P roject S takeholders M anagement Presented by Dr Tony Prensa PMP F or NWA PMI Chapter February 2014 Is that real Project Stakeholder Management Agenda Project Success Parameters ID: 300442
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Slide1
Effective Project Stakeholders Management
Presented by Dr. Tony Prensa, PMPFor NWA PMI ChapterFebruary 2014Slide2
Is that real?
Project Stakeholder ManagementSlide3
AgendaProject Success ParametersCurrent Facts!Literature reviewProject Stakeholder Management ProcessesIdentify StakeholdersPlan Stakeholder Management
Manage Stakeholder EngagementControl Stakeholder EngagementConcluding thoughtsQ&AReferences AdjournSlide4
Project Success ParametersSlide5
Current Facts!According to an IBM study, only 40% of projects meet schedule, budget and quality goals. Further, they found that the biggest barriers to success are
people factors.Geneca, a software development company, noted from its studies that ‘fuzzy business objectives, out-of-sync stakeholders and excessive rework mean that 75% of project participants lack confidence that their projects will succeed.’ A truly stunning 78% of respondents reported that the “
Business is usually or always out of sync with project requirements
”
McKinsey
recently found that ‘while an increasing number of non-IT executives give IT a score of 61% for basic services like email and laptop support, only 26% rank IT high in the most vital area of proactively
engaging
with
business leaders
on new ideas or systems enhancements
.’
One
Canadian
study actually stated:
“
Bad communications between parties are the cause of IT project failures in 57% of cases they studied
.”KPMG New Zealand found ‘…and incredible 70% of organizations have suffered at least one project failure in the prior 12 months and 50% of respondents indicated that their project failed to consistently achieve what they set out to achieve.’
Retrieved
from: http
://faethcoaching.com/it-project-failure-rates-facts-and-reasons
/,
2/10/14Slide6
Literature ReviewSlide7
Literature ReviewR. Edward Freeman (1984) Father of Stakeholder TheoryStakeholder theory is about identifying the groups who are stakeholders in a corporation and need to be managed
"Principle of Who or What Really Counts”Suggests to put stakeholders' needs at the beginning of any actionThe quality of relationships with stakeholders are the key determinant of corporate reputation Stakeholder management is the core of public affairs management Symmetric and asymmetric communication theory is relevant to stakeholder management Slide8
Literature Review (cont.)Study shows
a strong correlation between project communication and project stakeholders’ commitment.Lack of stakeholder commitment is listed as a key cause for project failure.
It
is caused because of inefficient project communication and inadequate project information.
Clarity of project information fosters commitment among stakeholders.
Effective project communication makes workers feel that they are cared
B
oosts
their commitment to undertake
tasks.
Effective project communication creates a feeling of responsibility and
attachment
between a stakeholder and the project tasks.
The study suggests that project managers should ensure efficient project communication
Project
team members cannot be committed to projects unless they have clear project goals.
(Nangoli, Namagembe, Ntayi
, & Ngoma, 2012)Slide9
Literature Review (cont.)A project stakeholder management process – Six Steps
Plan
Identify
Analyze
Communicate
Act
Follow up
(
Karlsen
, 2002)
Define the purpose
Identify
Analyze
Communicate
Strategize
Evaluate Slide10
Literature Review (cont.)Project Stakeholder Analysis/Strategies
(Karlsen, 2002)Mixed blessing
Non-supportive
Supportive
Marginal
Potential for collaboration
with the project
Collaborate
Defend
Involve
Monitor
Potential for collaboration
with the project
Potential to affect the
project
Potential to affect the
project
H
L
H
H
L
L
L
H
Project Stakeholder Categories
Project Stakeholder StrategiesSlide11
Management of project stakeholders is one of the most important tasks for a project manager because project’s success depends upon many individualsTrust is viewed as essential for stable relationships and vital for the maintenance of
cooperationTrust enables cooperative behavior, Promotes adaptive organizational forms, reduces damaging conflicts and transaction costs, and promotes more effective responses to crisisTrust is something that must be earned over time by listening, talking and making sure that you “walk the talk”.The study results show that the parties should be aware of how trust is built in relations
Which
factors are important in building trust.
Emphasis should be put on improving communication
skills
Behaving
reliably, showing commitment, being sincere, benevolent and competent, having and acting with integrity, working towards reaching project milestones and establishing common goals.
Clarify the roles and responsibilities in the beginning of the project.
(
Karlsen
,
Græe
, & Mona, 2008)
Literature Review (cont.)Slide12
(Karlsen, Græe, & Mona, 2008) Literature Review (cont.)
The model for trust building in a project-stakeholder relationshipTrust
Project
Stakeholder
Good communication
Commitment
Sincerity
Benevolence
Reliable
behavior
Goal congruence
Integrity
Competence
Reaching project milestones
Factors
FactorsSlide13
Stakeholder theoryTo identify, classify and categorize stakeholder and understand behaviorManage stakeholder more strategicallyUnderstanding project stakeholders needs and requirements
Is key for project success.Lack of understanding of internal/external project stakeholders and their interests Might impact project success.Carefully consider external stakeholders and their influence on projects
The external stakeholder environment involves all external stakeholders of the project and relationships between them.
Interpretation model: Scan and collect data; analyze and interpret data; make decisions and take action (
Aaltonen
, 2011)
Openness, dialogue and active engagement of stakeholders, in the front-end phases of the
project
Reduce
conflict in the project execution phase.
(
Aaltonen
, 2011)
Literature Review (cont.)Slide14
Literature Review (cont.)(Jepsen
& Eskerod, 2009)“Effective project managers require keen analytical and intuitive skills to identifystakeholders and work with them to understand their expectations and influence upon
project success. This facilitates managing a process that maximizes stakeholder positive
i
nput
and minimizes any potential detrimental impact”
(
Jepsen
&
Eskerod
, 2009, p.2).
Stakeholder
Area of interest
Contributions
Expectations
Power
Strategy
Responsible
Stakeholder
Active
Opposition
Passive
Opposition
Neutral
Passive
Support
Active
Support
Suppliers
XO
Top
Management
X
Peers
X
Grumbler
Stakeholder Register
Stakeholder commitment
matrix
X = current position, O = necessary/wanted position
O
O
X
OSlide15
Project Stakeholder ManagementSlide16
Project stakeholders The definitionIndividuals, groups, or organizations who may affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of a
project.(PMI, 2013)Slide17
Project Stakeholders
Project
Financial
institutions
Client/
customers
End Users
Competitors
Suppliers/
Contractors
Controlling
Organizations
Consultants/
Advisers
Third Parties
Labor
Unions
Insurance
Companies
Line
Organizations
Public
Authorities
Press/Media
Performing
Organization
Project Manager
Project Team
Subject Matter Experts
Sponsor
Primary
Secundary
Internal
ExternalSlide18
Project stakeholdersIt is critical for project success to identify the stakeholders E
arly in the project or phase and to analyze their levels of interest, their individual expectations, as well as their importance and influence.This initial assessment should be reviewed and updated regularly.
Classify stakeholders according to their interest,
influence
and
involvement
in the project.
Project manager should focus on the
relationships
necessary to ensure the success of the projectSlide19
Project Stakeholder Management the definition
Processes required to identify the people, groups, or organizations that could impact or be impacted by the project,To analyze stakeholder expectations and their impact on the project,and develop appropriate management strategiesto effectively engaging stakeholders in project decisions and execution
.
Stakeholder management also focuses on continuous communication with stakeholders:
to understand their needs and expectations,
addressing issues as they occur,
managing conflicting interests and fostering appropriate stakeholder engagement in project decisions and activities
.
Stakeholder satisfaction should be managed as a key project objective
.
(PMI, 2013)
I am the PMSlide20
Project stakeholder management is designed to encourage
the use of proactive project management for limiting stakeholder activities that might affect the project negatively, and to
assist
the project team’s ability in taking advantage of opportunities to encourage stakeholder support of project goals.
(
Karlsen
,
Græe
, & Mona, 2008)
Project Stakeholder Management
Slide21
Project Stakeholder Management is also …Vital to develop an understanding that can generate appreciation and trust and lead to constructive
working relationships.Efficient management of the relationship between the project and its stakeholders is an important key to project success.
The project and its stakeholders can be viewed as a network
in
which the actors interact with each other and exchange information, resources, and results
.
Stakeholders ultimately determine whether a project is a success, based on the project results
.Slide22
Project Stakeholder Managementthe processes
(PMI, 2013)ProcessesSlide23
Identify stakeholdersThe key benefit of this process is that it allows the project manager to identify the appropriate focus for each stakeholder or group of stakeholders.
(PMI, 2013)Slide24
Identify Stakeholders Key QuestionsWho is threatening the target of this project?Who is most dependent on this project?
Has there been a similar project in the market? If so, to what extent did it succeed? Who was in charge and how did local stakeholders respond?Who possesses claims – including legal jurisdiction and customary use – over the project/resources at stake?Is any government departments to be involved in this project?
Are
there national and/or international bodies involved in this project because of specific laws or
treaties?
Who
are the people or groups most knowledgeable about, and capable of dealing with the project at
stake?
Are
the stakeholders and their interests stable across the globe or is there any identifiable pattern
exists?
Are
there major events/trends/activities currently affecting the stakeholders?
Is this project replaceable by other project(s)?Slide25
Stakeholder analysisTo systematically gathering and analyzing quantitative and qualitative information to determine stakeholders’ interests.To identify interests, expectations, and influence of the stakeholders and relates them to the purpose of the project.
To identify stakeholder relationships that can be leveraged to build coalitions and potential partnerships to enhance the project’s likelihood of success.
“Stakeholder analysis increases the project manager’s ability to anticipate opportunities and problems for the project at a time when the project team still has time and opportunity for maneuvering” (
Jepsen
&
Eskerod
, 2009, p.1).Slide26
All potential project stakeholders and relevant information (roles, departments, interests, knowledge, expectations, and influence levels.
The potential impact or support each stakeholder could generate, and classify them so as to define an approach strategy.How key stakeholders are likely to react or respond in various situations, in order to plan how to influence them to enhance their support and mitigate potential negative impacts.K
now
Y
our
S
takeholdersSlide27
Stakeholders Analysis Key QuestionsWho is directly responsible for decisions on issues important to the project?
Who holds positions of responsibility in interested organizations?Who is influential in the project area (both thematic and geographic areas)?Who
will be affected by the
project?
Who
will promote/support the project, provided that they are
involved?
Who
will obstruct/hinder the project if they are not
involved?
Who
has been involved in the area (thematic or geographic) in the
past?
Who
has not been involved up to now but should have been?Slide28
How to classify stakeholders?Power/Interest gridGrouping stakeholders based on level of authority (“power”) and concern (“interest”) regarding the project outcomes.Power/Influence grid
Grouping the stakeholders based on level of authority (“power”) and involvement (“influence) in the project.Influence/Impact gridGrouping stakeholders based on involvement (“influence) and their ability to effect changes to the project’s planning or execution (“impact)Salience ModelDescribing classes of stakeholders based on their power, urgency, and legitimacySlide29
Power/Interest GridSlide30
Example Power/Interest Grid
Keep Satisfied
Monitor
Manage
Closely
Keep
Informed
High
Power
Low
Low
Interest
High
A
B
H
F
G
D
C
E
High
LowSlide31
More techniques …Expert JudgmentTo ensure comprehensive identification and listing of stakeholders:Senior management
Other units with the performing organizationIdentified key stakeholdersExperienced project managers Subject matter expertsIndustry group and consultantsProfessional and technical associationsMeetings
Profile analysis meetings are project meetings designed to develop and understanding of major project stakeholders, and they can be used to exchange and analyze information about roles, interests, knowledge, and the overall position of each stakeholder facing the projectSlide32
Plan stakeholder managementThe process of developing appropriate management strategies to effectively engage stakeholders …To provide clear, actionable plan to interact with project stakeholders to support the project’s interests.
(PMI, 2013)Slide33
Why the project management plan?Contains life cycle selected for the project and the processes that will be applied to each phaseContains description of how work will be executed to accomplish the project objectivesContains description of how human resources requirements will be met and how roles and responsibilities, reporting relationships, and staffing management will be addressed and structured for the projectContains the change management plan that documents how changes will be monitored and controlled Contains need and techniques for communication among stakeholdersSlide34
Analytical techniquesStakeholder engagement throughout the project life cycle is critical for success.Engagement level of stakeholders can be sorted as follows:Unaware – unaware of project and potential impactsResistant – aware of project and potential impacts and resistant to changeNeutral
– aware of project yet neither supportive nor resistantSupportive – aware of project and potential impacts and supportive to changeLeading – aware of project and potential impacts and actively engaged in ensuring the project is a successSlide35
Stakeholder engagement assessment matrixStakeholder
UnawareResistantNeutralSupportiveLeadingStakeholder 1CD
Stakeholder 2
C
D
Stakeholder 3
D, C
C – current engagement
D – desired engagementSlide36
The stakeholder management planIt is a component of the project management plan and identifies the management strategies required to effectively engage stakeholders. It should contain at least:
Desired and current engagement levels of key stakeholdersScope and impact of change to stakeholdersIdentified interrelationships and potential overlap between stakeholdersStakeholder communication requirements for the current project phaseInformation to be distributed to stakeholders, including language, format, content, and level of detailReason for the distribution of that information and the expected impact to stakeholder engagement
Time frame and frequency for the distribution of required information to stakeholders
Method for updating and refining the stakeholder management plan as the project progresses and developsSlide37
Manage stakeholder engagementThe process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur, and foster appropriate stakeholder engagement in project activities.
(PMI, 2013)Slide38
Manage stakeholder engagement entails:Engaging stakeholders at appropriate project stages to obtain or confirm their continued commitment to the success of the projectManaging stakeholder expectations through negotiation and communication, ensuring project goals are achieved
Addressing potential concerns that have not yet become issues and anticipating future problems that may be raised by stakeholdersClarifying and resolving issues that have been identifiedSlide39
Why the communication management plan?It provides guidance and information on managing stakeholder expectations:Stakeholder communications requirements
Information to be communicated, including language, format, content, and level of detailReason for distribution of informationPerson or groups who will receive informationEscalation processSlide40
Management stakeholder engagementtools and techniquesCommunication methods
The methods of communication identified for each stakeholder in the communications management plan. The project manager decides how, when, and which of these methods are to be used in the project.Interpersonal skillsBuilding trustResolving conflictActive listeningOvercoming resistance to changeManagement skills
Facilitate consensus toward project objectives
Influence people to support the project
Negotiate agreements to satisfy the project needs
Modify organizational behavior to accept the project outcomesSlide41
Organizational process assets updates Stakeholder notificationsAbout resolved issues, approved changes, and general project status
Project reportsProject status, lessons learned, issue logs, closure reports, and outputs from other knowledge areas.Project presentationsProvided to project stakeholdersProject recordsCorrespondence, memos, meeting minutes, and other documents describing the projectFeedback from stakeholders
Concerning project operations can be distributed and used to modify or improve future performance of the project
Lessons learned documentation
Includes root cause analysis, corrective actions, other types of lessons learned about stakeholder management.Slide42
Control stakeholder engagementThe process of monitoring overall project stakeholder relationships and adjusting strategies and plans for engaging stakeholders. The key benefit of this process is that it will maintain or increase the efficiency and effectiveness of stakeholder engagement activities as the project evolves and its environment changes.
(PMI, 2013)Slide43
Concluding thoughtsProject managers have to ensure that they communicate the project information that is required at the different stages (Nangoli
, Namagembe, Ntayi, & Ngoma, 2012).Project managers should build good relations with the stakeholders who are identified as being most crucial for the end result (
Karlsen
,
Græe
, & Mona, 2008).
Trust
is
important
for
building
a
well-functioning
relationship (Karlsen, Græe, & Mona, 2008). Project success is tied to effectively communicating and managing relationships with the various stakeholders of the project. This makes stakeholder management an important issue in project management (
Assudani & Kloppenborg
, 2010
).
Project manager should make deliberate attempts to exert influence on project stakeholders so that they deliver their contributions to the project (
Jepsen
&
Eskerod
, 2009
.
Keep in mind that stakeholders are critical for your success!Slide44
Questions and AnswersSlide45
ReferencesAaltonen , K. (2011). Project Stakeholder Analysis as an environmental interpretation process. International
Journal of Project Management , 29 (2011) 165-183. Assudani, R., & Kloppenborg, T. J. (2010). Managing stakeholders for project management success: an emergent model of stakeholders. Journal Of General Management, 35(3), 67-80. Karlsen, J. T., Græe, K., & Mona, J. M. (2008). Building trust in project-stakeholder relationships. Baltic Journal of Management, 3(1), 7-22.
doi:http
://
dx.doi.org
/10.1108/17465260810844239
Karlsen
, J. T. (2002).
Project Stakeholder Management.
Engineering Management Journal, 14
(4).
Jepsen
, A. L.,
Eskerod
, P. (2009). Stakeholder analysis in projects: Challenges in using current guidelines in the real world. International
Journal of Project Management , 27 (2009) 335-343.
Project Management Institute. (2013). A guide to the project management body of knowledge (pmbok® guide) – fifth edition [ebook]. Retrieved from CTU Online Library http://wow.coursesmart.com/C001850000035/firstsection# X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTkzNTU4OTY3OS9jNangoli, S., Namagembe, S., Ntayi, J. M., & Ngoma, M. (2012). Towards building project-stakeholder commitment. World Journal of Entrepreneurship, Management and Sustainable Development, 8(4), 233-245. doi:http://dx.doi.org/10.1108/20425961211276615Slide46
Effective Project Stakeholders Management
Presented by Dr. Tony Prensa, PMPFor NWA PMI ChapterFebruary 2014