When you purchase a home, you consider how it affects your spouse; your children; the neighbors you’re leaving and the ones you’re going to be joining; the brother-in-law who will be sleeping on your couch; the bank through which you obtain your mortgage; the contractor who fixes the roof that will leak as soon as you close. All of these people are stakeholders; the key ones are those who have a big say, a lot of influence, or will be impacted in a major way, such as your spouse. In a business project environment, stakeholders are those who will be affected, directly or indirectly, by the project. Who are the key players? And what must they agree on to ensure a project has an optimal chance at success?

Identifying Key Stakeholders

When you throw a rock into a pond, it creates a ripple effect. When you throw a bigger rock, it creates a bigger ripple. Those ripples are the stakeholders; as your organization or project grows, it will affect more people, and identifying them becomes critical – and difficult! Again, think about who will be affected, directly – the IT Director who will be instrumental in implementing software upgrades – or indirectly – such as a branch customer service representative (CSR) who will be dealing with the end customer and who will see, use and benefit from the operating with the upgraded software.
 These CSRs, who deal with the customers on a day-to-day basis, need to be aware of the changes and impacts on the customers of any upgrade in software. In the past with changes to online banking systems the end client had access to better and more current information than the branch CSRs.  Why?  Because no one thought of the CSR as a stakeholder that would be affected by the project.

Stakeholders can be divided into multiple categories:

• Primary stakeholders are those making the decisions, funding the project and who are responsible for the ROI (i.e. Business Units executives, Vendors, IT executives, Operations)
• Secondary stakeholders are those directly impacted by the operation or process of the project (i.e. Operations, Production)
• Tertiary stakeholders are those who are interested in, or indirectly impacted by, the project (i.e. Marketing, Public affairs)

After you determine who will be affected, you prioritize them:

• Who has influence over other stakeholders? This does not necessarily have to be someone you would categorize as a “major player.”
• Who has power to advance or block initiatives?
• Who will have to implement the changes?
• Who is the “end-user”?

As you answer these questions, you can begin to formulate a plan for communication. For instance, does this person require high levels of engagement? Do you need to keep them happy? Or are they satisfied with regular updates? Is the level of effort commensurate with their level of power or influence? The COE approach to stakeholder relations is based on active communication. Information must be shared in a timely and accurate way to stakeholders. Again, some may require more “hand-holding,” but this level of transparency and access has to be open to all.

Stakeholder’s Stake in Success

The needs and interests of stakeholders are incredibly diverse, and they can often be contradictory. The larger and more complex the project, the more people tend to be polarized. In order to be successful, it is crucial that organizations work to make sure that stakeholders – whether a line manager or an executive – agree on the goals and deliverables of a project.

Everyone has a different view on how things should be done or on how the project should be approached. There is no way to accommodate every viewpoint, nor would that be advisable if there were. Instead, it is important to focus on agreeing on the overall outcome, involving stakeholders early in the process and on an ongoing basis, and maintaining clear, valuable communication.