Last editedMay 20222 min read
Knowing how to manage stakeholders is one of the most important aspects when undertaking a project. Successfully meeting goals will only happen if all stakeholders agree on what those goals are before the project begins.
It is the project manager's responsibility to ensure all stakeholders are engaged and aware of the necessary steps and benefits of the project. But it can be overwhelming when a project has many stakeholders with different interests and biases. That's where a solid strategy as outlined below will come in useful.
In many cases, the project manager doesn't have any formal authority to ensure everybody responds positively to the various stages of the project. Communication and engagement with stakeholders are the only real tools a project manager has to ensure everyone is on board. In this article we will explain how to manage relationships with stakeholders to ensure successful project delivery.
What is a stakeholder?
In business terms, a stakeholder is any individual or group that has an interest in the outcome of a project, investment or business venture. They differ from shareholders as a stakeholder's interest is not necessarily financial as it is in the case of shareholders. A shareholder is often a stakeholder as well, depending on the situation, but their only interest is whether the project or venture increases or decreases the value of the shares they own.
Different stakeholders will have different interests, and they are often unrelated to the financial repercussions. Knowing how to manage all stakeholders will usually involve some negotiation or trade-off to satisfy all of them.
Ultimately, any entity affected by the actions and decisions of a business is a stakeholder in that business. Common examples of stakeholders include:
the general public
Tactics to manage stakeholder relationships
The four strategies we recommend for managing stakeholders can all be classed as some form of communication or engagement. It is important to understand each strategy in its own right so it can be implemented correctly by the project manager or business owner.
Here are the four strategies which will show you how to manage stakeholders:
1. Identify all stakeholders
The first stakeholder management strategy is the identification of every single stakeholder. A complete stakeholder analysis is important as you should not only communicate with the most obvious stakeholders at the beginning of a project, as you run the risk of other stakeholders getting involved later on in the project and causing unforeseen problems.
2. Agree on roles and goals
Once all stakeholders are identified, you can all agree on how the project will be undertaken. This includes the goals of the project, the means of achieving those goals, and the roles each stakeholder can play.
3. Communicate and compromise
Maintain communication throughout the project with the stakeholders so any obstacles and diversions can be discussed and figured out together. If changes to the original plan are necessary, work them out in conjunction with the stakeholders.
4. Develop trust
Not building a bond of trust with the stakeholders is a common project management mistake. They must know you have their best interests at heart, and this is especially important with certain stakeholders such as employees, customers and shareholders. Always practice empathy to understand each stakeholder's position and the reasons behind their demands and expectations.
We can help
If you’re interested in finding out more about how to manage shareholders, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.