Every project, no matter how small or large, is dependent on the involvement of stakeholders. It is easier to manage all issues and risks proactively if the project manager is able to understand stakeholder expectations, influences, and impacts.
Analyzing the impact of stakeholders has many benefits:
To improve the quality of your project, identify influential and powerful stakeholders.
Get support from influential stakeholders. This can help you win the right resources at the right time and increase the success rate of the project.
You must ensure that your communication frequency and project status report meet their requirements.
The project manager must understand the importance of balancing interests of all stakeholders. Different stakeholder groups may have different priorities, interests, and objectives.
Shareholders and the sales team expect profit and revenue generation to maximize their investment.
The Operations team would expect excellent performance to complete their tasks in a shorter time.
The marketing team would expect that the product has all the features they have advertised and promoted.
Employees want a positive work environment and projects that use the latest technologies to help them grow their careers.
Each department has their own interests in the project. It is the responsibility and responsibility of the project manager, to determine which interest should be given priority and order of priorities. Stakeholder conflict occurs when one stakeholder group’s needs are more important than the expectations of another. In such cases, the business must make the decisions that will affect its policies and procedures. In an insurance company, the priorities are in the order.
Regulatory/ Requirement
Revenue generation
Customer satisfaction
Performance enhancement
Employee satisfaction
Stakeholder analysis is essential. This can be done through the creation of a stakeholder engagement matrix. The fifth edition of PMBOK allows for classification of stakeholder engagement levels.
Category 1: Unaware: Not aware of the project and potential impact.
Category 2- Resistant: Can be assigned low priority if they are aware of the project and its potential impact.
Category 3 Neutral: Not supportive nor resistive, but aware of the project. This category cannot be taken lightly, but it must be understood.
Category 4 Supportive: Be aware of the project and its potential impact, and be supportive to any changes. This category should be given high priority in order to continue receiving the support you need.
Category 5 Leading: Be aware of the potential impact of the project and actively involved in making it a success. This must be given the highest priority and should be taken very seriously.
It is the responsibility of the project manager to know how to deal with conflict among stakeholders. You should know what to do and who to satisfy if there is conflict between stakeholders from categories 1 and 4. If the conflict is between 1 or 2, or between 1 to 3, then you should educate the stakeholder from category 1 about the project’s impact and how it will affect him. If the conflict is between categories 4 and 5, you should refer to your organization’s priority list. Legal and regulatory requirements always take precedence over revenue generation. This can vary from one organization to another, but your primary responsibility as a project manager is to achieve your company’s goals and objectives. You must manage conflicts taking all of these factors into account.