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Managing stakeholders

Why is stakeholder management important and how does it contribute to project outcomes? Learn more in this article.

Stakeholder management is a vital process that involves identifying, involving, and communicating with stakeholders throughout the project lifecycle. By actively engaging stakeholders, businesses can ensure project success and build strong relationships.

In this article, we will explore the importance of stakeholder management and how it contributes to improved project outcomes. We will take a look at the different types of stakeholders, levels of engagement, and strategies for effective communication.

Let’s delve into the world of stakeholders and discover how their involvement can enhance project delivery.

Stakeholder management is the practice of identifying and involving individuals or entities that have a vested interest or influence in a project. These stakeholders can include customers, team members, executives, business partners, suppliers, regulators, and more. By engaging stakeholders throughout the project, businesses can gather valuable insights, align expectations, and make informed decisions.

Stakeholders can be categorised into two broad groups: internal and external. Internal stakeholders comprise employees and executives within the organisation, while external stakeholders include business partners, regulators, communities, customers, investors, and competitors. It is essential to consider both types of stakeholders when developing a stakeholder management plan to ensure comprehensive engagement. There are many ways in which we can ensure that all stakeholders are considered during our planning.

The RACI matrix, a widely used stakeholder engagement model, outlines four levels of engagement: Responsible, Accountable, Consulted, and Informed.

  1. Responsible: This level includes team members and managers who are directly involved in project execution and hold responsibility for achieving project milestones.
  2. Accountable: The accountable stakeholder is an executive or high-level manager who bears ultimate responsibility for project success or failure.
  3. Consulted: These stakeholders possess expertise or authority in specific areas related to the project. Their input and guidance are sought during decision-making processes.
  4. Informed: Stakeholders at this level have minimal direct influence or interest in the project but should be kept informed of progress and outcomes.

Effective stakeholder management offers several benefits, including:

  1. Meeting stakeholder expectations: Involving stakeholders throughout the project ensures alignment with their needs and expectations, reducing the risk of project drift and dissatisfaction.
  2. Adaptation to changing market dynamics: By engaging external stakeholders such as customers and business partners, organisations can stay attuned to market shifts and adjust project direction accordingly.
  3. Enhancing the final product: Incorporating feedback from stakeholders, especially end-users, enables the development of products and services that better meet their needs and preferences.
  4. Winning people’s opinions: There may be stakeholders who totally disagree with your plans. By keeping them informed and with transparent communication, they may be more likely to understand your reasons and even support you eventually.

It is also important to consider those stakeholders who fall outside the business. Engaging external stakeholders is essential for effective stakeholder management. It is crucial to assess each stakeholder’s level of interaction and determine appropriate communication channels. For instance, competitors may be considered stakeholders but require careful management to avoid revealing sensitive information. Identifying the right level of engagement and maintaining consistent communication are key factors in building strong relationships with external stakeholders.

Effective stakeholder management is vital for project success. By actively engaging stakeholders and considering their input throughout the project lifecycle, businesses can meet expectations, adapt to market changes, and deliver superior products. Utilising tools like a RACI matrix and mapping stakeholders before a project begins further streamlines stakeholder management, enabling organisations to build strong relationships and drive project excellence.

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