State government puts up a proposal to change the path of river Netravathi so that the dry lands above Western Ghats (in India) can be irrigated. This will benefit hundreds of farmers who will get water for most part of the year for irrigation.
However, a set of farmers whose farmlands will be acquired by the government for this project, stage a protest.
Who are the stakeholders in this project?
The farmers who stand to gain when river path is changed, farmers who are losing their farmlands, the government, or the construction company that executes the project?
The answer is – All of them. They are all stakeholders in the project.
Anyone who is directly or indirectly connected to the project or will be positively or negatively impacted by its outcome, or can affect the project or its outcome, is a stakeholder. Even if someone thinks they are going to be affected by the project they become stakeholders in the project!
A new discotheque is coming up near your home and you stand to lose your sleep due to their all-night-music parties – you automatically become a stakeholder in that ‘project’ of building the discotheque!
Why should you, as a project manager, be concerned about stakeholders?
You have all the reasons to be concerned about them – knowing who are the stakeholders, what influence can they exert on the project, and what are each of their interests can create wonders for your project!
For one, one of the stakeholder is going to pay for the project. Some stakeholders are just interested in knowing how the project is going in (CEO of your company, for instance) while some can demand that the way you conduct the project or the expected outcome be altered during execution of the project (project sponsor).
Identifying stakeholders will help you figure out who can potentially create problems for your project.
Yes. Read on.
PMBOK® defines Stakeholder as “an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project.”
If anyone’s interest is negatively affected by the project – they may try to disrupt the project. You need to figure out who (if any) are those people, study their interests and see how can you make ‘convert’ them.
If you can make them feel comfortable about the project, better still solve their concerns, they become your project’s biggest supporters! A good word from them may help you at unexpected times.
Your job is not done once you figure out the stakeholders. Stakeholders change!
Stakeholders may change as project progresses. Remember that a project is ‘progressively elaborated’. What you set out to do in the first place, may (mostly will) change to certain extent as project continues. A different set of people may now be affected by the project. And they become stakeholders.
The discotheque coming up next to your house has decided to offer valet parking to its guests in order to attract more customers. It decides to park guests’ cars on the nearby residential streets, taking away the convenience of people to park their cars in front of their houses. Now you have the entire neighborhood as stakeholders in the discotheque project.
Project manager needs to keep a regular check on the stakeholder register and update it as project progresses.
Take look at your project’s stakeholder list, and see whether there are additional stakeholders. You may discover that some of existing stakeholders are no longer needed!
Operations as Stakeholder!
Many projects need to interact with Operations in the organization. People involved in these Operations become stakeholders in the project. It is highly beneficial for the project manager to identify such people in advance, talk to them and understand any special needs or risks they bring on to the project.
Note: We shall learn more about identifying stakeholder and the influence they have on the project in the article that shows how to Identify Stakeholders.
A quick question before we move on to the next lesson.
You are manufacturing herbal toothpaste for Company A. Who amongst these are stakeholders in your project?
- sponsor of your project
- company A
- your CEO
- seller that sells you toothpaste packaging materials
- end-user of your toothpaste
- neighbors of your toothpaste manufacturing plant
- new trainee on your team
- your equipment supplier
- accounts department manager who is involving his staff in your project
- government agency that runs tests on industrial waste to check for environmental hazard
In the next lesson let us see what are Project Phases, and what you need to know about them for your PMP or CAPM exam.
Now that we know who are the stakeholders, let us see how to identify stakeholders in your project.