A stakeholder is anyone who has something to gain or lose as a result of this project. It includes all the people who have something to gain or lose by either the doing of the project or the results delivered by the project. The broadest interpretation of the stakeholder is used. This means that people we might not think of as being stakeholders in the project probably are stakeholders. All of the people on the project team are stakeholders. Suppliers to the project, outside contractors, our client, our management, and literally anyone else who has something to gain or lose is a stakeholder.
It is important for the project team to recognize all of the stakeholders. Unless we identify all the stakeholders, it will not be possible to fill their requirements, and the scope of the project will be understated. Generally the stakeholders who are not recognized will make their presence known toward the end of the project when they see that their needs have not been incorporated. These then become new requirements that have been neither funded nor scheduled.
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If we use the broadest definition of the term stakeholder, we will include everyone who gains or loses as a result of the project. Some of the stakeholders will be minor and will have only a small amount of involvement in the project. All of the legitimate stakeholders must be recognized and their requirements, if they have been funded and approved, incorporated into the project.
Although some of the stakeholders will play a minor role in the project, others will have a much more significant part in the project’s management. These can be considered the key stakeholders. They include the project manager, the user or customer, the management of our own organization, and the sponsor.
The customer may sometimes be called the user. Customers or users are given many different names. The equivalent project manager on the customer’s side is the person the project manager must satisfy when the deliverables are delivered. The people in the customer’s organization who will actually use the deliverables of the project must also be considered. While the customers may not always be right, the project team must consider their needs to complete the project successfully.
The management of our own organization, as well as the other departments of the company, must also be considered. The management of our own organization may have strategic goals that this project is going to assist in accomplishing. For example, the project may be to design a new entry into the bicycle market. The project team needs to understand the company’s strategic plan so that the bicycle can be designed to reach the needs of the buying customer and be consistent with the company’s product line as seen in the future. The quality of the project needs to be considered as well. It may be the company’s strategy to offer very cheap products at very low prices, or it may be its strategy to offer long-lasting high-priced bicycles.
The sponsor is the person or organization that pays the bills. It is the source of funding for the project. Without a sponsor, the project will not be done.
An important thing to consider is that the stakeholders of a project can be negative as well as positive. The project of moving a zoo outside of the city center can be considered as positive by all project stakeholders including the majority of population of the city except for those who work there and will now have to drive an hour extra every day to get to work. Negative stakeholders, especially in the case of a project having some social impacts, can become a very important force that needs to be considered if we want a project to succeed or even be initiated.
That also brings us to the fact that some of our stakeholders can be completely outside the scope of the project but still influence it. The trend in project management is to pay more attention and recognize more of the factors outside of the project and even outside of the company that may influence project success. This is surely important for government organizations, but it is becoming more important to private sector companies, especially those working under government contracts.
There will be many, many stakeholders in any project. It may be difficult to manage all of the needs and expectations of the stakeholders, and all of the needs and expectations of the stakeholders may not be compatible with those of the other stakeholders. Earlier we discussed a small project such as going to the newspaper stand to buy a newspaper and returning home. Let’s imagine that before we left home to get the newspaper, we asked our spouse and our children if there was anything they needed from the store. Now instead of a quick trip to the newspaper stand to get the newspaper we find ourselves picking up the dry cleaning; buying a loose-leaf notebook, a liter of milk, a pound of butter, and a fashion magazine; putting gasoline in the car—oh yes, and buying the newspaper. In a construction project, the sponsor may want cost to be kept at a minimum, the user may want the most modern and beautiful building, and the engineers may want the most technologically perfect building possible.