MS Project Management

Management & Development of Complex Projects

Course Code - 706

STAKEHOLDER ENGAGEMENT &

MANAGEMENT

Lecture # 7
 Summary of Previous Lecture
In previous Lecture, we have discussed about

 Construction projects types

 Structure of Construction Industry of Pakistan
 National economy and construction
 Work hunt in construction
 Registrations, decision to bid, construction project
organization
 Engaging supplier/ sub contractors, establishment of site
camp, site surveys
 Issues in construction industry
 Definition of Project Stakeholder
Many organizations may have different definitions of
stakeholders. In PMBOK 4, the stakeholders were defined as

„individuals and organizations that are actively involved

in the project, or whose interests may be affected as a
result of project execution or project completion“.

[Project Management Body of Knowledge, 4th Ediction 2008, p.23]

 Definition of Project Stakeholder
The definition of the project stakeholders has been revised in
PMBOK 5 and now project stakeholder is defined as

„ A stakeholder is an individual, group, or organization

who may affect, be affected by, or perceive itself to be
affected by a decision, activity, or outcome of a project“.

[Project Management Body of Knowledge, 5th Ediction 2013, p.28]

 Definition of Project Stakeholder

 Stakeholders include all members of the project team as

well as all interested entities that are internal or external
to the organization.
 The project team identifies internal and external, positive
and negative, and performing and advising stakeholders
in order to determine the project requirements and the
expectations of all parties involved.

[Project Management Body of Knowledge, 5th Ediction 2013, p.28]

 Project Stakeholders:
An Alternative Definition
Development Financing and Implementing Institutions
have a different perception as to who constitutes a
project’s stakeholders.

Example: According to the African Development Bank’s

Handbook on Stakeholder Consultation and Participation
in ADB Operations, Stakeholders are people/communities
who may - directly or indirectly, positively or negatively –
affect or be affected by the outcomes of projects or
programmes;
 The Project Stakeholders; Some Facts
Stakeholders must be „managed“ throughout a project so that their ideas
and concerns are taken into consideration, they can contribute to the
project, they understand the project decisions taken and accept them
more readily and they will be project supporters instead of project
adversaries

Depending on the nature of the project, the stakeholders can, at one

extreme, be very small in number and easily identifiable, or they can be
numerous, highly dispersed, and difficult to identify on the other.

Terms commonly used in the project management literature to denote

and differentiate stakeholders on a project are „Primary Stakeholders“
and „Secondary Stakeholders“, „Internal and External Stakeholders“ and
„Key Stakeholders“
 Project Stakeholder Management

“Project Stakeholder Management includes the processes

required to identify the people, groups, or organizations
that could impact or be impacted by the project, to
analyze stakeholder expectations and their impact on the
project, and to develop appropriate management
strategies for effectively engaging stakeholders in project
decisions and execution“.

[Project Management Body of Knowledge, 5th Ediction]

 Project Stakeholder Management
Identify Stakeholders:
The process of identifying the people, groups, or
organizations that could impact or be impacted by a
decision, activity, or outcome of the project; and analyzing
and documenting relevant information regarding their
interests, involvement, interdependencies, influence, and
potential impact on project success.

Plan Stakeholder Management

The process of developing appropriate management
strategies to effectively engage stakeholders throughout the
project life cycle, based on the analysis of their needs,
interests, and potential impact on project success.

Source: PMI‘s PMBOK 5

 Project Stakeholder Management
Manage Stakeholder Engagement
The process of communicating and working with
stakeholders to meet their needs/expectations, address
issues as they occur, and foster appropriate stakeholder
engagement in project activities throughout the project life
cycle.

Control Stakeholder Engagement

The process of monitoring overall project stakeholder
relationships and adjusting strategies and plans for
engaging stakeholders

Source: PMI‘s PMBOK 5

 HOW TO OBTAIN DEVELOPER SUPPORT
• Developers can be encouraged to support (and often finance) the
process through many of the same channels used to secure
institutional buy-in. In addition, the following incentives can be
offered:
• Selling the merits of stakeholder engagement such as the long-
term cost-savings, reduced conflict and sustainability benefits
• Offering institutional support and match funding for the process
• Taking a more hard-line approach, by making it a requirement of
the tender process – i.e. the developer would not be considered
unless they agreed to carry out (or commission) a full stakeholder
engagement process.

Source: PMI‘s PMBOK 5

 Project Stakeholder Management Framework

Project Stakeholder Management Process

1 Understand the Project Context

2 Identify All Project Stakeholders

update
3 Analyze and Map the Project Stakeholders

revise
4 Design Stakeholders Engagement Strategy

revise
5 Implement Stakeholders Engagement Strategy

Project Completion
 Understand the Project Context
(Complexity of Project)
High
On projects, the attention
given to managing the
stakeholders will vary,
depending on the type of
Project Complexity

stakeholder.

It is reasonable to assume that as

a project’s complexity increases,
more care needs to be exercised
by the project implementers in
“managing” the project
stakeholders otherwise the project
goal and the project investment
Low may be jeopardized.

Low Focus on Effectively Managing the Project Stakeholders High

 Understand the Project Context
(Complexity Involved in Managing Project Stakeholders)

High

Complex, capital-intensive
New Product Development and high-visibility projects
projects such as dams, roads, power
No. of Project Stakeholders

stations and pipelines.

Projects being imple-mented

Some social development
in and for individual
projects undertaken by
departments of
NGO’s
organizations.

Low

Level of Heterogenity of the Project Stakeholders and Complexity of

Low High
Managing Them
 Number of Stakeholders and Project
Stakeholder Engagement
High

More time,
effort and
Number of Stakeholders

cost must be
spent here
Moderate
Low

Importance of Developing and Implementing Effective Project Stakeholder

Low Engagement Strategies High
 New Technology and Project Stakeholder
Engagement
High

More time,
effort and
cost must be
spent here
Technological use

Moderate
Low

Importance of Developing and Implementing Effective Project Stakeholder

Low Engagement Strategies High
 Identify Stakeholders

Identify Stakeholders is the process of identifying the people,

groups, or organizations that could impact or be impacted by
a decision, activity, or outcome of the project, analyzing and
documenting relevant information regarding their interests,
involvement, interdependencies, influence, and potential
impact on project success
 Information Regarding Stakeholders

 When in project life cycle, this information will be

collected?
 What are the available sources of information on the
project stakeholders?
 Which tools can be used to gather information?
 Who will collect the information and when?
 Is the information accurate, adequate and cost-effective?
 How can the information be safeguarded?
 To whom, when and how will information be distributed?
 What will happen to the information after use?
 Identification of All Project Stakeholders

Brainstorming Survey

Ask the Consultant Ask Experienced Team Members

Organization‘s Existing
Ask other Project Managers
Documentation

Locals Case Studies

Other Organziation‘s Stakeholder

Website
Dirctory
 Project Primary & Secondary Stakeholders

Project primary stake-holders are those individuals or organizational

entities who or which have a contractual or legal obligation to the project
team and have the responsibility and authority to manage and commit
resources according to schedule, cost and technical performance
objectives.

Project secondary stakeholders are those individuals, groups of

individuals and organizational entities [and, as we shall see, communities
and even countries] who or which have no formal contractual relationship to
the project in question, but who/which believe they have a stake in it
because it can affect them in some way or other.
 Project Primary Stakeholders: Examples

Corporate Shareholders Project Team

Primary Stakeholders can be
Senior Management Project Partners
internal or external to the
Project-implementing
organization
Project Customers
Project Sponsor
& Users
Managing all these stake
Project Steering Project Input Suppliers holders is challenging but
Committee & Vendors (ext.) routine for the project
manager and project team
Project Management Project Contractors /
Office Subcontractors

Chief Project Officer /

Project Consultants
Programme Manager

Functional /
Project Financers (ext.)
Resource Managers

Local, State and Federal

Project Manager
Government Entities
 Project Secondary Stakeholders: Examples

Competitors Intervenor Groups

Secondary Stakeholders are
external to the
Consumer Interest project organization
Environmentalists
Groups
Managing secondary
Civic and Professional
stakeholders can be especially
Local Communities challenging for the project
Organizations
manager and project team

Political Organizations Private Individuals

Local, State and Federal

Tourists
Government Entities

Media The General Population

Countries, Regions,
Academia & Researchers
World Community
 Stakeholder Analysis

 Stakeholder analysis is a
technique of systematically
gathering and analyzing
quantitative and qualitative
information to determine whose
interests should be taken into
account throughout the project.
 It identifies the interests,
expectations, and influence of the
stakeholders and relates them to
the purpose of the project
Stakeholder Analysis

Stakeholder Analysis is a
useful and frequently
used tool by project
managers for identifying,
understanding and
planning for engaging
the stakeholders on a
project for success of the
same.
 Project Stakeholders: The Power Factor

Power Factor is the measurable degree to which

stakeholders can have a positive or negative
impact on a project.

On any given project, some stakeholders may be

quite powerful and able to intervene in it
‚positively‘ by providing resources and support to
the project manager and team or they may
intervene in it ‚negatively‘, causing at best a
delay or cost increase in the project, or a change
in its scope, or at worst causing its
abandonment.
 Power and Project Stakeholder Engagement
High

More time,
effort and
cost must be
Power of Stakeholder

spent here
Moderate
Low

Importance of Developing and Implementing Effective Project Stakeholder

Low Engagement Strategies High
 Dimensions of “Power Factor”?

There are many dimensions of “power factor”. For example:

• Formal authority and position in a hierarchy

• Control over decision-making processes
• Control over coalition-building processes
• Control over information
• Control over incentives, rewards and punishments
• Control over financial and material resources
• Control over the environment (e.g. physical, social, technological)
• Networks (individual, group, organizations)
• Knowledge, skills and experience
• Personality Traits
• Inter-personal skills (communication, motivation, inspiration)
• Ability to influence perceptions of individuals, groups, general public
 Power in Project Stakeholder Networks

Med Med
Managing stakeholder
- +
relationships and networks can
High Low
be complex and considerably
+ +
challenging for the project
manager and team.
High
Low
Some stakeholders may
+
appear relatively less powerful
and, hence, unimportant or
Low- Low Low irrelevant for the project.
+
However, they may be quite
Low- powerful because of their
Med
Low- excellent links to powerful
Low
Med stakeholders and ability to
Low
influence them about the
project.
Analysis of Interests and Concerns of Stakeholders

Issue-Based Framework of Stakeholder Analysis and few of

examples are
Economic
Financial
Social
Political Ideologies
Conservation (e.g. ecological, cultural, historical, archeological)
Health (air, water and land pollution)
Personal Development
General Attitude towards Change
Emotional & sentimental
Individual & Collective Prejudices
Group Mission
Image of Project Owner / Implementer
Security Concerns
 Interest and Project Stakeholder Engagement
High

More time,
effort and
Intrest of Key Stakeholder

cost must be
spent here
Moderate
Low

Importance of Developing and Implementing Effective Project Stakeholder

Low Engagement Strategies High
 Analysis of Influence of Stakeholders

Few of the tools which may be considered include but not

limited to

SWOT-Analysis of project stakeholders

Anticipated impact of the stakeholders on the project (high, medium, low)
Attitude of stakeholders towards project (supportive, neutral, adversarial)
Options available to project stakeholders to influence course of project
Stakeholder Register
Application of stakeholder visualization mapping tools
 Classification Models for Stakeholders Analysis

There are multiple classification models used for

stakeholders analysis, such as
Power/interest grid, grouping the stakeholders based on their level of authority
(“power”) and their level or concern (“interest”) regarding the project outcomes;
Power/influence grid, grouping the stakeholders based on their level of authority
(“power”) and their active involvement (“influence”) in the project;
Influence/impact grid, grouping the stakeholders based on their active
involvement (“influence”) in the project and their ability to effect changes to the
project’s planning or execution (“impact”); and
Salience model, describing classes of stakeholders based on their power (ability
to impose their will), urgency (need for immediate attention), and legitimacy (their
involvement is appropriate).
Power Interest Grid Example
Stakeholder Engagement
Guidelines
 Context

• This document has been developed to provide guidance around the area
of stakeholder engagement and communication. It is intended to serve as
a single reference point for all stakeholder engagement activities and will:
• Provide guidance for identifying and engaging with stakeholders;
• Ensure that stakeholder engagement activities are integrated and
undertaken in a co-ordinated manner; and
• Improve the effectiveness of engagement efforts undertaken.
 Stakeholder engagement process
Identify Stakeholders
 Identify stakeholder
groups
Key Activities
 Identify individual
stakeholders for select
stakeholder groups
 Validate and prioritize
stakeholder groups and
individuals for engagement
 Create initial stakeholder
list
 Stakeholder list
Key Deliverables/
Outcomes
Conduct Stakeholder
Assessment
 Conduct high-level
stakeholder assessment
 Develop stakeholder map
for key stakeholders based
on the assessment
 Confirm stakeholder group
roles and responsibilities
 Stakeholder map
 Updated stakeholder list
Cross-workstream Coordination
Establish Stakeholder
Engagement Plans
 Define initial stakeholder
communications
 Define engagement
activities by stakeholder
group
 Develop detailed
engagement plans and
timeline
 Launch initial stakeholder
engagement
communications
 Stakeholder
communication plan
 Stakeholder engagement
plan
 Stakeholder
communications
Engage Stakeholders
(ongoing)
 Develop detailed
communication plan to
support ongoing
engagement activities
 Execute stakeholder
engagement plan
 Conduct regular “pulse
checks” to monitor
progress and ensure each
stakeholder group is on
track
 Updated communication
plan
 Stakeholder
communication
 Stakeholder engagement
activities
 Feedback mechanisms
identified and launched
Stakeholder assessment approach
Assessment Approach
 Identify key stakeholder groups for the
workstream
 Conduct high-level stakeholder assessment
via briefing sessions to understand expectations
and potential change issues and risks
Expected Outcomes
 An indication of stakeholder understanding and
support of the program, who needs more
information/ time/ involvement, and what level of
effort is required to get and keep stakeholders
engaged
 A quantitative “baseline” assessment of
leadership alignment
 Information that will be used to plan and co-
ordinate the deployment actions and approach,
including change leadership, learning and
communications
 Identification of potential risks and issues from
the stakeholders’ perspective
 Development of action plans designed to engage
key stakeholders
 Developing the engagement plan
Engagement Plan Purpose
 Define the required level of stakeholder involvement
and associated scope of activities
 Set expectations about when and how stakeholder
groups will be engaged throughout the program (or
project) lifecycle
 Proactively manage activities to sustain
stakeholders’ level of engagement
 Build buy-in and commitment, and address any
potential road blocks across the program lifecycle
Example Engagement Activities
Example stakeholder engagement activities include,
but are not limited to:
 Distribution of regular (scheduled) program
newsletters/ bulletins
 Stakeholder briefings
 Communication of project milestone data through
regular email/ voicemail communication
 FAQ documents posted and updated on intranet
sites
 Practitioner participation in testing, pilots, etc.
 Periodic “pulse checks” to measure degree of buy-in,
engagement, etc.
 How the comms team can help
At each stage in the process the stakeholder engagement and communications team will be able to provide you input and
guidance as follows:
Step
Identify your stakeholders
and sponsors
Stakeholder assessment
Develop stakeholder
engagement strategy
Ongoing engagement
Information to capture
• Stakeholder name
• Contact information
• Who within the team owns the relationship
• The influence the stakeholder has on the
programme, rated High, Medium or Low
• The impact the programme has on the
stakeholder, rated High, Medium or Low
• Current view
• Desired view
• Relative positions of stakeholders by influence /
impact rating
• The level of engagement required with each
stakeholder, based on their position on the
stakeholder map
• The required outcome of the engagement
• Specific next steps for each stakeholder
• Change to stakeholder position
Input from comms team
• Provision of stakeholder list template
(excel spreadsheet)
• Provision of updated stakeholder list
template,
• Guidance on how to rank stakeholders
• Provision of stakeholder map template
• Advice on engaging with stakeholders
• Stakeholder engagement strategy
template
• Information on other engagement
activities ongoing with stakeholders
• Communications material
• Updates on stakeholder activity
 Example stakeholder list

Contact Relationship Required Current Influence on

Stakeholder Organisation
information owner commitment commitment programme
 Example stakeholder map
Stakeholder Matrix

Groups that
should drive the
Focus particular
attention on this
High Address Concerns Enlist Help & Support buy-in and
commitment of
group Design ways to involve those These individuals are the other stakeholders
individuals who are against the program’s allies. Their help
change or have the most to lose should be enlisted in the change
by it process, perhaps to get the “low
support” individuals on board
Impact of project on
Stakeholder

Medium
Keep Informed Involve as Needed
These individuals need to be These individuals should be
kept abreast of the change, but called upon as needed
are not seeking further
involvement in change planning

Low
Low Medium High
Critical to Success of Project

A stakeholder map is used to map stakeholders according to:

- Criticality to Success: Level of influence on the success of the program
- Impact: Level of impact experienced in their day-to-day activities in relation to the program
 Engagement of Stakeholders

The engagement level of the stakeholders can be classified

as follows
Unaware. Unaware of project and potential impacts.
Resistant. Aware of project and potential impacts and
resistant to change.
Neutral. Aware of project yet neither supportive nor
resistant.
Supportive. Aware of project and potential impacts and
supportive to change.
Leading. Aware of project and potential impacts and
actively engaged in ensuring the project is a success.
Stakeholder Engagement Assessment Matrix

This example shows that stakeholder 3 is at the desired

engagement level, while stakeholders 1 and 2 require
further communications and additional actions to move
them to the desired level of engagement
 Managing Engagement of Stakeholders
Management Skills:
Facilitate consensus toward
project objectives,
Influence people to support
the project,
Negotiate agreements to
satisfy the project needs, and
Modify organizational
behavior to accept the project Interpersonal Skills:
outcomes Building trust,
Resolving conflict,
Active listening, and
Overcoming resistance to
change
 Goal of Project Stakeholder Engagement

Project Stakeholders

Unaware Supportive Leading Neutral Resistant

Project achieves its

goal within time and
budget according to
its requirements and
to satisfaction of all
key stakeholders.
 SUMMARY OF THIS LECTURE
In this Lecture, we have discussed about

 Definition of stakeholder
 Stakeholder management
 Project stakeholder management processes & framework
 Context of project & stakeholder management
 Identify stakeholders
 Stakeholder analysis
 Stakeholder engagement framework
 END NOTE

Good judgment comes from experience, and

experience comes from bad judgment
THANK YOU!