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Is it Really Necessary?
The current emphasis on the trade and industry value of a project management plan is heightened by the need to recover from the effects of the recent economic downturn. Different interest groups will seriously evaluate the project for its monetary feasibility, environmental impacts and potential contribution to business stability. Thus, the task of performing an analysis of the stakeholders' interests cannot be relegated to one of the less important facets of project planning.
The best way to achieve a plan that every sector finds amenable is to present one that meets the expectations and/or needs of the key stakeholders. Although everything seems so straightforward and ideal, what does a project manager do if it turns out otherwise?
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A Sample Analysis
It is common for the project manager(s) to schedule face-to-face meetings with key stakeholders at the beginning of the project. One of the most important things to get from these meetings is how each stakeholder defines project success (their expectations). This information is then used to refine the project's purpose and objectives.
If for some reason the expectations are different from those of the project team's, this is an opportunity to communicate the team's position and justifications.
Expectations.can change over time and by considering the key players' or participants' stance during deliberations and in regular status meetings, the project manager can manage stakeholder interests with more ease. In addition, he or she should complement and complete the process by sending out information as part of the communications plan. Readers can download a copy of the sample stakeholder analysis in the Project Management Media Gallery.
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Start with the basics by completing the analysis chart and keep it in mind that this exercise should be done during the project planning stage.
1. Identify the stakeholder.
Identify the interest groups or those that are affected or will be affected by the business or a project in relation to its activities and its outcome. They may be individuals who are constantly in touch with the business operations on a daily basis or occasionally turns-up or reaches-out to owing to their direct or indirect interest in the goals or achievement of an undertaking.
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2. Determine their individual interests.
- Shareholders - Generally, their interests are typically value-based, and they make their decisions based on the weighted probability that the business goals or the project will result in considerable economic returns.
- The Executive Management – Their interests are identifiable with the interest of the shareholders. What is financially rewarding for the investors is also good for them because a large part of their remuneration is in the form of profit shares.
However, the effect of failed business ventures or operations are different if compared to those of the shareholders. Whereas the latter stand to lose only the monetary value of their investments, members of the executive management can lose their jobs, their reputation, their lifestyle, and their social standing aside from the loss of a lucrative source of potential income.
- The Managers and Employees – The individuals in this group are greatly motivated by their desire to ensure the security of their employment and the long-term stability of their sources of livelihood.
- The Customers – Their interest in the project is the value of the product or of a structure and the possible improvement of their economic conditions in terms of convenience or cost-saving opportunities.
- The Government – Their major interest in the business are the corresponding tax contributions and the potential rise of economic growth in the form of increased employment opportunities for the populace.
- Financing Institutions and Trade Creditors – Their interest in a business venture is the likely possibility of increased trading or financing relationships but could also be wary of heightened credit risk exposure.
- The Community and Socio-Civic Pressure Groups – Their interest would be on the impact of the business venture on the social and economic growth and development of the community and its people.
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3. Be ready with the individual expectations or requirements.
- Shareholders- It is important that the investors or shareholders are presented with well-prepared facts and figures that made use of reliable or proven valuation technique. Presentations should also include options, their comparative values and a justification as to why the plan being presented is the best choice as far as their interests are concerned.
- The Executive Management –Their requirements for facts and figures go beyond the initial presentation of the proposed project. They will ask for updates and for status reports in order to stay on top of the business operations. Their interest in the project includes the problems and drawbacks to be encountered as well as the manner of how the issues will be handled. They place a great degree of concern about the project’s development and its possible impact on the reputation of the company.
- The Managers and Employees – They expect to be duly compensated and / or rewarded for their efforts. Rewards considered are salary increments and the possibilities for advancements of their job positions, which equate to greater increments in remunerations and benefits.
- The Customers –Their requirement is basic to the project plan; that of being provided with products and services of good quality and reliable availability. However, the matter of economic value often prevails; hence, affordability of price is a primary requirement.
- The Government - This sector will require transparency to allow compliance-checking by all the related federal agencies and other government units.
- Financing Institutions and Trade Creditors – These external stakeholders may likewise require greater transparency from the company as a means to ensure that the monies owed to them will still be received at the appointed time.
- The Community and Socio-Civic Pressure Groups – They will require transparency through public hearings and forums.
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4. Determine their potential contribution to the project.
- Shareholder – They furnish the main bulk of the project’s financial requirements.
- The Executive Management – They have the capability to convince the shareholders (through the Board of Directors) since their interests are basically the same or in fact, even more so because their reputations are at stake. Hence the different facets of operations are under their command responsibility.
- The Managers and Employees – They perform the legwork and the actual execution of the project plans. The quality and the efficiency of the work they perform will impact the outcome of the project. In addition, their cooperation and ability to work with a team is regarded as crucial in carrying out the tasks according to the expectations of the key stakeholders. There should be an organized effort to sustain the latter’s continued support.
- The Customers – Their contribution will be determined by the project’s outcome. This is regarded as critical because the degree of customer satisfaction and support will be the true measure of the project’s success.
- The Government – This interest group is capable of providing additional sources of project fund or iincentives in the form of tax reductions and in some cases, endorsements.
- Financing Institutions and Trade Creditors – They are capable of providing additional financial support by way of trade credits or loans.
- The Community and Socio-Civic Pressure Groups – Their endorsements would equate to increased customer patronage but their disapproval presents additional threats or risks that the project will have to face.
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5. Deliberate on the perceived attitudes and / or adverse actions.
- Shareholder – The most common shareholder problem perceived is likely a lack of clarity about the project or not having a genuine interest in the proposed undertaking.
- The Executive Management – They may approve the technical schemes of the plans, but their greater concern would be the risks involved. Hence, there is always the possibility of issues pertaining to the financial requirements, the use of company resources, and the scope in relation to the timeframe and scheduling, as well as the methodologies to be used.
- The Managers and Employees – Not everyone in this sector can be expected to have the same perception and degree of enthusiasm as the others. They may be of the opinion that the methodologies or time frame of the project are inadequate or too short. Some others are not confident of top management’s decisions, while some would treat the project as just an ordinary source of monthly income.
- The Customers – Customers’ reactions often depend on the track record of the company and its existing products or services. New companies, however, have to contend with the typical wait-and-see attitude of their targeted market.
- The Government – Latest development and researches or successful lobbying campaigns can adversely impact the project. This could result in more rigid requirements, higher levees, or at worst, suspension or a shut-down of the company’s facilities.
- Financing Institutions and Trade Creditors – They may tend to show skepticism and at worst may require additional collaterals or guarantees.
- The Community and Socio-Civic Pressure Groups – They have the tendency to show skepticism and may raise actions based on conclusive presumptions.
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6. Formulate action plans.
For every stakeholder that poses possible threats, the project team should proceed with a stakeholder risk analysis for the purposes of determining the level of risks or threats involved. That way, the project team can deliberate at great length as to which groups require further information and actions as a means to win over their support. Those that present a lesser degree of risks can be addressed by instituting plans for risk mitigation.
- Management: the Need for New Corporate Performance Evaluation and Reporting Systems -- http://webcache.googleusercontent.com/search?q=cache:yPNQq1P1vTsJ:www.environmentalmanager.org/wp-content/uploads/2009/03/fulltext_id112770531placeboie.pdf+what+if+a+stakeholder+lacks+clarity+about+the+project&hl=en&gl=ph
- Image: Context diagram and Technical Criteria Derivation by Tricia Gilbert under Public Domain
- Sample stakeholder analysis created by Natasha Baker