7 Stakeholder management Almost any person or organization with an interest in a project can be termed a stakeholder. ‘The type and interest of a stakeholder are of great importance to a project manager since they enable him or her to use these to the greatest benefit of the project. The process of listing, classifying and assessing the influence of these stakeholders is termed stakeholder anatysis. ‘Stakeholders can be divided into two main groups: 1 direct (or primary) stakeholders, and 2 indirect (or secondary) stakeholders. 1 Direct stakeholders ‘This group is made up, as the name implies, of all those directly associated or involved in the planning, administration or execution of the project. These include the client, project sponsor, project manager, members of the project team, technical and financial services providers, intemal or extemal consultants, material and equipment suppliers, site personnel, contractors and subcontractors as well as end users. In other words, people or organizations directly involved in all or some of the various phases of the project, 2 Indirect stakeholders ‘This group covers all those indirectly associated with the project such as of the organization and support department, accounts department, secretariat, senior management levels not directly responsible for the project, and last but not least the families of the project manager and team members. A sub-section of indirect stakeholders are those representing the regulatory authorities such as national and focal government, public utilities, licensing and inspecting organizations, technical instituzons, professional bodies, snd personal interest groups such as stockholders, labour unions and pressure groups Bach of these groups can contain 1 positive stakeholders who support the aims and objectives of the project 2 negative stakeholders who do not support the project and do not wish it to proceed. Direct stakeholders mainly consist of positive stakeholders as they are the ones concemed with the design and implementation of the project with the object of completing it within the specified parameters of time, cost and quality/performance. They therefore include the sponsor, project manager and the project design, construction/installation teams. This group could also hhave negative stakcholders such as employees of the end user, who would prefer to retain the ccxisting facility because the new installation might result in relocation or even redundancy.28 Project Managemen, Planning and Control ‘The indirect group contains probably the greatest number of potential negative stakeholders. ‘These could include environmental pressure groups, trade (labour) unions, local residents” associations, and even politicians (usually in opposition) who object to the project on principle ‘or on environmental grounds. Local residents” associations can be either positive or negative. For example when it has been decided to build a by-pass road around a town, the residents in the town may well be in favour 10 reduce traffic congestion in the town centre, while residents in the outer villages whose environment will be degraded by additional noise and pollution will undoubtedly protest and will try to stop the road being constructed. It is these pressure groups who cause the greatest problems to the project manager. In some situations, statulory/tegulatory authorities or even government agencies who have the power to issue or withhold permits, access, wayleaves or other consents can be considered as negative stakeholders. Figure 7.1 shows some of the types of people ot organizations in the different groups and subgroups. Although most negative stakeholders are clearly disruptive and tend to hamper progress, ofien in ingenious ways, they must nevertheless be given due consideration and afforded the ‘opportunity to state their case. Whether it is possible to change their attitude by debate or argument depends on the strength of theit convictions and the persuasiveness of the project supporters. Diplomacy and tact are essential when negotiating with potentially disruptive organizations and it is highly advisable to enlist experts to participate in the discussion process. Most large ‘organizations employ labour and public relation experts as well as lawyers well versed in ‘methods for dealing with difficult stakeholders, Their services can be of enormous help to the project manager. Tt can be seen therefore that for the project manager to be able to take advantage of the positive contributions of stakeholders and counter the negative ones most effectively, a detailed analysis must be carried out setting out the interests of each positive and negative stakeholder, ‘the impact of these interests on the project, the probability of occurrence, particularly in the cease of action by negative stakeholders and the actions, or reactions, to be taken Figure 7.2 shows how this information can best be presented for analysis “The Stakeholder column should contain the name of the organization and the main person ‘contact involved. Postive wakehores Negative sakeholies Diver Ties Tadirect Internal” [ Exterval | Taverna Extemal | Totemal | Exteral Sponsor } Client | Management| Stockholders | Disgrumiled” | Disgruntled énd employees | user Project | Contractors | Accounts Dept | Banks Pressure groups manager | Suppliers | HR dept Unions Consultants | Tech. depts Press (media) Project Families ‘Competitors ‘eam authorities Politicians Project Government Residents? office agencies associations: Figure 7.1 Stokeholder groupsStokeholder management 29 SuakchoWder [Interest [Influence [Probability | Action to Reaction 0 impact maximize support_| minimize disuption Figure 7.2 Sickeholder analysis ‘The Interest column states whether it is + or — and whether it is financial, technical, environmental, organizational, commercial, political, ete. “The Tnfluence/impact column sets out the possible effect of stakeholder interference, which nay be helpful or disruptive. This influence could affect the cost, me or performance eiterin the project. Clearly stakeholders with financial muscle must be of particular interest. ‘The Probability column can only be completed following a cursory risk analysis based on ‘experience and other techniques such as brainstorming, Delphi and historical surveys ‘The Action column relates to positive stakeholders and lists the best ways to generale support such as maintaining good personal relations, invitations to certain meetings, updated information, etc. "The Reaction column sets out the tactics 10 assuage unfounded fears, kil malicious rumours and minimize physical disruption. "The key to all these procedures is good communication and intelligence-gathering system.