Monday, October 17, 2016

Applied project management#10 Identifying and prioritizing stakeholders

Very often I get this question 'What is the one key quality to be a scrum master / project manager?'. It is the ability to getting things done, very often through people who are not directly reporting to the manager. Ability to identify and influence the key stakeholders of the project, is key to getting things done on time.

The key steps of stakeholder management are;

  • Identifying the key stakeholders (Stakeholder register)
  • Classifying the stakeholders based on their power to influence the project and their interest in the project
  • Developing strategies to deal with stakeholders 

The project management body of knowledge (PMBOK), by PMI, USA have given a very good definition of stakeholders;

"Any one who is affected positively or negatively, by doing a project or by delaying / not doing a project is a stakeholder." 

I like this definition, because it prompts us to think in all possible angles, managing stakeholders. Before encountering this definition, my list of stakeholders had only two major entries like the management and the team. This definition allows me to think louder. Now the possible list of stakeholders while doing a project looks like;

  • Sponsors
  • Project managers (supplier side, customer side, consultant side)
  • Engineering managers 
  • Team members 
  • Senior management 
  • Environment 
  • Government 
  • Competition 
  • Suppliers 
  • Buyers 
  • Users 
  • Political parties 
  • Myself 
This is a quick list, which is not complete and will change from project to project. The definition given by PMI, helped me to broaden my perspective about stakeholders. To be effective manager, preparation of the stakeholder register and maintaining them throughout the project (stake holders may change during the course of the project) is the first step towards professional project management. 

After identifying the stakeholders, the next step is to classify the stakeholders based on their power to influence the project, and their interest in the project. 

If we have to understand the power equations within a business entity, we should understand their organizational structures. 

Functional organizations

This is the most prevalent traditional organizational structure. In the functional organization. the project managers have least authority levels, and the functional manager is very powerful.  

Matrix organizations

One of the key attributes of matrix organizations is dual reporting. For the project related tasks one may report to the project manager, where as for the department related work the reporting can be to the functional manager. The power of the project manager is slightly better than the functional organization.  Matrix organizations can be further classified into;

  • Strong matrix (Project manager has more power than the functional manager)
  • Balanced matrix (Project manager and the functional manager share the same level of power)
  • Weak matrix (Project manager has lesser power than the functional manager)
Projectized organizations 

In projectized organizations, the direct revenue earning activity are managed as projects (Construction companies, I.T companies). In projectized organizations, the project manager has the maximum authority and is more powerful than the functional manager. 

Without understanding the type of the organizational structures of the stakeholders in the stakeholder register it is impossible to understand the decision makers and the decision influencers, which has a major impact on developing strategies to deal with stakeholders. This has a direct impact on communication plan as well. 

Here is the video explaining stakeholder management 

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