By sustaining good working relationships with the individuals who are directly invested in the outcome of the project you stand a better chance of a successful project outcome. Effective communication, both listening and presenting is a vital way to keeping stakeholders onboard and engaged throughout the duration of the project.
The process involves systematically identifying who's who, analyzing their expectations, desires and needs and executing and implementing various tasks to engage with and for them. Without a robust stakeholder management approach you risk wasting resources, meandering aimlessly, missing vital milestones and project failure.
Most stakeholder management guides place much of the emphasis on project initiation or kick-off as the time to map out who the main stakeholders are and their level of interest. This guide supports the notion that stakeholder management and engagement is certainly dynamic and should be done consistently throughout the duration of the project. The idea isn't for your artifacts to gather dust, they are working tools that must be kept close and used for full effect.
Stakeholder Buy In
Without stakeholder engagement and buy-in, most projects fail. According to Nitin Nohria and Michael Beer, writing in the Harvard Business Review, around 70% of change project fail.
Despite some individual successes, however, change remains difficult to pull off, and few companies manage the process as well as they would like. Most of their initiatives—installing new technology, downsizing, restructuring, or trying to change corporate culture—have had low success rates. The brutal fact is that about 70% of all change initiatives fail.
If your stakeholders don’t respond then your project will probably fail, so understanding how to deal with the different types of personalities, positions and people is critical to you as a business analyst or business change professional. Before we dive into some of the detail, you must first identify who your stakeholders are!
The diagram above is from Assist Knowledge © and it displays stakeholder management within a project lifecycle. Much of the groundwork with stakeholders takes place at the start of a project, so it’s important to remember this next time you kick off a project, although, for consistency and cohesion, it bodes well to revisit your relationships with SMEs throughout the project duration.
Effective stakeholder management is critical to success for any business change project. Knowing who the stakeholders are and understanding what they expect as a project outcome is vital. As a business change professional, you must keep your stakeholders engaged throughout the duration of the project if you wish to deliver a viable solution.
Stakeholder Management Strategies
As you become more familiar with your stakeholders it is important to know who they are and where they fit. In today’s rapidly changing world, most products fit an Agile and CI/CD (continuous integration/ continuous deployment) framework. As a result, there is a constant stream of work and iterative improvements are the norm, so a clear and concise framework of who’s who, where they fit and their relationship to the outcome will allow you to be more precise with manging their expectations and the project.
Stakeholder Categories
Broadly speaking, stakeholders tend to fit into one of the following buckets:
- Partners
- Suppliers
- Regulators
- Employees
- Managers
- Owners
- Competitors
- Customers
This list is not industry specific but is a general round up of where you are most likely to slot your stakeholders into on a project. There are different methods to dealing with each kind of stakeholder.
Partners
In this category you’d expect organizations that provide specialist services such as data cleansing or offshore software development services. Services that are outsourced usually fall into this category.
Suppliers
Suppliers of goods and services must be considered during any business change project. Because they supply goods and or services to a company, the impact the change initiative has on them must be factored into the project. A company that relies on a supplier for a good and or service should ensure protocol is in place to manage the supplier’s relationship during the project.
Regulators
Neglect regulatory requirements, personnel, and expectations at your peril… If your business or project does not consider the regulatory framework in which it seeks to operate in, then this negligence could come back to bite you. External regulation exists in almost every modern business, so ensuring transparency for audits for example, is likely to be the norm in most business situations.
Employees
It’s likely that this is the most common category you will deal with as a business analyst or change management professional. This is because some employees are SMEs and SMEs drive the organizational change from the bottom up. Whether this is a group, department or cluster of departments, employees tend to represent the largest portion of stakeholders you’ll most likely deal with as a business change professional.
Managers
Most of the time managers will fit into the following categories:
- Board-level senior managers
- Supervisors
- Middle/junior managers
Ensuring you understand the structure of the organization, department and or team means you can manage expectations. Whilst eliciting requirements from an SME is the norm, you might require sign-off from their manager(s), so an understanding of who reports to who has wider implications beyond the apparent.
Owners
As the title suggests these individuals or groups have direct ownership of the business. Typically, you’d expect to deal directly with owners of small to medium sized businesses as larger corporations tend to have more complex ownership structures. Owners of small to medium sized businesses tend to carry most of the responsibility on their shoulders because the business is a passion of theirs, so remember that if you deal with them. They tend to be a lot closer to the processes and the impact of business change will typically have a larger impact due to the size of their company.
Competitors
From a business change perspective, competitors are keen to understand any changes being made due to the market perception the changes will make. Strategically, a competitor will need to be aware and privy to changes in case it will need to adapt its own plans. Ensure you have factored in how the competition could respond as it could impact the business change, you’re embarking on.
Customers
The recipients of the eventual change are critical to any business change project. Even in a B2B model or B2B2C, the end customer must be considered. In any project seeking to change something about the current state, it usually involves increasing market share, profits, scalability or providing a better service, for whom? End customers. Customers are the bread and butter of business, so factoring them into consideration is critical.
Plotting Stakeholders
Once you have a good idea of who you are dealing with you could benefit from plotting your stakeholders, this way, you have an immediate tool that allows you to understand who’s who and how best to deal with them.
If we plot Interest vs Power/Influence, we can start to see who we need to focus on for the outcome of the project. Owner of Dell computers said:
I think it is going to be very difficult to be a company in silos. I think the game has changed. We won't define our success by looking at the competitors but at how satisfied are our customers, how engaged are our internal stakeholders, and how good is our product pipeline.
In every business scenario, irrespective of industry, stakeholder management is essential, so a clear understanding of who you’re dealing with via a tool like the one we’ve mentioned gives that immediate clarity. When you have completed the diagram, you could get something that looks like this:
Clearly, not all stakeholders are created equal! How you allocate your time and to whom you spend most of your time is a direct reflection of your ability to be an effective business change professional, work smarter, not harder. Moreover, an analytical tool such as the one displayed is simple and effective and can give you an immediate shift in focus if you take the 10 minutes out and complete it. The diagram is not designed to be static, it could change over the project duration, so bare that in mind, it is very much a dynamic tool.
Managing Stakeholders
There are basic tenets to managing stakeholders and they can be summarized into these 3 steps:
1) Categorizing stakeholders
2) Know what you want from your stakeholders
3) Key messages to stakeholders
Categorizing Stakeholders
From the diagram presented above, you can see how stakeholder interest and therefore management could fluctuate over the course of a project. Therefore, it’s important to know who fits where and what category they fit into. Without this, you’ll be inefficient in your approach, spending too much time with a stakeholder who will benefit progress and not enough time on one who will.
Know what you want from your Stakeholders
Each stakeholder, whether they’re an SME, client, manager, partner etc, all contribute towards the end goal, which is successful project completion, so their influence should be made known over the duration of the project. Our Y axis plots influence levels and knowing this should drive exactly what you want from a stakeholder.
Key Messages to Stakeholders
How you communicate, what you say and how this is delivered is crucial. As a business analyst or and change professional, keeping people on-side, as well as having persuasion skills is important. Some good advice is highlighting what the stakeholder will gain to benefit from the pending changes should keep them naturally interested. This way, the stakeholder has direct interest in the project as is more likely to help when required.
In summary, making sure you categorize, identify what each stakeholder has to offer and know how to message your stakeholders encapsulates the basics of stakeholder management from a business analyst and change management perspective. There are more facets to this, but when you do these things, you have captured the essence of managing stakeholders in a business change environment.
Conclusion
Effective stakeholder management is essential to business change success. It should begin at project inception and should be maintained throughout the project duration. You are responsible for implementing business change, for whom? Stakeholders! If you don’t keep them on-board, your project will be much harder than it needs to be, don’t overlook this step.
