Who is a Stakeholder?

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Categories: Communication

Everyone is talking about stakeholders these days. Surprisingly, this has not always been the case. The modern concept of stakeholders seems to have emerged from the work of the Tavistock Institute in London, England in the late 1960s and early 1970s.

Forty years later, the concept of stakeholder has expanded to include all of the people and organizations that have a real or perceived '"stake" in the project or its outcomes.

A Guide to the Project Management Body of Knowledge (PMBOK® Guide) breaks down a stakeholder as a person or organization that:

•    Is actively involved in the project
•    Has interests that may be positively or negatively affected by the performance or completion of the project
•    May exert influence over the project, its deliverables or its team members

In my work on mapping and managing stakeholders, I have found it important to expand on this basic definition to understand the "stake" of the stakeholder. This helps determine the best way to engage with them.  

Here are some of the different stakes a person or organization may have (most have more than one):

Interest: To be affected by a decision related to the work or its outcomes

Rights: To be treated in a certain way or to have a particular right (including legal or moral) protected

Ownership: To have a legal title to an asset or a property

Knowledge: To possess specialist or organizational knowledge needed for the work

Impact or influence: To be impacted by the work or its outcomes, or have the ability to impact (or influence) the execution of work or its outcomes

Contribution: Relating to the support or assets including the supply of resources, the allocation of funding, or providing advocacy for the objectives of the project

Once you understand the stake the stakeholder is seeking to protect, profit from or enhance, you can structure your communications to let the person know you understand their hopes or concerns. From this starting point, you're in a much better position to manage the relationship to the benefit of both the project and the stakeholder.
Posted by Lynda Bourne on: September 22, 2009 12:08 PM | Permalink

Comments (6)

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Adekunle O. Sogbesan
This is a nice article. I hope I can contact Lynda hereafter

Anselm Begley
In short projects, six weeks, if you have the luxury of an old, familiar, highly experienced team working in their sweet spot, jointly applying a perfect agile methodology, the inmates can run the asylum. I've been there and it's been fun as a SME.

Conversely, if the project is just a tad lengthy, more the one stakeholder, a stretch for team technical competency and/or good measure add a dash of politics, without someone driving the initiative it is more likely that the project will die from apathy.

Why? Because the technologists will defer until the stakeholders work it out. Now when was the last time anyone has ever seen stakeholders work it out alone?
"Put me in coach!"

G Balaji
This word comprises or pertains to whole gamut of people/discipline/roles who are involved in a project, especially when the execution methodology adopted in EPC Contract.

Owner/Sponsor: Is financing the project and to own the asset/knowledge and he will be interested in each decision/outcome

EPC contractor: He is contractually bound to deliver a workable/sustainable product/project and also in order to retain the name/fame in the market and for future business.

Project Management Team(PMT): Team is responsible for the delivery of the project and ensure it will perform the criteria it was initiated for

Discipline specialists: This group is expected to offer their inputs.requirements and it is best left to project team to decide the impact of cost/schedule.

User/Operatior: This team must be involved from the beginning to meet their just requirements.

PMT must address all these requirements in their communication with the "Stakeholders"

Lee Wai Wing
The stake of "Right" is sometimes abused to be executed by part of the director just with just some shares on the company group. Working as the project leader of a OEM business company, one has to handle different shareholders abuse to use the 'Right" among Stakeholder to affect the decision on Subcontract Vendor Selection result in a favorite choice upon him.

Appreciate that the PMBOK Guide 4th Edition guide us project managers to be concerned with whether the stakeholder may have interests that may be either positively or negatively affected by the performance or completion of the project. This is the headache of most project managers.

Robert Clark
I especially like the point regarding the need to "understand the 'stake' of the stakeholder." Sometimes we just add people to the list without a whole lot of thought as to why. Identifying and understanding each person's "stake" may provide some useful insight.

Once you have mapped your stakeholders you can focus your efforts on the highest priority groups while providing sufficient information to keep the less powerful groups happy.

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