Considering the Organization and Stakeholders

As we know, when we initiate a project, we think about several things. We first define the goal of the project, we identify the objectives and the trade-offs among them, and finally, we think about the organization and the stakeholders. Let’s talk a little more on how we might go about identifying the organization involved in our project and the stakeholders affected by it. We’re going to see a few frameworks today, but let’s focus first on a set of key questions that might help us think about the organization and the stakeholders. One natural place to start is to ask, who will be doing the work? Will it be our own employees or are we relying on external contractors?

And if we are relying on external contractors, when exactly do they get involved? How much is under our control, and how much are we waiting on others? A second key question might be, who is the project manager going to be? Is he familiar with our company, is he familiar with the employees? Is he new to the setting? We may want to consider who is paying for the project. Who is funding the project and when will those funds be available? Next we’ll think about the consumption of the project or the service. Who is going to be using the project at the end of the day? Who is our final cust, customer?

Finally, a key question might be who else might be effected by this project? The general public, the government. How might they dictate outcomes related to our project?

Another framework that might be helpful to think about, when we think about organization stakeholders, is the stakeholders cycle. The stakeholders cycle has several steps to it and let me take you through it step by step. After I do that, I will give you a brief example, to make it more clear and to bring it to life a little bit. The stakeholder cycle starts by identifying all the stakeholders that are affected by our project and that affect the success of our project. We gather information about them and we identify their mission. We determine their strength and their weaknesses and especially, we pay attention to how those strength and weaknesses will affect our project and the success of our project.

Then we might predict their behavior, depending on alternative strategies that we might deploy, and we identify the strategy that we would like to incorporate into our project plan. I promised an example, let’s work through an example. Consider the project that has to do with developing a brand new cold press organic juice. The Lumi Juice Plant project and so, supermarkets might be a good example of a stakeholder, and especially let’s think about an example such as Whole Foods, a natural food, organic food supermarket. Well we gather information on them and we think about, what do they care about? What is their mission? What is Whole Foods’ passion?

In this case, following the same example, this specific chain of supermarkets thinks about healthy eating and they care about organic and making it safe for their consumers. Since we can determine, and it is clear for our project that working and cooperating with Whole Foods and with this large chain of supermarkets will be key to our success. We want to make sure we can find the strategy and that our project considers their mission. And therefore we’re going to predict what their behavior, based on our certifications and based on the quality of our final product. And therefor in this case our project will have to include a proper process to apply for a U.S.

Department of Agriculture Organic Certificate, in order to comply with our stakeholder’s mission. But this is just one framework that we might be able to use. Another framework that is very popular, and widely used in project management today, is thinking about a power interest grid. This framework was developed quite a while ago by Ed Freeman, one of my colleagues here at Darton, the University of Virginia. Ed talks about identifying where our stakeholders fall onto main axes, power and interests. Are they high power or low power? High interest or low interest? Once you’ve identify where our stakeholders fall, that will imply a certain strategy and a certain type of interaction.

For instance, stakeholders that have low power and are low interest, we just want to monitor, make sure that there is no change. Similarly, stakeholders that might have high power and low interest, we would like to keep satisfied and we would like to keep them satisfied because the outcome of them not being satisfied is critical and important to think about. If those stakeholders that have high power and low interest are not satisfied and they become high interest stakeholders, that is, probably, probably a signal to us that something is not going well with our project. And therefore, if we keep them satisfied, they will remain where they are at the low interest quadrant.

Some of the key projects in history that we’ve heard of, large scale projects that we know of that were not successful, typically fail on this idea of identifying their stakeholders and identifying their innovation properly. An example from the US is the opening, in 1995, is the opening of the Dench, Denver International Airport. The airport is known to have been plagued by a series of problems. It opened 16 months late, and it went $2 billion over budget. One of the fundamental mistakes that were made there, as we look back at history and analyze, is a lack of proper thought and proper plan, for the different stakeholders involved. There were multiple parties, and they had, were very different in nature.

The project manager was not set up for success, by not identifying the different interests that they have and their different power, on the success, and capability to effect the success of that project. From now on, when we set out to plan a project, we are thoughtful on the organization and the different stakeholders and their role in our project looking forward.