Many people are confused when they hear the terms “stakeholder” and “who can be a project stakeholder?”
Stakeholders are individuals or organizations who are invested in a specific project and who are affected by this project in some way, and their input has a direct impact on the project’s outcome.
There are four types of stakeholders, which serve as a starting point for brainstorming all of the parties involved.
This list of stakeholders covers users, governance, influencers, and providers which all together
What is the definition of a project stakeholder?
According to the Project Management Institute, project stakeholders are defined as:
“Individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion.”
In other words, the stakeholders in your project are the individuals or organizations who stand to gain (or lose) from the project’s outcome.
What are the Different Types of Stakeholders in Business and Project Management?
Stakeholders are typically categorized based on their level of interest and involvement in the project/business. They each have their own set of requirements and expectations. As a result, developing a strategy to deal with each of them will be difficult, so grouping them based on their needs, power, or influence will assist you in developing an effective strategy to manage your project’s stakeholders. The following are some examples of common types of stakeholders in business and project management:
- Internal / External
Internal stakeholders are individuals or groups within the organization, while external stakeholders are individuals or groups outside the organization. An employee, for example, is an internal stakeholder who could be directly affected by the project. An example of an external stakeholder is a vendor.
- Primary / Secondary
Those who are directly affected or affected by the outcome are considered primary stakeholders. As a result, they are the ones who are most interested. Secondary stakeholders, on the other hand, contribute to the project’s success on a more general level.
- Direct / Indirect
Direct stakeholders, such as workers, are directly involved in the daily activities of a project. Indirect stakeholders are those who are more concerned with the project’s outcome rather than the process of completion. They, like customers, are frequently concerned with pricing and availability.
Common types of stakeholders in business and project management:
Customers are individuals or companies who pay for a service or product. As a result, they are willing to pay a fair price for a high-quality product or service. Customers are the core of the business, so project managers and business owners must pay proper attention to their expectation.
Employees conduct business processes in order to create a product or provide a service to customers. Within the organization, they perform technical, managerial, and supervisory tasks. Benefits such as a higher salary, social rights, career advancement, and job satisfaction are among the things they expect.
Communities, particularly in large businesses and projects, can be important stakeholders. They can have an impact on projects or be impacted by a variety of factors.
Owners, as the title indicates, are the owners of a organization. They provide funds to the project/organization in order for them to carry out business processes. They are concerned with the project’s returns and outcomes. Owners, as opposed to investors, are internal stakeholders.
Stakeholders, shareholders, and owners are all examples of investors. They are concerned with the project’s or organization’s financial returns. They have the authority to participate on major financial and managerial decisions. An investor is typically an external, primary, and direct stakeholder who can contribute ideas to help improve and promote your business.
Creditors are banks, suppliers, and bondholders who lend money to your projects/organizations in order to assist you in producing your product. You repay them by selling your products or services.
Suppliers and vendors are those who provide services and/or procure resources for the project. The company’s operations have a direct impact on them. Suppliers are one of the most important types of stakeholders with whom you can collaborate during the project management process.
Taxes are collected from the company by government agencies. They are external, secondary, and indirect stakeholders in this regard.
How to do a stakeholder analysis?
As soon as your project charter is complete and the scope of your project is defined, you can begin mapping out your stakeholders. Here’s how to get started with a basic stakeholder analysis process.
1. Identify your stakeholders
The first step is to determine who your actual stakeholders are. To do so, check your project charter as well as any other project plans and documentation to compile a complete list of your project stakeholders, both internal and external.
Keep in mind that some stakeholders will not be involved until later in the project’s lifecycle — but if you can predict who they will be ahead of time, you can begin to get their buy-in, build the relationship, and help them feel involved from the start.
2. Prioritize your stakeholders
You can begin to prioritize your stakeholders once you’ve identified all of them.
Prioritizing your stakeholders is critical because it helps you determine where to direct your resources. In other words, it assists you — as the project manager — in identifying who the key decision makers are at any given time, allowing you to ensure that you are speaking to the right people at the right time.
There are several methods for prioritizing stakeholders, but one simple method is to plot them out using a power/interest (or power/influence, or impact/influence) grid.
The power/interest grid helps you to identify your key stakeholders by answering two key questions that help you to group them into one of four categories:
–What level of power do they have?: How important is it that they are satisfied with the project’s progress and outcomes? What role do they play in the project’s success? How influential are they in relation to the project, other stakeholders, the team, and so on? (Keep in mind that a stakeholder’s influence can be positive or negative!)
–What level of interest do they have?: Is this project extremely important to them, or do they only have a tangential relationship with it? Is it something for which they are directly responsible? Are they reliant on it for other tasks or outcomes? Are they against the project or are they concerned about it in some way?
As we can see from the (highly technologically advanced) matrix above, stakeholders in the top-right quadrant (powerful + interested) are the ones you should pay special attention to because they have the most impact over your project — for better or worse.
3. Understand your stakeholders
Now that you know who the key players are and which ones to prioritise, you need to learn everything there is to know about their project expectations.
This may entail meeting with key stakeholders for a brief face-to-face interview or conversation in which you discuss things such as:
- What their definition of project success looks like
- Any concerns or reservations they have about the project or its outcomes
- What their expectations for the project are
- What impact a positive or negative project outcome would have on them
- Whether there are any anticipated conflicts of interest with other stakeholders that you need to be aware of
These discussions will not only help you understand each stakeholder’s involvement in and perspective on the project, but they will also help you build a larger picture of your stakeholder network and how each stakeholder interacts.
Individuals or groups of people who are affected by or interested in your project are referred to as stakeholders. It is important to identify stakeholders early in the project and develop a strategy for managing them and their requirements. This will assist you in completing the project with minimal disruption because involving them in your project will provide the support you needs.