November 17, 2023

What Are Project Stakeholders? What They Do & Why They Matter

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Key takeaways

  • Project stakeholders are internal or external individuals or organizations with a vested interest in a project’s outcome.
  • Stakeholder mapping helps categorize and prioritize stakeholders, thus facilitating better project planning and increasing the chances of success.
  • Project management tools can significantly assist in stakeholder management through features like communication channels, planning and tracking, and document management.

What are project stakeholders?

Project stakeholders are individuals or organizations with a vested interest in a project’s outcome. According to the Project Management Institute, stakeholders are those who stand to gain or lose something based on the project’s performance. These stakeholders can be internal, such as team members and executives, or external, like clients and suppliers. 

Stakeholders can significantly influence a project in various ways. On the positive side, their contributions may include resources, expertise, and support, propelling the project toward success. Conversely, they can introduce project risks such as resistance to change or withdrawal of support, which could hinder progress. Thus, understanding stakeholder needs and expectations is vital for project success.

Identifying stakeholders early is important because each one has a unique role and specific expectations that can impact the project’s success. Doing so allows the project manager to shape the project objectives, project scope, and plans more effectively.

It also facilitates risk assessment, revealing potential challenges and conflicts that may arise during the project. Overlooking this step can lead to missed opportunities and resource wastage, jeopardizing the project’s success.

Why are stakeholders important?

Stakeholders play an important role in determining the success or failure of a project. They can contribute in various ways, such as financial backing or technical support.

Effective stakeholder engagement ensures everyone is on the same page, reducing misunderstandings and conflicts. It also allows for better risk assessment and management. Stakeholder engagement helps in clarifying goals, identifying potential pitfalls, and even finding solutions to challenges you might not have seen coming.

What is stakeholder mapping, and why is it important?

Stakeholder mapping, also known as stakeholder analysis, aims to understand each of the stakeholder’s level of influence, interest, and potential impact on the project. 

This process is crucial for several reasons:

  • Builds trust: Knowing who your stakeholders are and what they want helps build rapport and trust.
  • Shapes project plans: Stakeholder mapping allows you to tailor your project plans to align with stakeholder expectations, thereby maintaining transparency.
  • Increases success rate: A well-executed stakeholder map can significantly increase the chances of your project’s success by ensuring that you’re meeting the needs and expectations of those who matter.

Also read: The 5 Phases of Project Management

Types of stakeholders in project management

Stakeholders come in various forms, each with unique interests and influence levels. From internal and external to primary, secondary, direct, and indirect stakeholders, understanding these different types is crucial for effective project management.

Internal vs. external stakeholders

InternalExternal
Who are they?Generally present within the organization with immediate interest in its activities. Individuals or entities outside the organization and don’t have an influence on its decisions.
What is their primary interest?Focused on project performance, stability, and varying roles.Interested in external impact; influences public perception.
ExamplesOwners, directors, managers, and employees.Customers, suppliers, creditors, partners, and contractors.

Managing internal stakeholders starts with a clear delineation of roles and responsibilities. This clarity helps in setting expectations right from the project’s inception.

Active involvement in decision-making processes is another crucial aspect; it empowers internal stakeholders and fosters a sense of ownership and accountability.

When managing external stakeholders, the first step is to identify their specific interests in the project and assess how these could impact the organization. Open and consistent communication is key, whether through newsletters, public forums, or direct consultations.

Managing expectations is also important, and this is best done through transparent sharing of project milestones and setbacks.

Primary vs. secondary stakeholders

PrimarySecondary
Who are they?Often have decision-making power in a project; usually most affected by its outcomes.Have a more peripheral connection to the project, but can still have an impact, even with minor participation.
What is their primary interest?Highly concerned with the project’s progress, often having a financial stake and decision-making authority.Casually interested in the project’s progress and are generally less involved.
ExamplesProject managers, sponsors, investors, and business owners.Government agencies, local communities, competitors, and media.

Open and frequent communication is the cornerstone of effectively managing primary stakeholders. It’s crucial to keep primary stakeholders in the loop and involve them in decision-making processes.

Addressing their concerns and feedback in a timely manner is another important aspect. Quick responses to issues not only solve problems but also build trust. Lastly, being open about project statuses, financials, and other critical aspects ensures that primary stakeholders have complete visibility.

Secondary stakeholders should be considered in decision-making processes, but their interests often weigh less than those of primary stakeholders.

One effective way to manage secondary stakeholders is by engaging in community or industry events. This not only keeps them informed but also helps in building long-term relationships.

Additionally, it’s important to keep an eye on public perception. Any concerns or negative views affecting secondary stakeholders should be addressed proactively to maintain a positive project environment.

Direct vs. indirect stakeholders

DirectIndirect
Who are they?Actively involved in the project and have the ability to influence its outcome. They can affect the project’s overall direction.Not actively involved in the project but are affected by its outcome. They care more about the project’s result rather than the process.
What is their primary interest?Interested in the project’s success as it directly impacts them.Interested in how specific aspects of a project impact them.
ExamplesTeam members, employees, project managers, and team leadersCustomers, suppliers, creditors, local community, and government agencies.

Regular status updates are crucial, along with quick and effective responses to any concerns or issues they may have. This not only resolves problems but also reinforces trust.

Finally, understanding the level of influence and interest each direct stakeholder has in the project enables more effective management, ensuring that their needs and expectations are adequately addressed.

The management approach for indirect stakeholders is to keep them informed about significant milestones or changes in the project. This keeps them engaged and helps them understand how the project impacts them.

Creating mechanisms for feedback is also important, as it provides valuable insights and helps in proactive problem-solving. Understanding these stakeholders’ potential risks allows for better risk management and planning.

Determining your project’s key stakeholders

Prioritizing stakeholders is an essential step in stakeholder management. Not all stakeholders are created equal; some have more influence or a higher stake in the project than others. You can use the following questions to identify the key stakeholders:

  • Do they share your vision about the core project objectives?
  • Can they contribute significantly to your capacity through funds, information, project scope, etc.?
  • Are they very hard or impossible to replace?

Identifying key stakeholders and securing their buy-in creates a supportive environment that facilitates better decision-making and more effective execution. These stakeholders’ influence and contributions shape the project’s direction, affect its success, and drive critical decisions throughout its lifecycle.

How project management software can assist in stakeholder management

Project management tools offer numerous capabilities that support stakeholder management:

  • Communication: Some project management platforms feature integrated chat messaging, facilitating better collaboration between both internal and external stakeholders.
  • Planning and tracking: Features like Gantt charts help effectively plan projects and track timelines. Project managers or any authorized member can then share these reports with stakeholders to keep them informed.
  • Dashboard insights: Customizable dashboards can give stakeholders real-time insights into project progress.
  • Document management: Some tools can help you create and manage stakeholder registers, project charters, and other essential documents.

A well-chosen platform can streamline tasks, help you keep track of timelines, and provide features that make it easier to communicate and collaborate with stakeholders.

Wrike’s RACI matrix centralizes stakeholder management

Wrike’s approach to stakeholder management is quite comprehensive, offering a strategy document to align project deliverables and expectations. Wrike also provides a handy communication plan template to facilitate regular stakeholder updates.

Wrike’s powerful work management software serves as a single location for your stakeholder management plan, making it easily accessible to those who need it. It can even offer a pre-built RACI template to kickstart your stakeholder management strategy.

Wrike's RACI Team View emphasizing stakeholder roles by designating individual tasks.
Caption: An overview of Wrike’s RACI Team View, emphasizing stakeholder roles by designating who is in charge, accountable, consulted, and kept in the loop for individual tasks. Source: Wrike

ClickUp’s integration elevates stakeholder management with comprehensive features

ClickUp offers a comprehensive suite of features designed explicitly for stakeholder management. You can create and share stakeholder lists with ClickUp Docs, visualize stakeholder relationships with Mind Maps, and present project plans through Gantt Charts.

The platform also supports integrated chats and Zoom meetings to keep both internal and external stakeholders updated. Additional features like Email ClickApp, workload view, and customizable dashboards provide various ways to maintain transparent communication and offer insights into project progress.

Screenshot of ClickUp displaying Zoom integration, a key feature for successful stakeholder management and collaboration.
Integrate Zoom with ClickUp and use it for collaboration and effectively managing stakeholders. Source: ClickUp

ProjectManager’s dashboard streamlines stakeholder management through real-time insights

ProjectManager provides a real-time dashboard that monitors six key project metrics: health, tasks, progress, time, cost, and workload. This feature offers stakeholders a high-level view of the project’s progress.

The platform also suggests using detailed reports for stakeholder presentations and Gantt charts for project planning. These features aim to create transparency and keep stakeholders updated with real-time data.

The platform even offers free templates for stakeholder analysis and communication plans, making it easier for project managers to manage stakeholder expectations effectively.

Screenshot of a project status report interface, displaying metrics like Portfolio Status, Project Plan, and Tasks.
An in-depth look at a project status report interface, demonstrating how stakeholders can get a comprehensive view of various project metrics. Source: ProjectManager

Irene Casucian Avatar

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