedback systems are another efficient option.
A well-crafted survey and feedback form can collect quantitative and qualitative data from many stakeholders in one go. Participants can express their opinions, provide suggestions, and voice concerns — anonymously if needed. Anonymity encourages honest and candid feedback, allowing you to gain valuable, bias-free insights into the stakeholders’ motives.
Analyzing mission statements, reports, and public statements can also provide valuable clues about stakeholder motives and interests.
As you define your stakeholders’ motives, also consider what you want from each of them. Clarify the specific roles and contributions you expect and how their input aligns with the project’s objectives so you can figure out your plan of action for them, too.
5. Devise an engagement plan
There’s no one-size-fits-all stakeholder management plan. Instead, you need to tailor your plan based on the data you gathered during the earlier steps.
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Consider the following methods of engaging your stakeholders:
- Frequent communication: Keep stakeholders updated on the project’s progress and actively seek their feedback. Communications channels can include face-to-face, phone calls, emails, or online tools like project management software.
- Consultation: Involve stakeholders in the decision-making process by organizing meetings, conducting surveys, or hosting focus groups. These methods allow them to contribute their insights, opinions, and suggestions, ensuring their perspectives are considered.
- Collaboration: Build a collaborative environment by closely working with your stakeholders to accomplish goals. Co-create solutions and collaborate on planning or decision-making so stakeholders actively participate in shaping the project’s direction.
3 insider tips for effective stakeholder management
Successful stakeholder management is at your fingertips with the following three tips:
1. Define the project
It’s important that all your stakeholders are on the same page. You can ensure this happens by clearly defining the project goals, scope, and deliverables. The act of defining creates a shared understanding, establishes a solid foundation for collaboration, and minimizes any potential miscommunication.
Moreover, this clarity empowers teams to set realistic timelines and effectively manage stakeholder involvement throughout the project journey.
When stakeholders have a clear picture of the project’s purpose and desired outcomes, they’re more likely to actively engage, contribute their expertise, and wholeheartedly support the project’s successful execution.
2. Communicate regularly
Effective communication is the cornerstone of a successful stakeholder management strategy, with 72% of business leaders believing that it has increased their teams’ productivity.
Consistent and transparent communication keeps stakeholders informed and up-to-date on the project progress. It also maintains their engagement throughout the project lifecycle.
Regular communication provides the opportunity to listen attentively to feedback from stakeholders, resolve any difficulties they might be facing, and build trust.
3. Use the right software
Considering that only 47% of projects are run by project management professionals, using project management software and collaboration tools is crucial.
The right software enables you to streamline your projects and stakeholder management in one platform.
Motion offers features such as shared calendars, task management, document sharing, and real-time communication, all of which serve to improve collaboration among stakeholders.
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With Motion, stakeholders can easily access project information, contribute their insights, and stay aligned on a project’s progress and milestones.
How Motion helps you manage stakeholders in 4 steps
Use Motion for stakeholder management in the following ways:
1. Plan a schedule
Managing stakeholders begins with creating a schedule to plan activities, record milestones, and set deadlines. A schedule provides a structured framework that lets people understand the project timeline and their roles within it.
Motion’s intelligent calendar takes this scheduling process to the next level through automation. It analyzes and organizes your team’s tasks to create an optimized schedule for everyone.
With this optimized schedule in place, all stakeholders have clear visibility into project information. This promotes transparency and accountability because the stakeholders stay informed on how they’re contributing to the project’s progress.
2. Assign tasks
Effectively delegating tasks to internal stakeholders ensures everyone knows their responsibilities and how they contribute to the project’s progress and success.
Motion’s Task Manager simplifies task delegation by automatically prioritizing and assigning tasks to the most suitable stakeholders. Our automation saves time and ensures that tasks are allocated based on individual capabilities and availability.
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You can create recurring tasks with Motion so you don’t waste time on mundane responsibilities. And stakeholders can dedicate their efforts to more critical project activities and strategic initiatives that push meaningful progress.
3. Keep detailed notes
Having a centralized location to store all your project notes, files, and attachments makes it easier to find them when you need them. Motion’s Project Manager helps you keep everything in one place, acting as a hub for all project-related information.
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You and your stakeholders can also directly communicate on projects via comments in which they’re free to leave opinions, provide feedback, ask questions, and actively engage in discussions.
Open communication significantly improves collaboration, as it helps you address concerns quickly and make sure that everyone is always up-to-date on the project’s progress and any new information.
4. Monitor progress
Regularly tracking a project’s progress not only lets you know what everyone is doing but also enables you to identify any deviations from the planned schedule or scope. Catching a mistake early allows for quick intervention and corrective action to be taken.
Moreover, monitoring progress helps you identify areas where additional resources or support may be required. When you’re clear about the status of your projects, you can more accurately and effectively communicate with both internal and external stakeholders.
Motion lets you view project progress in real time. With features like board views and list views, you can visualize how your project is going and easily share updates with both internal and external stakeholders.
Simplify your stakeholder management process with Motion
Motion is one easy-to-use tool with a world of stakeholder management capabilities inside. If you’re looking for a solution that will let you communicate, collaborate, and manage with ease, try Motion today!
