Whether it’s investors or customers, stakeholders are important to every project. But what is a stakeholder? There’s more than one answer to that question. Let’s take some time to define what a stakeholder is, examples of stakeholders and free stakeholder templates that can help with stakeholder management.
What Is a Stakeholder?
A stakeholder is either an individual, group or organization that’s impacted by the outcome of a project or a business venture. Stakeholders have an interest in the success of the project and can be within or outside the organization that’s sponsoring the project. Stakeholders are important because they can have a positive or negative influence on the project with their decisions. There are also critical or key stakeholders, whose support is needed for the project to exist.
A stakeholder is a person, like any other member of the project, and some are easier to manage than others. You’ll have to learn to use stakeholder mapping techniques to identify who your key stakeholders are and make sure you meet their requirements.
The stakeholder has a vested interest in the project, meaning you’ll want to keep them updated regularly. ProjectManager is work and project management software that has real-time dashboards that monitor six project metrics. Dashboards require no setup and automatically show progress and performance in colorful graphs and charts. They are easily shareable to manage your stakeholders’ expectations. Get started with ProjectManager today for free.
Stakeholder vs. Shareholder
Stakeholders are not the same thing as shareholders. A stakeholder can be a wide variety of people impacted or invested in the project. For example, a stakeholder can be the owner or even the shareholder. But stakeholders can also be employees, bondholders, customers, suppliers and vendors.
A shareholder can be a stakeholder. A shareholder, though, is someone who has invested in a corporation. That corporation might initiate projects in that the shareholder is also a stakeholder. Put simply, shareholders are also stakeholders, but stakeholders are not always shareholders. That’s because a shareholder owns part of a public company through the purchase of stocks. A stakeholder has an interest in the corporation’s overall performance, not stock performance.
Types of Stakeholders
Stakeholders can be anyone with influence or anyone who can be influenced by the project. We’ve already seen that there can be many stakeholders, something that we’ll discuss below. All stakeholders can be broken into two groups: internal stakeholders and external stakeholders. Let’s take a look at both.
1. Internal Stakeholders
Internal stakeholders are within the organization. The project directly impacts them as they serve and are employed by the organization managing it. Internal stakeholders can include employees, owners, the board of directors, project managers, investors and more.
2. External Stakeholders
External stakeholders are outside of the organization and are indirectly impacted by the project. They’re influenced by the organization’s work but are not employees of the organization. These people can be suppliers, customers, creditors, clients, intermediaries, competitors, society, government and more.
As we mentioned, there are many types of stakeholders, many of which fall under the internal or external stakeholder categories. Let’s take a look at some of the more common stakeholder examples.
- Investors: These are stakeholders looking for a financial return and can be shareholders and debtholders. They have invested capital in the business and want a return on that investment.
- Employees: These stakeholders rely on their employment and job security. They have a direct stake in the organization as it supports them and provides them with benefits.
- Customers: These stakeholders want the product or service that the project delivers and they expect it to be of quality and contain value.
- Suppliers and Vendors: These stakeholders have their revenue tied up with the project as they sell goods and services to the business managing the project. Project success means more business for them.
- Communities: These stakeholders don’t want the project to negatively impact their health, safety or economic development. The organizations that are housed in their communities or working on projects in their communities can impact job creation, spending and more.
- Government: These stakeholders get taxes and gross domestic product from a project. They are major stakeholders as they collect taxes from both the company on a corporate level and individually from those it employs.
A stakeholder is a person, like any other member of the project, and some will be easier to manage than others. You’re going to have to learn to deal with a variety of personalities and make sure you have a productive dialogue to know the project goals you’ve been hired to meet. But first, who is the stakeholder?
How to Manage Project Stakeholders
Managing stakeholders is easy if you follow the right stakeholder management steps. Here are the steps that any project manager should follow when managing stakeholder relations.
1. Stakeholder Identification
Identifying the stakeholders in your project is key as the project’s success depends on it. If your stakeholder isn’t happy, the project isn’t a complete success. You’ll want to start this process as soon as the project charter is created.
A good place to start figuring out who your stakeholders are is by reviewing the project charter, which documents the reason for the project and appoints the project manager. Among the information about objects, budget, schedule, assumptions, constraints, project sponsors and top management, you can discern the stakeholders.
Make sure to review the contracts as stakeholders might be mentioned in these documents. Are there environmental factors or other organizations with key ties to the project? Look those over as they might supply you with the names of stakeholders. For example, if there are environmental factors dictated by the government, then the government is a stakeholder. Review their regulations and standards to stay on good terms with them.
2. Stakeholder Analysis
Once you identify your project stakeholders, it’s time for the stakeholder analysis phase. This is when you’ll gather information and requirements from them. You’ll also need to begin estimating their level of involvement and influence in your project to prepare stakeholder communication strategies and prioritize them.
3. Stakeholder Prioritization
A key question for anyone managing a project is how should you manage a stakeholder on the project? To complicate matters, there might be many stakeholders, and you should treat them like you would any other task on your to-do list: by prioritizing them.
Over the course of a project, one stakeholder might be more valuable in terms of the project objections and some might demand more attention than others. When you’re building your project schedule, make sure to define who those people are and at what point in the project phase you might need to attend to them more.
4. Stakeholder Engagement
Now we’ve come to the second part of our question. When we talk of stakeholder management, what we mean is creating a positive relationship with your stakeholders by meeting their expectations and whatever objectives they agreed to in the project. This relationship isn’t just granted, however. It must be earned. You can earn the trust and build a positive relationship with stakeholders through proactive communication and by listening to their needs.
One way to do this is by interviewing the project stakeholders—not all of them, but certainly the most important ones. You might need to speak to experts to get background information on particular fields or groups so when you do have one-on-one conversations with stakeholders, you’re well-informed and productive.
Like everything in project management, there’s a process for this:
- Document Stakeholder Communications. Do this formally by creating a stakeholder communication plan. Note their names and roles in the organization they represent. Document every conversation you have with these key project partners, both to record their interests and requests, but also to be able to review their information later for accuracy.
- Enforce Process. Next, you want to keep to a process of communications with stakeholders and make sure that process is transparent so everyone knows what to expect. This includes project requests or feedback. How you’ll document and respond to those requests needs to be subject to a formal process of review and approval. This lets the stakeholders know that requests are subject to review and that you have a process that you adhere to for formal requests.
- Provide Frequent Status Reports. Providing regular and timely status reports for stakeholders is crucial, but make sure to tailor the reports to the audience. You can go into details with team members while executives typically want more of an overview. Don’t forget to follow up with stakeholders and ask questions to see if they have any feedback.
- Dispel Myths. Your stakeholder might be working on multiple projects, which means they’re not going to have the same closeness to the project as you. But that doesn’t mean they’re not getting other information about your project from other sources. You don’t want them to be subject to gossip or get incorrect information that might sway their opinions on the project.
Stakeholder Management Templates
Managing stakeholders and their expectations is an important part of project management. You need to keep stakeholders updated but you don’t want them interrupting the important work of managing the project. Not only does ProjectManager offer software but also free templates for every stage of your project. Here are a few templates that deal with stakeholder management.
Before you can manage your stakeholders, you have to understand them in the context of your project. Our free stakeholder analysis template for Excel helps you to identify project stakeholders with a stakeholder analysis matrix. You can collect the key stakeholders by group and determine their level of participation, interest and power.
Our free stakeholder map template for Excel helps you see each stakeholder’s level of interest and influence. Their answers help you determine if they must be managed closely, kept satisfied, kept informed or monitored. There’s also a color key to make it easy to read; green means they’re supportive, yellow means they’re neutral and red means they’re a blocker.
Finally, once you understand your stakeholders, it’s time to set up a way to keep them informed. Our free communication plan template for Word is the ideal tool to define your objectives, channels and regularity by which your stakeholders expect to be updated. The free communication plan template works for all of your project communication needs, not only for communicating with stakeholders.
Use ProjectManager for Stakeholder Management
Now that you know what a stakeholder is and why it’s important to keep them in the loop during the life cycle of your project, make sure you have the right tools available to help. ProjectManager is work and project management software that helps you manage stakeholder expectations and update them with real-time data.
Detailed Reports for Stakeholder Presentations
We’ve shown how our real-time dashboard offers a big picture of the project, but stakeholders often want to go deeper into the data. With one click, you can generate the reports that stakeholders want to see, whether that’s project status, time or cost. If stakeholders have questions, know that every report can be filtered to show select data. Reports are easily shareable so stakeholders are always in the know.
Create Transparency With Shared Plans
The project plan is the roadmap that charts the direction of the project. It’s a critical document and one that changes throughout the project. Stakeholders need the project plan to keep the project’s progress in context, so project managers want an easy-to-share project plan. You can import and export project plans and share them with anyone. As the project plan changes, just send an updated one to your stakeholders and keep them in the loop.
Our tool can automate your busy work such as email notifications to keep stakeholders updated on status reports. We give stakeholders the transparency they want to stay informed, allowing the project manager and project team the room they need to complete the project on time, within budget and to stakeholders’ quality expectations.
When you’re reporting to stakeholders you want to make sure the process is both streamlined and accurate. ProjectManager makes sharing reports as easy as a click of a button. Our cloud-based project management software updates in real time, so you always have the most accurate, up-to-date project data for yourself and your stakeholders. Try our award-winning software today with this 30-day free trial.