Project Stakeholder Management

Pernille Eskerod, Anna Lund Jepsen

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781351908382
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Formación empresarial

Carrying out a project as planned is not a guarantee for success. Projects may fail because project management does not take the requirements, wishes and concerns of stakeholders sufficiently into account. Projects can only be successful through contributions from stakeholders. And it is the stakeholders that evaluate whether they find the project successful - an evaluation based on criteria that go beyond receiving the project deliverables. More often than not, the criteria are implicit and change during the project course. This is an enormous challenge for project managers. The route to better projects, say Pernille Eskerod and Anna Lund Jepsen, lies in finding ways to improve project stakeholder management. To manage stakeholders effectively, you need to know your stakeholders, their behaviours and attitudes towards the project. The authors give guidance on how to adopt an analytical and structured approach; how to document, store and retrieve your knowledge; how to plan your stakeholder interactions in advance; and how to make your plans explicit, at the very least internally. A well-conceived plan can prevent you from being carried away in the 'heat of the moment' and help you spend your limited resources for stakeholder management in the best way. To make this plan, you need to agree on the objectives of your stakeholder strategy and ways to achieve them. Project Stakeholder Management offers tactics and tools founded on established marketing communications theory as well as strategic management for doing just that. This book is part of Gower's Fundamentals of Project Management Series.

CHAPTER 1

INTRODUCTION

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Today, many organizations, big or small, strive to create value through projects. There is considerable literature and many courses aimed at equipping project managers with theories and methods designed to increase the likelihood of project success. Project managers are offered many tools for dealing with the classical issues in the so-called ‘project triangle’ – accomplishing the project on time, within budget, and to specification and many project managers are well-educated and skilled in using these tools. They also increasingly face and try to meet additional success criteria to executing the project as planned – like ensuring that the project contributes to the strategic aims of the organization that established it.

Sadly, despite all this, we repeatedly read about projects that apparently ‘went wrong’; some failed to generate the stipulated benefits, others were never finished and petered out along the way, while still others were afterwards not seen as successful even though they were carried out as planned. A recurring theme in these failures is project managers who have not taken sufficiently into account the interests and motivations of the persons and entities that can affect or be affected by the project, the so-called project stakeholders. The consequences of this lack of attention are varied and significant: a software development project may not result in the stipulated benefits because the intended users of the product developed cannot or will not use it in the intended way; top management suddenly cuts the budget for a project because they have lost interest in it; the project course may be hindered by persons or entities that are against the project or its outcomes because of concerns about potential negative side effects. Such opponents could be competing project teams within the organization, non-government organizations (NGOs), political groups or unanticipated government regulators. Finally, the stipulated project benefits may have been ‘oversold’, and the project declared a fiasco in spite of delivering the project deliverables agreed upon.

The solution to this type of problems lies in finding better ways to deal with individuals or entities related to the project; to improve project stakeholder management. And that is the aim of this book. Many books and articles on stakeholder management treat stakeholders as ‘black-boxes’ at a rather aggregate level, while at the same time it is acknowledged that a disaggregation of the stakeholders often is necessary in order to really understand and effectively deal with the stakeholders (Ackermann and Eden 2011). For example, an institution such as a government may be a stakeholder in a specific project, but the government is represented by one or more departments and those departments by one or more persons. In other words, stakeholders are always represented by individuals and they act and react according to their beliefs, interests and motivations. Therefore, to manage stakeholders effectively, you need to understand what drives the behaviour of your stakeholders and how you can influence this behaviour. A major part of this book is grounded in behavioural theories to provide you with concepts and tools for this understanding. We hope that these concepts and tools will help you facilitate discussions on project stakeholders’ motivations with your immediate colleagues and with the stakeholders themselves.

Behavioural insights are not sufficient for good project stakeholder management. To take advantage of these insights, we believe that an analytical and structured approach for interacting with project stakeholders is of great value. By an analytical and structured approach we mean that you apply methods and tools for analysis; that you document and store your knowledge so that it is retrievable at a later stage; that you plan many of your stakeholder interactions ahead; and that you make your plans explicit, at least to yourself. Structured knowledge about the stakeholders will make you better equipped to deal with them in ways that are beneficial for both the project and the stakeholders; search for win–win situations and co-creation of value with your stakeholders. For example you can better respond to changes during the project if you know your stakeholders’ priorities and concerns, and you can also better draw from the stakeholders’ knowledge and experience if you know your stakeholder well. Further, the structured knowledge about the stakeholders will make you better equipped to deal with the challenges that they pose, either by adapting to their requirements and wishes or by planning ahead, trying to influence the stakeholders to change their expectations, requirements, wishes or concerns. In the case of unexpected situations that call for intuition and flexibility, you can better act in a proper and effective way if you have ‘done your homework’ and considered which strategies to apply when interacting with each stakeholder. A well-conceived plan can prevent you from being carried away by the ‘heat of the moment’ or the stakeholder who shouts the loudest. It can help you to act wisely because it will enable you to empathize with your stakeholders and see the project from their points of view. To make this plan, you need to agree on the objectives of your stakeholder strategy and ways to achieve them. We offer tactics and tools for doing just that. These are founded on the theory of marketing communications as well as strategic management.

To benefit from applying an analytical and structured approach, you need to involve other members of the project organization in your stakeholder management. You cannot manage project stakeholders properly if you lock yourself up in your office. Effective project stakeholder management requires continual interactions between the members of the project organization, for example between you and the project owner and you and the project team members. Such interactions allow you to explore and exploit insights and ideas held by each of the involved – and to develop common understandings with them about the stakeholders as well as agreements on how to make use of these understandings. This book helps you facilitate the process by giving you knowledge of ways to gather and structure information on stakeholders and to plan stakeholder communication and other forms of stakeholder interaction.

You may feel uncomfortable about the thought of carefully planned management of project stakeholders if you feel that this is manipulative or exploitative. Indeed, this can raise ethical issues, particularly when you face conflicting interests. Therefore we have included a chapter on this topic.

The term ‘management’ may suggest that, as the project manager, you set the scene and play a leading part; governing the stakeholders through some formal leadership authority. At most this will only be the case for certain stakeholders, for example the project team members, and rarely true of the large majority. In addition, a project manager will often only be able to offer certain types of incentives, like information sharing; a degree of autonomy; interesting challenges; and influence on the project process; and not financial incentives or future career oriented incentives. All of this implies that you need to think broadly about ways to manage stakeholders – and understand project stakeholder management as all purposeful stakeholder-related activities to support the success of your project.

As previously mentioned, the project manager typically performs stakeholder management in conjunction with others; for example the project team members. For ease of reading, we use the term ‘you’ or ‘project manager’ to cover all persons who have a responsibility for accomplishing the project. When we refer to project stakeholders, we mean individuals or entities represented by individuals who can affect or who can be affected by the project process or the project outcomes, building on Freeman (1984) and Andersen (2008).

The motto we have adopted for project stakeholder management is ‘Easy to Understand, Difficult to Master’. In other words, you need to practice… a lot. We wish you the best of luck and hope that you will find the theories and tools presented in this book useful.

CHAPTER 2

CONCEPTS AND ISSUES BEHIND PROJECT STAKEHOLDER MANAGEMENT

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Before we go into the detail of stakeholder motivations, how to do stakeholder analysis and possible techniques for stakeholder management, we need a toolbox of concepts and to understand the context in which the stakeholder management takes place – the project.

DEFINING IMPORTANT CONCEPTS

This book is about stakeholder management in projects. Projects are established to generate benefits for the permanent organization behind the project (the base organization) (Andersen 2008). For example, a company may initiate a construction project to establish more production capacity to increase output and thereby generate more profit. In this case, the company is the base organization and the increased profit is the desired benefit. Benefits are generated through project deliverables produced by the project team during the project process. In the above example, the production facility is a deliverable. Other examples of deliverables may be new products, accomplishment of events, replacement of machinery, or implementation of a new organizational structure. Unfortunately, most projects do not result solely in benefits. They also result in side effects which can be negative, positive or neutral. Negative side effects are also sometimes referred to as disbenefits. Benefits and side effects incurred by a project are project outcomes. In the production facility example, noise from the construction process which bothers the neighbours may be a negative side effect. This is an example of a side effect that will disappear when the project is completed. Other side effects such as negative environmental impacts may last for a long time. While the project deliverables are delivered during or at the end of the project process, project benefits and side effects may not materialize until sometime after the project has been closed down. This is likely to be the case for a project for which the main deliverable is a new hospital or for which the main deliverable is a new product line within a company. It is only once the impact of the hospital is felt in the local community or that the company can realize sales from its new product line that benefits and side effects are apparent.

As mentioned above, the project affects its stakeholders. However, the project stakeholders may also affect the project. Examples of project stakeholders are project investors, various decision makers, project teams, authorities, suppliers, customers and end users; each description, for example ‘project investors’, typically covers several persons or entities. In managing project stakeholders you must decide on the level of stakeholder disaggregation (Ackermann and Eden 2011). This concerns whether you will treat all the stakeholders covered by the same label as a single entity or whether you will single out one or more subgroups or persons. You may for example choose to differentiate between a lead investor and other investors. You may also differentiate on the basis of personal characteristics. Specific persons or groups might be especially supportive and others especially non-supportive towards the project. Further, you need to figure out if you should deal with all members of a stakeholder group collectively or with a single person representing the group; for example in the case of a group of employees. Typically, stakeholders are identified at an aggregated level in the beginning of the project, for example as ‘suppliers’ and ‘end users’, while more specific stakeholders or subgroups may emerge at later stages once you have developed more knowledge about both the project and the stakeholders.

In order to clarify responsibilities and accelerate project progress, project management literature strongly recommends that specific formal roles are assigned to persons participating in the project (Gareis 2005, Eskerod and Riis 2009). A ‘role’ is a set of expectations placed on a person or a team holding a specific position. Project roles are temporary. The most basic project organization consists of the following project roles: project owner, project manager and project team (consisting of project team members). The project owner represents the base organization and has the overall responsibility for the project. The projectmanager is the day-to-day manager of the project while the project team members produce the deliverables.

To be able to produce the project deliverables, the project requires sufficient contributions from stakeholders (Pfeffer and Salancik 1978). These may be financial and non-financial. They can take many forms, for example: approvals and guidelines from decision makers and authorities; expertise and working hours from the project team members; deliveries from suppliers; and compliance with the intended use of the project deliverables from the end users. Contribution implies a cost to stakeholders; this may be direct or indirect in the form of making an effort or spending time on the project. Individuals and groups can influence the project by providing or withholding contributions needed to accomplish the project. In other words, they have the potential to help or harm the project (building on Freeman 1984, Freeman, Harrison and Wicks 2007, Savage et al. 1991). Stakeholder management theory assumes that project stakeholders will only contribute as needed if they are motivated to do so. You therefore need to consider who is sufficiently motivated and who needs encouragement to contribute to the project. Motivation depends on expected costs and outcomes. Negotiations aimed at aligning expectations around project purpose(s), deliverables, scope and contributions are essential elements of stakeholder management as these activities enable influential stakeholders to air their views and – hopefully – align their expectations.

Project stakeholders will have their own interests and perspectives related to the project. That means that they will not necessarily contribute, on their own account, as you may wish. You must be alert to important stakeholders and aware of how they may act rather than simply considering what you need from them. The aim of project stakeholder management is to increase the likelihood of project success. Consequently, project stakeholder management consists of all the purposeful activities carried out in connection to the project stakeh...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• Acknowledgements
• 1 Introduction
• 2 Concepts and Issues Behind Project Stakeholder Management
• 3 What Motivates Project Stakeholders to Contribute?
• 4 Methods for Stakeholder Analysis
• 5 Planning Project Stakeholder Management
• 6 Ethical Issues
• 7 Easy to Understand, Difficult to Master
• Mini Cases
• References
• Index