Five Principles of Effective Project Stakeholder Engagement

The key benefits of managing stakeholder engagement involve seeking a wealth of extended support in order to proceed with the project smoothly and ensure that the deliverables are aligned with their expectations.

Stakeholder engagement and stakeholder relationship management are two critical factors in successful project implementation. It’s project managers’ responsibility to actively keep stakeholders informed about the project progress and address any needs from stakeholders that have been fulfilled during the delivery process. In most digital transformation projects, stakeholders include business analyst, project manager, domain subject matter expert, implementation subject matter expert, operational support, end user, customer, sponsor, regulator, supplier and tester. Based on project complexity and project state, the number of stakeholders and the level of communication varies significantly. Regardless of various stakeholder groups and their influence on the project, the golden rules of effective project stakeholder engagement are listed as follows.

Five Principles of Effective Project Stakeholder Engagement

1. Identify project stakeholders and their level of influence 

In a traditional plan-driven project, project managers are able to identify key stakeholders prior to commencing with the project, in most cases, by doing interviews with project sponsors, key decision makers and domain subject matter experts. However, in Agile projects, identifying stakeholders is an ongoing process running throughout the project implementation period. With the adoption of an adaptive approach where the solution evolves based on a cycle of learning and discovery, new project stakeholders may be involved as the feedback loop surges and the new requirements are brought on board. Apart from identifying the stakeholder group and constantly drive them into the feedback loop, assessing their level of power on the project is of great importance, particularly in the early stage of the project implementation. Understanding the influence and attitudes each stakeholder has can help develop strategies for obtaining buy-in and collaboration. Business analysts and project managers can compare how much influence is needed in order to implement the solution successfully against the amount of impact those stakeholders can bring. If there is a mismatch between the perceived influence and the actual influence required, a risk plan and corresponding solution should be developed.

2. Understand decision-making authority

Understanding the level of decision-making authority a stakeholder has over activities and changes during the project delivery process not only eliminates confusion upfront but also provides guidance when project managers look for a decision to be made or seek approval.

3. Define stakeholder collaboration

Collaboration can be either spontaneous or planned, with specific activities and outcomes determined ahead of time during collaboration planning. The main objective of defining stakeholder collaboration is to select the most appropriate approach that works best to meet the needs of each stakeholder group and ensure their involvement is maintained. Apart from the timing and frequency of collaboration, the delivery method, available tools and stakeholders’ preferences should also be taken into consideration when taking collaboration initiatives.

4. Evaluate stakeholders’ communication needs

When evaluating stakeholders’ communication needs, it always starts with 3W+1H questions. What information needs to be communicated. Who is the audience? When the communication should occur and how to deliver the communication as sometimes, stakeholders are not necessarily located in the same place geographically. Additionally, given the level of power of stakeholders and their preferences for communication, the formality of communication and the level of detail for the communication should be included, ensuring their communication requirements and expectation are stressed.

5. Stay active, stay consistent

Managing stakeholder engagement forms an essential part of stakeholder management and ensures that the solution always being aligned with business value. It is a process of managing stakeholders’ expectations, addressing their concerns and resolving any issues in a timely manner by analysing stakeholders’ characteristics, their attitude towards the project, their decision authority as well as their communication needs and their major considerations. Stay active to ignite the effective stakeholder engagement.