Project Management - Stakeholder Risk Management

In this article we will address the people swirling around your project: stakeholders. You can find some tips and other resources to maximize stakeholder involvement in the project.

"Who cares?"

"What are they about?"

"What should I do about it?"

These are the three simple questions a project team may ask to understand their stakeholders and develop a strategy to keep them happy.

As we developed a workshop on stakeholder management based on these three questions to one of our project management experts put all the pieces together when he said, "It's just risk to humans."

We think he is right. Review this classic risk management. Can you see the parallel?

1. Identify risks.

2. Analyze and quantify risk.

3. Develop a risk response.

So on your next (or current) project consider treating your stakeholders as opportunities or threats.

Step One: Identify risks (stakeholders)

As with risk management, we can only deal with stakeholders that we are aware of, so be creative and energetic in identifying stakeholders. Cast your net wide and consider all the stakeholders who will not make a peep, unless you step on toes. Regulators, end users, your customers' customers and internal support staff such as accounting or procurement. Too many project managers do not include these secondary stakeholders in their normal communication plans even get indignant when they obstruct the project. The risk we identify threats and opportunities. Stakeholders can project opponents as easily as advocates.

While trying to uncover the hidden players, do not forget the obvious: your team, your sponsor, and the people who will be approval of funding.

TIP: Ensure that stakeholders have a name and email id. Stakeholders are people, not organizations. "Facilities" is not going to sign on your change request, but Cindy, who runs the department can.

Step Two: Analyze and quantify the risk (what are they about?)

Risk management requires prioritizing risks according to likelihood and consequences. We can prioritize the stakeholders in the same way - by authority and interest. Interest means "how much they care?" And authority commensurate with their ability to influence the project.

Now analyze the high priority stakeholders. You will not be able to quantify your stakeholders as much as your project risks, but you can organize some key information: What are they about? How will the project affect them? How this project fits into their priorities? What do you need from them for the project to run smoothly?

Step three: Develop a risk response (What would you do about it?)

What we do to take advantage of our supporters and minimize the impact of our opponents will depend on the answers to the questions above. The more we know about our stakeholders, the better we can plan to work with them. One thing is certain: ignore them will sap their support and excite their opposition, so plan for communication.

Rapid changes in information technology continue to bring us new ways to flood our stakeholders with data, but that does not necessarily make us effective communicators. Who needs information? What information? How often? In what format? These questions form the basis of your communication plan. As you develop your communication plan remember these two tips:

1. Positive personal relationships are the foundation of effective communication. Personal relationships magnify the value of the technology we use to deliver information.

2. Use two or more media of communication to all stakeholders. For example, meetings must be accompanied by documentation.

The Secret to success

What is the secret behind the risk? Do it. Proactive, systematic risk management means finding the problems before they find you. Risk need not be complex, but it needs to be disciplined. The same goes for our stakeholders. Understanding who they are and what they want is often not so difficult. The key is to be proactive, to reach out and affect them before they affect you.

About LSA Global

Since 1995, LSA has helped organizations create and maintain distinct competitive advantages through human capital.

We work with leading organizations to drive success through their people and the strategies, structures, systems and processes that attract, inspire, develop and retain top talent. Our solutions focus on the following areas:

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We believe that our customers' market success is achieved through increased sales, lower costs and higher productivity. We are heavily marketed to the success of our clients and proud that over 85% of our business comes from repeat business with satisfied customers and that we have a 97% + customer satisfaction rating.