What do you understand as a stakeholder?
The key people who would get impacted by any business project are stakeholders. Also, they are responsible for and accountable for the project. In other words, key players of any project are referred to as stakeholders.
They focus on the outcome of the project. Stakeholders get impacted by a positive or negative output. All the stakeholders need to be on the same page. All the stakeholders need to be on the same page.
It's very important that there is no communication gap between them. Any kind of conflict needs to be resolved with negotiation.
For any organization some of the common stakeholders are -
Stakeholders Type -
Why stakeholders are important in business?
Well, the answer lies in the question as well. This is to run a successful business.
Stakeholders are the driving factor of any project.
The product line gets aligned because of them. They influence the project.
They get impacted by the overall delivery of the project.
Their interest lies in the successful output of the project. That’s they have a common business need.
Responsibility of Stakeholders -
Stakeholders constantly work to improve economic commitments to the business.
How to identify the stakeholders?
These questions when answered helps to identify the stakeholders.
It’s beneficial to identify the stakeholders. It falls during the early stages of the process. This helps to ensure that they are engaged from start. It gives them an idea of their role during the project.
Spotting out stakeholders improve the quality of the project. This is done with continuous feedback.
Stakeholder Identification - Onion Diagram
The stakeholder onion diagram has a project goal as the center point. It checks stakeholders relationships with the project goal.
It has multiple layers like an onion. All these layers have various stakeholders.
They are kept in multiple layers. This helps to establish relationships among them.
In the end, all the stakeholders are mapped to the project goal or end product. This is irrespective of their assigned layers.
The focus is to achieve successful delivery.
Check out the onion diagram -
Stakeholder Identification - Wheel
The stakeholder wheel helps to identify different groups of people. They might be external or internal. But the important factor is to map them.
It is a very powerful and simple tool. It helps to map people with the scope.
It helps to identify and define the roles of most of the key contributors.
This is how stakeholder wheel is depicted in picture format -
What do you mean by power influence matrix?
Let’s simplify this -
Since this is related to stakeholder management, it works towards it.
It is a tool that maps project goals. It is done based on the power and influence of stakeholders in the organization.
It focuses on key stakeholders who can make or break a project.
At times, they are grouped based on their power and influence.
The project manager needs to check on each of the stakeholders. Anytime a low power stakeholder might become a high power stakeholder.
It facilitates stakeholders prioritizations.
At some point in time, it is used as power interest technique but not always. Influence shows active participation. Power shows the level of authority.
Understanding of Stakeholder Engagement Techniques
Now we have a much better understanding of -
But then the project manager needs to really work hard. They need to regularly engage the stakeholders. Project Manager needs to identify -
Power/ Influence vs Interest
The following matrix shows Power/Influence vs Interest Matrix -
What do you mean by Stakeholder RACI?
RACI means - Responsible, Accountable, Consulted, Informed
These four angles are very important for stakeholders. It clarifies the role of each one of them.
It is used to have a clear overview of a complex project.
This is a very powerful tool in stakeholder management. It has different names in the market -
The four different roles of this matrix have different tasks to perform -
Visio could be used to build the RACI Matrix. It follows a specific standard of horizontal and vertical axis.
The horizontal axis specifies roles. The vertical axis specifies tasks.
In some projects, it is roles vs process as well.
Let's take the example of creating a purchase order.
Use - Case: New Year Gift Order to all employees
See the details of RACI Matrix -
Personas of Stakeholders in Stakeholder Management
Stakeholder personas are roles played by each stakeholder in the project journey. Success and failure of a project are highly dependent on personas.
Personas are mapped as per their ability. This step highly impacts the outcome of the project.
Personas might think like a leader or a contributor.
On a broader aspect, there are two kinds of personas -
External personas refer to stakeholders outside the organization. These are clients, competitors, end-users, etc.
Internals personas refer to people within the organization. These are the driving force at various levels in the firm.
Persona Identification Factors -
Understanding of Stakeholder Alignment and Sponsorship
Stakeholder alignment is quite a critical skill. It comes up with great responsibility and quite an experience.
Sponsors are stakeholders who provide funds. They also take recognition of the project.
The relationship between firm and sponsor is called partnership. Project Managers are representative during the journey of the project. The partnership is aided by an agreement.
The agreement holds -
This holds ground for future partnership.
A sponsor needs to give enough time to understand the project. Its duty of the project manager to align the sponsors with the project.
The sponsor invests in the project with the sole idea of having successful returns. This partnership needs to give the best results.
For that, the project needs to align the other stakeholders properly -
Steps involved in stakeholder alignment -
Stakeholder identification is the first step.
The way to manage internal stakeholders
Every stakeholder comes up with different needs and expectations. They have to be carefully handled for internal stakeholders.
So who are internal stakeholders - They are everyone in the organization.
They carry huge responsibility like -
Because of so many criteria and responsibilities managing them is not an easy game. The Project Manager needs to put continuous effort into managing them.
These are some of the ways to manage internal stakeholders -
Regular brainstorming helps in the successful analysis of stakeholders. Project Manager has to be mature enough to keep the right communication. All this comes with keep on asking questions.
Always remember, effective teamwork leads to a successful product. It’s always “We” that works and not “I”.
I believe in knowledge sharing and bringing change in people's lives. As a business analyst by profession, I love to explore everything about the way businesses should drive. I keep in touch with the latest business analysis updates.
Receive Latest Materials and Offers on Business Analyst Course