Project Stakeholder Management [1 ed.] 1409404374, 9781409404378

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Project Stakeholder Management

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Project Stakeholder Management

Pernille Eskerod and Anna Lund Jepsen

First published 2013 by Gower Publishing Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2013 Pernille Eskerod and Anna Lund Jepsen Pernille Eskerod and Anna Lund Jepsen have asserted their moral right under the Copyright, Designs and Patents Act, 1988, to be identified as the authors of this work.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data Eskerod, Pernille. Project stakeholder management. -- (Fundamentals of project management) 1. Project management. 2. Stockholders--Attitudes. 3. Corporations--Investor relations. I. Title II. Series III. Jepsen, Anna Lund, 1963658.4'04-dc23 ISBN 9781409404378 (pbk) Library of Congress Cataloging-in-Publication Data Eskerod, Pernille. Project stakeholder management / by Pernille Eskerod and Anna Lund Jepsen. p. cm. -- (Fundamentals of project management) Includes bibliographical references and index. ISBN 978-1-4094-0437-8 (hardcopy) 1. Project management. 2. Customer services--Management. I. Jepsen, Anna Lund, 1963II. Title. HD69.P75E845 2012 658.4'04--dc23 2012025802

Contents

vii List of Figures Acknowledgementsix 1 Introduction

1

2

Concepts and Issues Behind Project Stakeholder Management

5

3

What Motivates Project Stakeholders to Contribute?

17

4

Methods for Stakeholder Analysis

27

5

Planning Project Stakeholder Management

47

6

Ethical Issues

71

7

Easy to Understand, Difficult to Master

77

Mini cases Case 1

The New Design Concept

83

Case 2

The Textbook

85

Case 3

The Copenhagen Elephant Parade

87

Case 4

The Formal Partnership Process

91

References95 Index99

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list of figures

8 Figure 2.1 Key concepts in project stakeholder management Figure 2.2 Life cycles in projects 10 Figure 2.3 Stakeholder management in the management phases of a project 10 Figure 2.4 Core project characteristics relevant for stakeholder management14 Figure 3.1 Stakeholders’ assessments 20 Figure 4.1 A framework for project stakeholder analysis 28 Figure 4.2 Example of elements in a stakeholder register 31 Figure 4.3 Project Stakeholder Potential Matrix 33 Figure 4.4 Stakeholder Management Web example 34 Figure 4.5 Example of help and harm potentials in a stakeholder register35 Figure 4.6 Stakeholder Commitment Matrix with example 36 Figure 4.7 Attitude–Information Grid 36 Figure 4.8 Stakeholder Power–Interest Grid with examples of stakeholders42 Figure 4.9 Project Stakeholder Potential Graph 43 Figure 4.10 Project Stakeholder Potential and Attitude Cube 44 Figure 4.11 Management attention needed for different types of stakeholders45 Figure 5.1 Tactics and tools for proactive stakeholder management 51 Figure 5.2 Examples of different types of communication 58 Figure 5.3 Response tactics in stakeholder management 65 Figure 5.4 Issues to be considered in the stakeholder management plan 70 Figure 5.5 Stakeholder Management Table with examples 70 Figure 6.1 Ethical issues in project stakeholder management 75 Figure C4.1 Partnership Evaluation Form 93

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acknowledgements

We would like to thank a number of people for their help and support in our creation of this book! First of all we thank Editor Darren Dalcher, University of Hertfordshire, who persuaded us to write the book and was patient during the entire process in which the manuscript struggled for our attention among all our other duties and activities. Our writing activities exceeded the scheduled deadline considerably – and needed many more hours of discussions and writing than we estimated when we made our project plan. However, we think that Darren’s patience with us has led to increased value creation and therefore was very beneficial to the project. We thank Publisher Jonathan Norman and his colleagues at Gower Publishing for detailed feedback and valuable guidance. Based on Jonathan’s comments on our first version of the initial chapters, we totally rewrote the book in order to make it better suited for the intended audience. That was definitely the right thing to do! We also thank Professor Emeritus Erling S. Andersen, BI Norwegian Business School, and Helle Andreassen, Head of LAKK – Clinical and Communicative Skills Laboratory, Hospital South West Jutland, who both have read an early version of the manuscript and given us valuable comments. Thanks to the people and organizations that have provided us with inspiration and input for the case studies. The contact with the company Air-Tech presented in Case 4 was established through the research project Energy at Sea, which was financially supported by Region of Southern Denmark, the European Regional Development Fund, and University of Southern Denmark. Finally, we thank all the students who have been guinea pigs for some of the ideas and tools presented in the book – and our patient husbands, Martin and Torben, who have also struggled for our attention while we were working on the book!

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Chapter 1

Introduction

Today, many organizations, big or small, strive to create value through projects. There is considerable literature and many courses aimed at equipping project managers with theories and methods designed to increase the likelihood of project success. Project managers are offered many tools for dealing with the classical issues in the so-called ‘project triangle’ – accomplishing the project on time, within budget, and to specification and many project managers are well-educated and skilled in using these tools. They also increasingly face and try to meet additional success criteria to executing the project as planned – like ensuring that the project contributes to the strategic aims of the organization that established it. Sadly, despite all this, we repeatedly read about projects that apparently ‘went wrong’; some failed to generate the stipulated benefits, others were never finished and petered out along the way, while still others were afterwards not seen as successful even though they were carried out as planned. A recurring theme in these failures is project managers who have not taken sufficiently into account the interests and motivations of the persons and entities that can affect or be affected by the project, the so-called project stakeholders. The consequences of this lack of attention are varied and significant: a software development project may not result in the stipulated benefits because the intended users of the product developed cannot or will not use it in the intended way; top management suddenly cuts the budget for a project because they have lost interest in it; the project course may be hindered by persons or entities that are against the project or its outcomes because of concerns about potential negative side effects. Such opponents could be competing project teams within the organization, non-government organizations (NGOs), political groups or unanticipated government regulators. Finally, the stipulated project benefits may have been ‘oversold’, and the project declared a fiasco in spite of delivering the project deliverables agreed upon. The solution to this type of problems lies in finding better ways to deal with individuals or entities related to the project; to improve project stakeholder management. And that is the aim of this book. Many books and articles on stakeholder management treat stakeholders as ‘black-boxes’ at a rather aggregate level, while at the same time it is acknowledged that a disaggregation of the

2

Project Stakeholder Management

stakeholders often is necessary in order to really understand and effectively deal with the stakeholders (Ackermann and Eden 2011). For example, an institution such as a government may be a stakeholder in a specific project, but the government is represented by one or more departments and those departments by one or more persons. In other words, stakeholders are always represented by individuals and they act and react according to their beliefs, interests and motivations. Therefore, to manage stakeholders effectively, you need to understand what drives the behaviour of your stakeholders and how you can influence this behaviour. A major part of this book is grounded in behavioural theories to provide you with concepts and tools for this understanding. We hope that these concepts and tools will help you facilitate discussions on project stakeholders’ motivations with your immediate colleagues and with the stakeholders themselves. Behavioural insights are not sufficient for good project stakeholder management. To take advantage of these insights, we believe that an analytical and structured approach for interacting with project stakeholders is of great value. By an analytical and structured approach we mean that you apply methods and tools for analysis; that you document and store your knowledge so that it is retrievable at a later stage; that you plan many of your stakeholder interactions ahead; and that you make your plans explicit, at least to yourself. Structured knowledge about the stakeholders will make you better equipped to deal with them in ways that are beneficial for both the project and the stakeholders; search for win–win situations and co-creation of value with your stakeholders. For example you can better respond to changes during the project if you know your stakeholders’ priorities and concerns, and you can also better draw from the stakeholders’ knowledge and experience if you know your stakeholder well. Further, the structured knowledge about the stakeholders will make you better equipped to deal with the challenges that they pose, either by adapting to their requirements and wishes or by planning ahead, trying to influence the stakeholders to change their expectations, requirements, wishes or concerns. In the case of unexpected situations that call for intuition and flexibility, you can better act in a proper and effective way if you have ‘done your homework’ and considered which strategies to apply when interacting with each stakeholder. A well-conceived plan can prevent you from being carried away by the ‘heat of the moment’ or the stakeholder who shouts the loudest. It can help you to act wisely because it will enable you to empathize with your stakeholders and see the project from their points of view. To make this plan, you need to agree on the objectives of your stakeholder strategy and ways to achieve them. We offer tactics and tools for doing just that. These are founded on the theory of marketing communications as well as strategic management. To benefit from applying an analytical and structured approach, you need to involve other members of the project organization in your stakeholder management. You cannot manage project stakeholders properly if you lock yourself up in your office. Effective project stakeholder management requires continual interactions

Introduction

3

between the members of the project organization, for example between you and the project owner and you and the project team members. Such interactions allow you to explore and exploit insights and ideas held by each of the involved – and to develop common understandings with them about the stakeholders as well as agreements on how to make use of these understandings. This book helps you facilitate the process by giving you knowledge of ways to gather and structure information on stakeholders and to plan stakeholder communication and other forms of stakeholder interaction. You may feel uncomfortable about the thought of carefully planned management of project stakeholders if you feel that this is manipulative or exploitative. Indeed, this can raise ethical issues, particularly when you face conflicting interests. Therefore we have included a chapter on this topic. The term ‘management’ may suggest that, as the project manager, you set the scene and play a leading part; governing the stakeholders through some formal leadership authority. At most this will only be the case for certain stakeholders, for example the project team members, and rarely true of the large majority. In addition, a project manager will often only be able to offer certain types of incentives, like information sharing; a degree of autonomy; interesting challenges; and influence on the project process; and not financial incentives or future career oriented incentives. All of this implies that you need to think broadly about ways to manage stakeholders – and understand project stakeholder management as all purposeful stakeholder-related activities to support the success of your project. As previously mentioned, the project manager typically performs stakeholder management in conjunction with others; for example the project team members. For ease of reading, we use the term ‘you’ or ‘project manager’ to cover all persons who have a responsibility for accomplishing the project. When we refer to project stakeholders, we mean individuals or entities represented by individuals who can affect or who can be affected by the project process or the project outcomes, building on Freeman (1984) and Andersen (2008). The motto we have adopted for project stakeholder management is ‘Easy to Understand, Difficult to Master’. In other words, you need to practice… a lot. We wish you the best of luck and hope that you will find the theories and tools presented in this book useful.

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Chapter 2

concepts and issues behind project stakeholder management

Before we go into the detail of stakeholder motivations, how to do stakeholder analysis and possible techniques for stakeholder management, we need a toolbox of concepts and to understand the context in which the stakeholder management takes place – the project.

Defining Important Concepts This book is about stakeholder management in projects. Projects are established to generate benefits for the permanent organization behind the project (the base organization) (Andersen 2008). For example, a company may initiate a construction project to establish more production capacity to increase output and thereby generate more profit. In this case, the company is the base organization and the increased profit is the desired benefit. Benefits are generated through project deliverables produced by the project team during the project process. In the above example, the production facility is a deliverable. Other examples of deliverables may be new products, accomplishment of events, replacement of machinery, or implementation of a new organizational structure. Unfortunately, most projects do not result solely in benefits. They also result in side effects which can be negative, positive or neutral. Negative side effects are also sometimes referred to as disbenefits. Benefits and side effects incurred by a project are project outcomes. In the production facility example, noise from the construction process which bothers the neighbours may be a negative side effect. This is an example of a side effect that will disappear when the project is completed. Other side effects such as negative environmental impacts may last for a long time. While the project deliverables are delivered during or at the end of the project process, project benefits and side effects may not materialize until sometime after the project has been closed down. This is likely to be the case for a project for which the main deliverable is a new hospital or for which the main deliverable is a new product line within a company. It is only once the impact of the hospital is felt in the local community or that the company can realize sales from its new product line that benefits and side effects are apparent.

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Project Stakeholder Management

As mentioned above, the project affects its stakeholders. However, the project stakeholders may also affect the project. Examples of project stakeholders are project investors, various decision makers, project teams, authorities, suppliers, customers and end users; each description, for example ‘project investors’, typically covers several persons or entities. In managing project stakeholders you must decide on the level of stakeholder disaggregation (Ackermann and Eden 2011). This concerns whether you will treat all the stakeholders covered by the same label as a single entity or whether you will single out one or more subgroups or persons. You may for example choose to differentiate between a lead investor and other investors. You may also differentiate on the basis of personal characteristics. Specific persons or groups might be especially supportive and others especially non-supportive towards the project. Further, you need to figure out if you should deal with all members of a stakeholder group collectively or with a single person representing the group; for example in the case of a group of employees. Typically, stakeholders are identified at an aggregated level in the beginning of the project, for example as ‘suppliers’ and ‘end users’, while more specific stakeholders or subgroups may emerge at later stages once you have developed more knowledge about both the project and the stakeholders. In order to clarify responsibilities and accelerate project progress, project management literature strongly recommends that specific formal roles are assigned to persons participating in the project (Gareis 2005, Eskerod and Riis 2009). A ‘role’ is a set of expectations placed on a person or a team holding a specific position. Project roles are temporary. The most basic project organization consists of the following project roles: project owner, project manager and project team (consisting of project team members). The project owner represents the base organization and has the overall responsibility for the project. The project manager is the day-to-day manager of the project while the project team members produce the deliverables. To be able to produce the project deliverables, the project requires sufficient contributions from stakeholders (Pfeffer and Salancik 1978). These may be financial and non-financial. They can take many forms, for example: approvals and guidelines from decision makers and authorities; expertise and working hours from the project team members; deliveries from suppliers; and compliance with the intended use of the project deliverables from the end users. Contribution implies a cost to stakeholders; this may be direct or indirect in the form of making an effort or spending time on the project. Individuals and groups can influence the project by providing or withholding contributions needed to accomplish the project. In other words, they have the potential to help or harm the project (building on Freeman 1984, Freeman, Harrison and Wicks 2007, Savage et al. 1991). Stakeholder management theory assumes that project stakeholders will only contribute as needed if they are motivated to do so. You therefore need to consider who is sufficiently motivated and who needs encouragement to contribute

concepts and issues behind project stakeholder management

7

to the project. Motivation depends on expected costs and outcomes. Negotiations aimed at aligning expectations around project purpose(s), deliverables, scope and contributions are essential elements of stakeholder management as these activities enable influential stakeholders to air their views and – hopefully – align their expectations. Project stakeholders will have their own interests and perspectives related to the project. That means that they will not necessarily contribute, on their own account, as you may wish. You must be alert to important stakeholders and aware of how they may act rather than simply considering what you need from them. The aim of project stakeholder management is to increase the likelihood of project success. Consequently, project stakeholder management consists of all the purposeful activities carried out in connection to the project stakeholders in order to enhance project success. Project stakeholder management should enable and encourage the project stakeholders to contribute when and how you need them. Project managers do not have unlimited resources for interacting with stakeholders. You must decide carefully how to spend the time and resources which you have available for this task. This involves making strategic decisions on how to interact with project stakeholders in a way so that the scarce resources are used in the most efficient way. One way is to prioritize the stakeholders so that more resources are allocated to those stakeholders that have the greatest potential impact on the project (negative or positive) on a certain issue and may be reluctant to contribute quite as much as is needed, and less time and resources are set aside for working with those stakeholders who have only a limited stake in the project or who are committed to contributing whatever is required. A project cannot be established and accomplished – and the project benefits realized – without carefully considering and dealing with the project stakeholders. You need to find out (1) who can affect or will be affected by the project – identify the stakeholders; (2) how they need to contribute to secure project success, and whether and why they can be expected to contribute as needed – assess needed contributions and motivations; and (3) who you need to allocate more management attention to – prioritize the stakeholders. To do so, you should perform one or more stakeholder analyses during the course of the project. Ideally, the first stakeholder analysis is done even before the project is established to find out whether there are powerful stakeholders who will want project success or be able to hinder it (Andersen 2008). Once the project is established, you should always make one or more thorough stakeholder analyses as more detailed information becomes available, allowing more targeted stakeholder management than what is possible at the outset. Project stakeholder management thus consists of two types of activities: conducting project stakeholder analyses to provide the information needed for stakeholder management

8

Project Stakeholder Management

and, on the basis of the results of these analyses, interacting purposefully with the project stakeholders. Examples of information needed for stakeholder management are the stakeholders’ requirements, wishes and concerns related to the project. Figure 2.1 lists definitions of the key concepts presented in this chapter. • • • • • • • • • •

Projects are temporary organizations created to generate benefits for an organization (the base organization). Project deliverables are what the project team must produce to generate aimed for benefits. Project outcomes can be both the stipulated benefits and positive, negative and neutral side effects for the base organization as well as for others. Project stakeholders are individuals, groups, or entities that are affected or who can affect the project. Project stakeholders may be able to help or harm the project. Stakeholder contributions to the project can be financial and nonfinancial. Contributions can be in the form of actions for the project or refraining from actions against the project. To contribute, project stakeholders take on costs. Project stakeholder management is all purposeful activities towards the stakeholders to enhance project success. Project stakeholder analysis consists of identification, assessment, and prioritization of stakeholders.

Figure 2.1

Key concepts in project stakeholder management

Essential Project Characteristics When you perform stakeholder management in projects, you need to take a number of essential characteristics of projects into consideration.

The project organization serves another organization Erling S. Andersen in his book Rethinking Project Management – An Organisational Perspective (2008) defines a project as follows: ‘A project is a temporary organization created by its base organization to carry out an assignment on its behalf’ (Andersen 2008:10). A project is thus an undertaking which is officially sanctioned by a permanent organization, and the members of the project organization act on behalf of this organization. The base organization delegates authority and responsibility to the project organization in relation to the project task. The members of the project organization are expected to plan and accomplish the project in ways that create benefits for the base organization and its members.

concepts and issues behind project stakeholder management

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Some members of the base organization may affect as well as be affected by the project process and the project outcomes and are thus stakeholders. Some of these stakeholders are central to the project. Examples of such stakeholders are (top) managers who decide whether to allocate resources to the project as well as approve the scope of the project; employees who are appointed to undertake the project as project team members; departments delivering expertise and parts to the project; and employees who need training in order to sell a new product or to comply with new procedures. As the project is established to serve the base organization and the base organization allocates resources to the project, it is very important to consider important stakeholders in the base organization. Many elements relevant to project management such as the project roles, ways of interacting with project stakeholders, norms and explicit values are determined or influenced, to greater or lesser extent, by the existing processes, culture and ways of working in the base organization including its previous project management practices. This means that you need to be aware of routines in the base organization when you perform project stakeholder management. The same holds true if your project involves other permanent organizations, for example a client organization.

A temporary and unique endeavour The project is a temporary organization. It has an explicit starting point and an ending point, a foreseeable time span, a time before the project (pre-project phase), and a time after the project (post-project phase). The project life cycle covers the time during which the project is undertaken while the project investment life cycle includes all the time in which resources are spent on the project and in which the project generates benefits. When doing project stakeholder management it is important to consider the whole project investment life cycle when you assess who will be stakeholders of the project, including people that will deal with the project deliverables after the project has been closed down as it is important that they ensure that the deliverables will actually result in the desired benefits. The management phases in the project life cycle are as follow: formation, planning, execution and close-down. Figure 2.2 illustrates the project life cycle and the project investment life cycle. Pre-project

Formation

Planning

Execution

Project life cycle Project investment life cycle

Figure 2.2

Life cycles in projects

Close-down

Post-project

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Project Stakeholder Management

Project Management Phases

Project Formation

Project Planning

Project Execution

Project Close-down

Challenge

Engage key stakeholders.

Engage stakeholders.

Follow-up on engagement and engage possible new stakeholders.

Disengage the stakeholders.

Important tasks

Knowledge sharing with key stakeholders. Negotiate aimed-for benefits, scope, and constraints.

Negotiate expectations on contributions. Create relationships. Create awareness.

Sustain relationships.

Close-down activities.

Figure 2.3

Stakeholder management in the management phases of a project

Figure 2.3 lists important challenges and related stakeholder management tasks across the project life cycle. In the project formation phase, the project is set up and the planned benefits, scope and constraints of the project are determined. In this phase, you will perform the first stakeholder analysis on which you will base the activities for the project team that are designed to establish the initial elements of your interaction with the key stakeholders. This means that focus is on building relationships; clarifying the aim of the project and putting this into words. In the project planning phase you will have identified further stakeholders needing management attention. The relationship with these new stakeholders needs to be established; you need to align their expectations and make them aware of the project. During the execution phase you will be working to sustain all these relationships. In the close-down phase the relationships will be dissolved and the stakeholders’ role in the project disengaged (although they may remain important contributors as part of securing the stipulated benefits). The explicit temporality of any project may affect how the project team members think of the project stakeholders. They may be tempted to think in very shortterm ways: ‘We only need this supplier for this project. Let’s get the best deal we possibly can.’ When you perform stakeholder management in projects you should be aware of the possible risk inherent in this type of thinking. A focus on positive and equitable relationships with project stakeholders may serve the base organization better creating long-term benefits because it is very likely that you meet at least some of them again in other projects.

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The project organization will be dissolved when the project is closed down. But the benefits that the base organization derives from the project will only be harvested after the project close-down, for example by use of the IT system developed in a software development project. This means that you will need to encourage stakeholders to contribute to deliverables at every stage of the project when, in return, all you can give them is an expectation that the deliverables will result in the stipulated benefits. This is a challenge in project stakeholder management and emphasizes the need to develop the stakeholders’ trust that the benefits will materialize at a time when the members of the project organization can no longer influence the stakeholders (as the project organization has been dissolved). You need to consider the contributions required to harvest the benefits after the project has been closed down. For example, that there will be people responsible for operating the IT system after implementation and ensuring that the IT system is actually used. In other words, think about how and when to engage those stakeholders who are perhaps only significant once the project has been closed and who are not already on your radar when focusing on the project deliverables. Every project has some elements that are unique. Some projects are very similar to previous projects while other projects may have many new elements. For example, a construction company will run a number of construction projects and many of these may be virtually identical. However a small number may require new construction techniques, involve challenging environments, firm deadlines or a different approach to stakeholders. Think about the difference between constructing a block of flats and constructing the Olympic athletes’ accommodation; both essentially similar products but very different projects! A permanent organization can typically improve its processes over time as the repetitive nature of much of the work enables them to identify inefficiencies and try out new processes. However, a project with many unique elements may have to start from scratch on a number of issues and in such cases it may be hard to transfer knowledge from previous projects. Further, the nature of projects means that some (or most) of the project stakeholders change from project to project. This makes it especially difficult to identify all of the stakeholders in a project, work out their interests and how to accommodate them to ensure the needed contributions. The base organization may be a project-oriented organization with well-defined ways of running projects or it may be an organization unfamiliar with projects or immature in terms of project management capability. Likewise, the project manager may be more or less experienced in running projects. Managing projects that involve many new issues will be easier for the experienced project organization or the experienced project manager than it will be for inexperienced organizations or project managers. The more new issues and the more inexperience, the more important it is to allocate time for analytical and well-structured processes for project stakeholder management involving more people.

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Project Stakeholder Management

Project stakeholders have their own stakeholders The matrix organizational structure often used when dealing with projects and the temporality of projects means that the project team members have other ‘homes’ and other superiors for whom they also work. They have to prioritize a range of tasks of which the project represents only one. There is no guarantee that the project will ‘win’ in this resource battle. The project team is a group of people put together for a defined period of time, representing diverse interests. The personal bonding between the members may consequently be weaker than between colleagues in a permanent organization. Because the project team members have different ‘homes’ they may well have differing work styles and values as a result of differences in profession, background, experiences, position in the permanent organization, and organizational or national culture. The same also holds true for stakeholders external to the project. The project may not be the only customer for the supplier; suppliers have to prioritize between customers. The challenge here is that you don’t know who else is in the stakeholder landscape: who are the stakeholders of your stakeholders and how might they compete for the same resources as your project? To ensure the project runs smoothly you need to reveal and deal with possible conflicts of interest and other issues between the stakeholders.

Negotiation and renegotiation Projects are established by people. They determine the aimed-for benefits, define the scope of the project, and agree on deliverables, time and budget constraints as well as on success criteria. Agreements are reached as a result of negotiations between stakeholders who may have differing aims, beliefs and preferences. If these differences are not clarified it may lead to misunderstandings and a breakdown in trust, particularly if stakeholders feel that their expectations are not met or, worse still, are ignored. You must clarify stakeholder differences early on in the project process and consider them carefully when planning your stakeholder management. This may be challenging: you may not know the stakeholders in advance, and you will also have many other tasks that you need to complete at this stage to get the project running. Renegotiations with stakeholders may take place a number of times during the project process. You may need to renegotiate elements in order to define deliverables and scope precisely. In some projects it is impossible to determine all the project deliverables and the exact project scope at the beginning of the project. This will be the case where many aspects of the first phase of the project are unique for this project as this requires that you develop the necessary knowledge to establish and agree on deliverables and scope.

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Effective project stakeholder management cannot be conducted without considering what it is that the project is expected to accomplish and thus the criteria for success of the project. Unfortunately, project success is not a one-dimensional concept. A straightforward view is that a project is successful if the agreed project deliverables are delivered in time and within budget. But many examples of projects can be offered in which the projects were on time, to specification and within budget but did not lead to stipulated benefits for the base organization and other project stakeholders. And at the same time we sometimes see projects that produce deliverables that are radically different from the original specification and well outside the original schedule and budget that are nonetheless very successful. It may well be that the stakeholders have not been able to recognize and articulate their needs and aims at the beginning of the project and that the deliverables decided on at this time were, therefore, not the ‘right’ ones to create the benefits but should have been redefined. This redefinition may also be necessary when the needs and desires of customers change during the course of the project, not least because knowledge and understanding about the opportunities and potential sometimes grow substantially along the way. Another explanation for lack of perceived project success may be that the base organization or other stakeholders for whom the project should create benefits are unable or unwilling to make use of the deliverables; consequently no benefits are generated. Case 1 (page 83) provides an example in which a decision taken during the project process had implications for members of the base organization that had to be taken care of. There are at least two types of success: project product success (Baccarini 1999) and project management success (Munns and Bjeirmi 1996). Project product success is reached if the stipulated benefits are generated, whilst project management success is achieved if the project organization is able to produce the deliverables within time, to specification and within budget. Project success is the sum of project product success and project management success (Andersen 2008, Baccarini 1999). If either is missing it may compromise project success. This means that it is important to understand the criteria for success amongst the various stakeholders, including both hard criteria (like usability of the deliverables, money, time) and soft criteria (like expectations to the project process) of which they are not automatically aware or explicit about (Morris and Hough 1987, Shenhar and Dvir 2007). It is also important to be aware that the criteria for success may change along the project course. We have now presented project characteristics that are especially important to consider when dealing with project stakeholders. These are listed in Figure 2.4.

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Project Stakeholder Management

• • • • •

Figure 2.4

The project organization is established to serve a base organization. The project is a temporary and unique endeavour. Project stakeholders also have stakeholders. Every project is a result of negotiations and renegotiations. There are multiple project success criteria.

Core project characteristics relevant for stakeholder management

Let’s synthesize these elements and highlight the implications for project stakeholder management.

Implications for Project Stakeholder Management Every project is unique and has its own set of stakeholders from which it needs contributions. The stakeholders often have other interests than just to serve the project and the stakeholders of the project may have conflicting interests. Proper project stakeholder management improves your ability to (1) anticipate opportunities and threats in a timely manner when room for manoeuvre still exists; and (2) make wise decisions on how to spend the project’s resources in effective interaction with the stakeholders. Stakeholder management is about being proactive and prepared on a continuous basis even though uncertainties and previously un-encountered issues make it difficult to know exactly how to prepare. The idea behind project stakeholder management is that the project manager (together with the other members of the project organization) can increase the likelihood of project success through a process of purposeful and thoughtful activities in connection with the project stakeholders. These activities may be planned or improvised but should always be based on careful analysis of the project stakeholders and their interests. As you have seen in this chapter, the stakeholders are not a given in projects. They must be identified and you need to get a feeling of who they are, the organization that they come from, as well as of their expectations of the project and what contributions you need from them to accomplish the project successfully (bearing in mind that not all success criteria may be immediately apparent). In addition, you need to take your limited resources into consideration and decide which stakeholders require the most management attention at various times during the project course. All this knowledge is generated from a stakeholder analysis. The process involves three main activities: identification of stakeholders, assessment of stakeholders, and prioritization of stakeholders as regards the need for management attention.

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You should use the outputs of the project stakeholder analysis to plan how to relate to each stakeholder. In a dynamic world planning may seem a thankless task because you will almost certainly be confronted with changing environments and changing stakeholder preferences leading to changes in threats and opportunities. However, thorough understanding of your stakeholders and their desires and expectations will give you insights that can be useful when changes occur. The real benefit in planning comes from the insights it gives you into the situation at hand which enable faster, easier and better considered decisions, even when changes occur that require that the plans should be revised. This means that plans are never final. They should only be seen as inputs to the project process and they will need regular review and updating. In the following chapters we give you the foundations to understand what motivates project stakeholders and how to make a stakeholder analysis and develop a stakeholder management plan.

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Chapter 3

What Motivates Project Stakeholders to Contribute?

It would be much easier to perform effective project stakeholder management if you could fully predict the stakeholders’ behaviours! Sadly, this is not the case. There is much we don’t know about the stakeholders, and human behaviour is never entirely predictable. In addition, the total constellation of stakeholders and their possible behaviours is very complex. What we can do is to some extent predict whether stakeholders will be inclined to contribute or not based on a consideration of their motivation to do so, and on this basis decide how best to interact with each stakeholder. As mentioned earlier, you need contributions from the project stakeholders to accomplish the project. The relationship between each stakeholder and the project can be seen as a series of exchange processes in which the stakeholder and the project give and take. The stakeholder and the project manager both have a free will and can therefore decide to take part in the processes or not – they have what researchers refer to as a ‘power of choice’ (Barnard 1938:13). Stakeholders represent both threats and opportunities because they can provide, withhold or withdraw their contributions (Slatter 1980). Similarly, the project manager can decide whether or not to provide special benefits for each stakeholder. Building on classical economic theory (Smith 1776), we can assume that stakeholders will contribute to a project if they find that this is in their self-interest. They will find that contributing is in their self-interest if the benefits from this will equal or exceed the costs. In other words, they will ask themselves: ‘What’s in it for me?’ In the case of a construction project, the stakeholder benefits might include return-on-investments for the investors; payment for the suppliers; salary, involvement in interesting tasks, and development opportunities for the team members; increased reputation for the project organization; and a new and better building for the customer. Such a project may also involve negative side effects (which we also can call disbenefits): for example, fewer resources available for competing projects; noise from the construction site for the neighbours; stress and burn-outs for the project team members in an over-demanding project environment;

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and environmental damages. Disbenefits generally discourage stakeholders from contributing to the project. When stakeholders pursue their self-interests they follow a ‘logic of consequentiality’ (March and Heath 1994). This means that they act according to expected consequences of contributing and whether they believe that these consequences will maximize their self-interests. A stakeholder can decide to act to secure a desired outcome, for example, facilitating a task which will lead to a benefit for him or her. A stakeholder can also decide to act to avoid a disliked consequence of inaction; if that same task goes uncompleted perhaps the stakeholder may find his or her job at risk. The decision to act is not just a decision whether to contribute or not but also to what extent to contribute. You need stakeholders to contribute what is needed in terms of money, working hours, pieces of advice or approvals to accomplish the project on time. Remember that it is what the stakeholder believes and expects that counts when he or she is deciding whether to contribute or not. The stakeholder’s beliefs and expectations may be accurate but they may also be distorted by prior experience, lack of knowledge and difficulties in judging the consequences of contributing. For example, a stakeholder may have had poor experiences with a similar project in the past and consequently be prejudiced. However, he or she may not know the actual reasons why the former project went wrong nor understand how the current project will be conducted in a different way (if this is the case). Because of this prejudice the stakeholder is unlikely to contribute even if this project is expected to be a success. The distortion of possible consequences can also work in the opposite direction. Some stakeholders may have had positive experiences with similar projects or from working with some of the people participating in the current project and therefore overlook or fail to clarify important issues. Stakeholders decide to act according to their perception of the consequences of doing something and what is in their self-interest. One person may perceive a task as easy while another person may perceive the same task as difficult. Similarly, a person may perceive a consequence as beneficial while another person may perceive the same consequence as unattractive. Perception reflects how individuals ‘see’ consequences – what they think about them; expectations are about future consequences – what will happen. Experience, skills and personal preferences influence our perceptions of the tasks that we envision. Another challenge related to stakeholder expectations is that projects are often complex, consisting of many interrelated actions and outcomes. It is therefore difficult to judge the outcome of one specific action. In the following sections we elaborate on stakeholder motivation to act by applying the Theory of Planned Behaviour (TPB) developed by Icek Ajzen

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(1985, 1991) as a framework for the elaboration. This theory explains the reasons behind intentional, rational behaviour; behaviour which the individual undertakes on the basis of a conscious decision that relies on an evaluation of the consequences and a maximization of the self-interests. You should notice that this does not cover all types of behaviour. A great deal of behaviour is habitual or impulsive and is not carried out based on an evaluation of the consequences of the behaviour (Schiffman and Kanuk 2009). Habits are based on experience and to some extent prior knowledge that can be generalized to the new situation. Impulsive behaviour will typically occur when there is time pressure or when the decision is not regarded as significant. Some individuals are more prone to impulsive behaviour than others. In projects, time pressure may encourage a stakeholder to rely on prior knowledge and intuition rather than adopting a rational and reflective decision-making process. However, projects or their contexts are always to some extent new and unique and often involve decisions with significant consequences. This means that the stakeholders often are not able to draw on ‘what we usually do’ (habits) or to just act on impulse because they see the decision as insignificant. They therefore will be forced to make conscious and intentional decisions on what to do; to contribute or not in the project at hand. Even if they do so, several authors (Kahneman 2003, March 1978, Simon 1991), based on Simon (1955), suggest that people act on the basis of ‘bounded rationality’ and not on full rationality. This means that they do not base their choice on full information on all issues and they do not attempt to maximize their self-interests. Rather, they act on sufficient information to make what they consider a satisfactory choice. It is outside the scope of this book to discuss the rationality concept any further but remember that stakeholders cannot be expected to need or want to know everything about the project – only what they consider ‘enough’ information. Returning to TPB, an intention to act follows consideration of three elements. The first element is formation of an ‘attitude towards the behaviour’. This is related to the direct consequence of performing the act. The second element in TPB is the ‘subjective norm’; a stakeholder’s consideration of what others may think if he or she undertakes the behaviour. The third and last element in TPB is ‘perceived behavioural control’ which reflects that our propensity for certain behaviour may be strengthened or weakened on the basis of the extent to which we think that we may be able to perform the behaviours or that there are serious obstacles to overcome to perform the behaviour. Figure 3.1 displays some of the major issues concerning stakeholders’ assessments of the consequences of making a contribution.

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Stakeholders base their decisions to act on an evaluation of • Expected consequences in the form of perceived outcome (benefits and side effects) costs involved in performing the act. • What others think. • Possible obstacles. Figure 3.1

Stakeholders’ assessments

Stakeholders’ Assessment of the Expected Consequences When stakeholders make a decision to contribute (or not), they will, according to the theory of self-interest (Smith 1776), compare the possible outcomes of doing so with the cost of contributing and, based on this comparison, form a positive or negative attitude towards contributing. When evaluating the consequences, the stakeholder will consider the expected benefits against the expected costs of contributing to find the net benefit. Expected positive net benefits might reflect high expected benefits but they may also reflect modest expected costs from contributing. It follows that the more benefits stakeholders expect, the more willing they will be to contribute to the project. It follows too that a stakeholder who expects disbenefits from the project will be motivated to act to avoid them. The stakeholder might then try to stop the project, form alliances against it, and so on. It is important to notice that costs are not simply monetary. Costs can also be physical, psychological or in the form of social costs. By social cost we mean that the contribution strains the stakeholder’s relationships with other people. When evaluating the consequences of contributing, the stakeholders will compare the expected outcome with their requirements and wishes to assess whether the outcome meets these and is thus a benefit. The result of the evaluation will be influenced by their concerns around the costs of contributing and the likelihood the project may not, after all, lead to the stipulated net benefits or will generate disbenefits. In other words, they will ask themselves: ‘What will happen if I contribute? Is it something that I will appreciate? How much am I expected to contribute by the project manager? And how certain am I to get the desired benefits?’ An individual’s requirements and wishes may be expressed in a form related to the project deliverables, for example technical specifications or product capability. They may also be related to the project process in the form of requirements and a desire for involvement in decision making, the application of certain professional standards, time limits or budget limits.

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Requirements, wishes and concerns differ across individuals. People expecting the same benefits of a contribution may make a different choice about their contribution because their perception of the value of the benefits differs. Two people considering to accept to take on the role as project steering committee member may reflect on the extent to which they can influence the project, the possibility of promotion if they do a good job and the time they could have spent on other projects, and they will each evaluate these three elements. Let us assume that becoming a member of the steering committee will offer the possibility of influencing the project and of receiving a promotion but will also take considerable time that could have been used for other projects. One of the two has no other immediate projects on which he or she is interested in working and will accept the offer of membership. The other person is currently involved in another project which is also time consuming and which offers even better opportunities of promotion. This person will probably decline the offer of membership. The evaluation of the possible consequences of contributing to the project does not result simply in a positive or a negative attitude towards contributing. The attitude strength or level of commitment is an important factor because it influences the project stakeholders’ willingness to contribute to the project as well as their actual behaviour. Project stakeholders who have a very positive attitude are more inclined to contribute as needed. Therefore, such stakeholders need less attention than stakeholders who have a weak positive attitude and therefore are not so inclined to act in favour of the project. In the same way, stakeholders with a strong negative attitude need more management attention than do stakeholders with a weak negative attitude as they are more inclined to act against the project. A severe challenge for the project manager as well as for the project stakeholders is that the expectations and assessments of costs and outcomes may be implicit – and even unconscious or unclear to the project stakeholders (Wenell 2001). Further, these may change during the project process. If the requirements and wishes are unclear, it is not possible to align the expectations of the project manager and the stakeholders which may lead to disappointment. And if the concerns are unclear it is not possible to address them. Requirements and wishes often are conflicting across stakeholders as well as within each stakeholder. For example, a customer may have certain aspirations about a product’s features but at the same time a budget limit will make it impossible to develop all of those features. This means that you need to align expected consequences by negotiating with the stakeholders and thereby ‘require’ them to clarify and reveal their requirements and wishes as well as preferred trade-offs when these are conflicting. This is especially important if changes occur during the project process. To understand your stakeholders you need information

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about their requirements and wishes as well as their concerns. You may change a stakeholder’s inclination to contribute by changing the benefits, the perception of the costs and benefits or by removing concerns. Case 2 (page 85) illustrates a situation in which the project manager was not sufficiently aware of a stakeholder’s preferred trade-offs in order to take a wise decision when confronted with an unexpected change. Instead of asking the stakeholder about trade-offs between his requirements and wishes the project manager made his own priorities – with devastating consequences.

Influences from the Stakeholders’ Environments The second element in the TPB (Ajzen 1985, 1991) is the consideration of the opinions of others, the subjective norm. The logic of consequentiality explained in the previous section states that individuals seek to act in ways that maximize their own self-interests. Research shows that this theory doesn’t fully explain or predict the behaviour of individuals. Newer theory on organizational behaviour proposes that individuals in addition follow a ‘logic of appropriateness’ (Cyert and March 1992, March and Heath 1994), consider fairness in the treatment that they get as well as the level of reciprocity in their relationships (Bosse, Phillips and Harrison 2009). When stakeholders follow a logic of appropriateness they take into account what they believe others will find is appropriate behaviour for them. This means that they will consider ‘what is a person like me expected to do in a situation like this?’ and this will influence their decision to contribute to the project. Through interactions with their environments the stakeholders have developed an understanding of how others see them. Each stakeholder will act in a manner which he or she believes will support this image to preserve their social identity (Rowley and Moldoveanu 2003). Identity preservation is a major concern for individuals even though it may be unconscious or unspoken. For example, a line manager may feel that he has to take on the role as project owner for a specific project because he feels that this is expected as part of his job even though he is not really committed to the project or willing to spend time on it. The logic of appropriateness, along with the inclination to build and preserve a desired social identity, means that stakeholders can be influenced by persons whose opinions they value. This could be colleagues or their boss. But it could also be the project manager, especially if the stakeholder has a personal relationship with him or her. The influence can be direct in the form of communication between the stakeholder and the person(s) in question, but it can also be indirect, based merely on a stakeholder’s expectation of what others may think that he or she should do, or in the form of company culture.

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Individuals are also restricted in their pursuit of maximizing self-interest by a perception of fairness (Bosse, Phillips and Harrison 2009). The perception of fairness concerns three dimensions: (1) distribution of benefits; (2) procedures; and (3) ways of interacting. Stakeholders are willing to accept receiving fewer benefits than the maximum if they think that they will receive reasonable benefits compared to the benefits that other stakeholders receive. Further, stakeholders are willing to accept receiving fewer benefits than maximum if they find that the project procedures are organized in a way that ensures that their opinions are welcomed and taken into account and that decisions taken by the project manager are made taking into account accurate, non-biased information. Finally, stakeholders may refrain from demanding maximum benefits if they think that they are treated in a decent way by the members of the project organization. This includes fulfilling their information and communication needs as well as showing respect, so that the interactions are characterized by courtesy and dignity (Bies and Moag 1986, Cropanzano, Bowen and Gilliland 2007). A project stakeholder is only willing to settle for benefits that are ‘good enough’ if he or she finds that you have acted in an equitable way in all three respects. It may be tempting to see the project as ‘the centre of the world’ and the relationships with the stakeholders as dyadic relationships in which you interact with each of the stakeholders and that they are only connected through you. However, the project stakeholders may also interact directly with other project stakeholders and this influences their perception of fairness. Typically, some of the project stakeholders will know each other or they will get in direct contact for various reasons. This means that they may interact with each other during the course of the project. Therefore, they are likely to share information and opinions about the project and the project management. Extra benefits given to one stakeholder may easily be apparent to other stakeholders, potentially creating a feeling of unfair treatment. A typical example of such extra benefits might be information sharing related to changes during the project. If some stakeholders get the impression that they were informed too late (compared to others), or not informed at all, they may react strongly. One useful piece of advice for project managers is: ‘Don’t surprise your boss!’ Your boss should not hear bad (or good) news about the project from anybody else than you. Make sure that he or she is well-informed in case some of the other project stakeholders mention some particular news. Informing your boss before others also implies that you should be careful about revealing significant news when a third person is present together with you and the boss – and thereby not giving your boss a chance to discuss it with you in advance. Fairness may be judged over long periods of time and consequently the perception of fairness in one project will have bearing for subsequent projects (Bosse, Phillips and Harrison 2009). Typically, an exchange between you and each stakeholder is not a once-in-a-lifetime, one-exchange-only event. Instead, each exchange is part of a process in which you interact in a number of situations before, under, and/or

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after the course of the single project and accordingly you re-evaluate the perception of fairness continually. The evaluation of benefits and costs of contributing will not be based on each individual exchange but over time in a so-called reciprocal relationship in which the experiences with one exchange influences the evaluation of future exchanges (Bosse, Phillips and Harrison 2009). This means that if one of you gets more than expected on one occasion, this person may be willing to contribute more than is expected subsequently. In this sense, a collaboration can become a continuous ‘gift exchange’ in which both parties reward each other in a positive, upward spiral (Akerlof 1982). Such an upward spiral can begin by you offering a stakeholder more than what simply covers her costs (you give her a ‘gift’). If the stakeholder acknowledges this, she may reciprocate by contributing more than her minimal effort needed to ‘pay’ for your contribution, thereby also giving a ‘gift’. Unfortunately, reciprocity works in reverse, too (Bosse, Phillips and Harrison 2009). If a stakeholder thinks that he gets fewer benefits, less considerations in the project procedures, or less interaction than he finds fair, he may contribute less than otherwise. Instead of giving a gift, less than needed may be offered. You may react to this by feeling disappointed and ‘punish’ the stakeholder by offering fewer benefits in the next interactions. A negative, downward spiral has started. Unfortunately, people typically punish the other party more severely when they experience unfair treatment than they will reward them for fair treatment (Offerman 2002). This means that it is very important not to disappoint the stakeholders. An element in this is to ensure that expectations are aligned so that the stakeholders do not have unrealistic expectations in terms of the attention and the outcomes they can expect from the project. Under-promise and over-deliver! Given the cumulative effect of our actions over time, you should be aware that maximization of the project’s short-term benefits can have harmful effects in the long run. You should also consider the formal and not least the informal structures of influence among the stakeholders and the stakeholders’ stakeholders as these can prove to be important in the decision to contribute or not to the project. As a part of this you must reflect on what stakeholders take into account in assessing what is fair in terms of the reciprocity in your relationship over time but also in terms of how others are rewarded for their contribution. This will help you anticipate how each stakeholder will act and you may also use this knowledge to create social pressure to contribute.

Stakeholder Capabilities Even if a stakeholder has a positive attitude towards contributing to the project as needed and thinks that influential others appreciate that he or she makes a contribution this is not enough to ascertain a contribution. This is because the

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stakeholders’ intention to contribute to the project – and therefore also whether they go ahead – is influenced by their behavioural control (Ajzen 1985, 1991). Perceived behavioural control refers to whether someone believes that he or she will be able to perform the behaviour; that they will have the resources to do it and will be able to overcome possible obstacles hindering the performance (Ajzen 2002). A person may refrain from taking on a desired behaviour because of perceived lack of capabilities but also because of other hindrances, for example time pressure. A stakeholder may also be uncertain whether to contribute or not if he or she thinks that it is not up to him or her to decide whether the contribution should be given. This decision may for example lie with a superior in the organization. In that case the stakeholder will not contribute if the superior, who is the stakeholder’s stakeholder, does not sanction it. This tendency will be stronger if the corporate culture is very focused on formal hierarchy and procedures (Eskerod 1997). If that is the case, the stakeholder may stick strictly to the contributions which are listed in agreed documents. In such a situation a stakeholder will not contribute as required, even though he or she may think that a specific behaviour is appropriate if the task is listed specifically in the project documents. Because perceived behavioural control influences the inclination to contribute, you need to consider how easy or difficult it may be for a stakeholder to contribute as well as the extent to which each stakeholder is in control of the decision to contribute. Thus, to assess a stakeholder’s propensity to contribute to the project as required, you need to understand both the stakeholder’s capabilities to do so and possible hindrances. You can change the propensity to contribute by increasing capability, for example through instruction, or by changing the perception of exactly what capability is needed by providing information about the exact tasks involved including when they must be accomplished.

Implications for Project Stakeholder Management In this chapter we have discussed the major motivators behind a project stakeholder’s contribution to the project. It is important to consider the attitudes of stakeholders towards the project. You need to think about the expectations that each stakeholder has in terms of possible benefits, disbenefits and costs involved in contributing to the project in the way that you would like them to. Stakeholders also consider the opinions of others in the decision to contribute or not, as well as to which extent they will be able to contribute as needed. Finally, they consider whether the distribution of benefits from the project is fair and whether all project stakeholders are generally treated in a fair way. In Case 3 (page 87) we present statements from stakeholders on why they are willing to contribute to a specific project.

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Chapter 4

Methods for Stakeholder Analysis

To create a solid foundation for your stakeholder management activities you need to establish and organize insights about the stakeholders that will help you decide what to do. The insights can be obtained by conducting a project stakeholder analysis consisting of stakeholder identification, stakeholder assessment and stakeholder prioritization. Stakeholder prioritization should depend on the stage of the project or the issue at hand (Savage et al. 1991). You need to prioritize the stakeholders for each of the important issues and several times across the project life cycle to identify when you need to put which stakeholders in focus. We recommend that you involve the members of the project organization, for example the project owner or the project team members, in the analysis process so that a common understanding of the project stakeholders can be established. The results from the stakeholder analysis lay the ground for planning wellthought activities in connection with each (group of) project stakeholder(s). But it also works the other way around; interacting with the project stakeholders, for example in workshops, will give insights into stakeholder requirements, wishes and concerns. Therefore, analysis does not precede activities; instead stakeholder analysis and stakeholder activities are intertwined. This means that you should not limit project stakeholder analysis simply to the project formation phase. Rather, stakeholder analyses should be carried out several times along the project course in order to incorporate potential changes. These might be in the environments; in the stakeholders’ requirements, wishes, concerns, level of information, and evaluations; or in the interpretations done by the people doing the project stakeholder analysis. In the next section we offer a framework for project stakeholder analysis. We then propose methods for collecting and systematically analyzing data about the project stakeholders. Finally, we point to challenges related to project stakeholder analysis.

A Framework for Project Stakeholder Analysis As mentioned, project stakeholder analysis consists of three steps which are represented in Figure 4.1.

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1. Project stakeholder identification: Who can affect or be affected by the project process or the project deliverables?

2.

3.

Project stakeholder assessment: How should each stakeholder contribute to create project success? What are the motivations of each stakeholder?

Project stakeholder prioritization: Which stakeholders are currently most in need of attention?

Figure 4.1

A framework for project stakeholder analysis

Project Stakeholder Identification The starting point of the stakeholder analysis is to identify all individuals and groups who can affect or may be affected by the project process or the project deliverables. Both current stakeholders and potential stakeholders should be identified. The constellation of stakeholders typically is not well delimited at the beginning of project. Therefore, the identification process should be repeated several times during the project. All individuals and representatives for entities who perceive themselves as stakeholders for the project at hand are stakeholders. Notice that it is not your perception of who is affected that counts but that of the stakeholder. If you think a group of individuals will not be affected by the project, and the individuals do not agree, you need to change their perception if you want to remove them as stakeholders. You cannot just dismiss their perception. The identification process should build a common understanding of who are stakeholders among the persons conducting it. The information should be stored for later use in a Project Stakeholder Register. The format of the stakeholder register can vary. It can be a simple collection of post-it notes with a stakeholder name noted in handwriting on each, a list of stakeholders with names and contact information, or a fully developed IT database with detailed and structured information about each stakeholder. The size and complexity of the project at hand, the number of people involved in project stakeholder management, the culture of the base organization and the administrative resources available will all help you decide on the appropriate medium for the stakeholder register.

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There are several ways of identifying the project stakeholders: • ask project team members to list stakeholders in their specific areas of expertise; • think through the whole life cycle of the investment of which the project is a part, for example the life cycle of a new product; • ask other members of the project organization, for example the project owner; • use general lists or checklists of stakeholders, that can be found for example in the project management standards within the company or in the project management community; • check stakeholder registers from similar projects for inspiration; • ask project stakeholders you have already identified to identify more stakeholders; • invite experts within or outside the base organization to validate the list of stakeholders and offer suggestions for any missing stakeholders. The number of stakeholders may seem infinite and you risk wasting time on identifying too many stakeholders and even becoming paralyzed by the number of people and groups that you need to consider. Our experience, however, tells us that it is more common for organizations to identify too few project stakeholders than too many. A long stakeholder list may be difficult to overview and handle. Current literature suggests that the stakeholders should be grouped. One suggestion is that the final list should consist of six to 15 groups of stakeholders (Bradley 2006). Stakeholders that are likely to share the same characteristics in relation to the project can be aggregated into a single group. As mentioned in the second chapter, the choice of level of stakeholder (dis)aggregation is a major challenge. It may be practical to work with groups but you must acknowledge that each person involved in the project is a separate stakeholder and it may, therefore, be relevant to treat stakeholders at the individual level. For example, employees belonging to the same employee group may be treated as a group. However, if one of these employees has a significant influence within the group, it may be a good idea to engage differently with this person. Stakeholder differences may not be apparent at first glance. Therefore, it is important to realise that whilst the first version of the stakeholder list may contain formal groups such as ‘department XX’ or ‘the customer’ as stakeholders, later versions should be more fine-tuned and based on the next step in the stakeholder analysis, the stakeholder assessment. Stakeholders may be entities rather than individuals. Examples of non-personal stakeholders are ‘the community’, ‘the union’ or even ‘the environment’. The media can also be an important group of non-personal stakeholders that potentially may help or harm the project. Stakeholder labels such as ‘the union’ may be sufficient for the stakeholder assessment process. When engaging with these

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stakeholders you will be talking with individuals and it is important to clarify who these people are.

Project Stakeholder Assessment The project stakeholder assessment must produce various types of insights. First, you need to clarify the contributions needed (if any) from each stakeholder. Secondly, you have to get an understanding of each stakeholder in terms of the benefits that the stakeholder will value in terms of project outcomes as well as their concerns regarding potential disbenefits and costs. Thirdly, the assessment should give insights into each stakeholder’s potentials to ‘harm’ and ‘help’ the project. Finally, you may need a more fine-grained analysis for some issues. In addition, you will need to consider how to create input needed for the assessment.

Determining each stakeholder’s contribution Project success cannot be obtained without contributions from project stakeholders. As resources are always scarce it is important to determine the minimum contributions required from each stakeholder in order to accomplish the project and generate the stipulated benefits. Ask yourself: ‘What does the stakeholder need to do or refrain from doing as a minimum?’ Examples of minimum contributions are approvals, funding for must-do activities, a certain number of working hours and refraining from negative communications. You can get help from various documents to identify the contributions needed from each stakeholder, for example from the project business case, the project charter, a description of the project’s purpose and deliverables, and a project work breakdown structure. The minimum contribution can be defined in various degrees of detail.

Determining each stakeholder’s requirements, wishes and concerns The assessment should ideally make each stakeholder’s preferences known and explicit in terms of what to contribute to the project and what to receive – when and how. To know whether the stakeholders are inclined to contribute as needed you need to uncover each stakeholder’s requirements and wishes and how they prioritize these. You should also attempt to uncover the concerns of each stakeholder and their expectations for the distribution of benefits, project processes and ways of interacting (see Chapter 3 on perceived fairness). Such information makes it easier for you to make considered trade-offs in the project planning phase (defining purposes, deliverables and scope) and during the remaining project process (if necessary) so that any disbenefits for each stakeholder are minimized. Notice that we say ‘ideally’ and ‘attempt to’. We acknowledge that it may be impossible to uncover fully the stakeholders’ requirements, wishes, concerns, perception of

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fairness and priorities as these elements may be unclear or tacit knowledge even to the stakeholders themselves – or the stakeholders may for various reasons not be willing to reveal them. In addition priorities may change over time. In spite of these reservations we believe that communication about and consideration of these things will increase the likelihood of project success. The assessment data for all stakeholders should be stored in the Project Stakeholder Register, see Figure 4.2 for an example. Stakeholder

Stakeholder’s necessary (N) and wished for (W) contributions

Stakeholder’s requirements (R) and wishes (W)

Stakeholder’s concerns

Customer X

Signed contract for customized machinery (N), Access to directly interact with the customer’s customer (W).

Two product alternatives (R). More product alternative (W). Knowledge creation for future projects (W).

That the process is prolonged because of the customer’s customer’s raised expectations.

R&D department

Allocate two employees as project team members part time for one month (N). The employees should be very experienced (W).

Schedule must fit other activities in the department (R).

The project may be delayed due to long lasting negotiations or due to problems in supply of parts for the prototype.

Figure 4.2

Example of elements in a Stakeholder Register

Assessing each stakeholder’s harm and help potentials Stakeholders have different potential to (1) contribute to the project success (in short: ‘help potential’); and (2) threaten the project success (in short: ‘harm potential’). The potential is determined by the stakeholder’s capacity and opportunity to contribute to or threaten the project (Savage et al. 1991). Stakeholders who have many resources that can be used to support project progress have a large help potential. Resources should be broadly understood. They can be in the form of moral support, manpower or material resources. Harm potential implies the ability to stop the project or hinder its progress. This can involve withholding resources or damaging the project image. The more dependent the project is on the stakeholder, the more harm potential.

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The help potential and the harm potential should not be seen as two ends of a scale. A project stakeholder controlling important contributions has both a help and a harm potential while a project stakeholder who can offer important contributions that can also be offered by other stakeholders has a considerable help potential but no harm potential. If two independent organizations could take on the role as main supplier, they both have high help potential and low harm potential. If there is only one possible supplier, however, the harm potential of this supplier will be high. You should notice that the harm and help potentials may change during the project. A project stakeholder who has low harm potential at the beginning of the project may well gain in harm potential once the project has started because the interdependency between the project and the stakeholder typically will grow so that replacing that stakeholder (if need be) will involve higher costs and more effort. The same dynamic is often seen for the help potential. As project specific knowledge grows, the help potential of a given stakeholder becomes higher than at the outset of the project. The help and the harm potentials must be assessed for specific project phases and for special issues in the project. Examples of issues could be the determination of scope, stop-go decisions and selection of project team members. Each stakeholder can be categorized as having ‘low/high help potential’ and ‘low/high harm potential’. In total there are four possible positions for each stakeholder for each issue. We have chosen to label these stakeholders as follows: Resourceful, Key Player, Show Stopper and Marginal. The Resourceful has help potential and thus controls resources that the project can take advantage of. The Show Stopper has low help potential and high harm potential and thus ability to stop or hinder the project but no resources for the project. The Key Player has both help and harm potential and is accordingly important to the project both in terms of relevant resources and ability to harm the project, hence the name: Key Player. Finally, stakeholders with low help and low harm potential are not significant for the project and have, therefore, been labelled Marginal. It is important to remember that Marginals cannot be completely disregarded. They are not able to affect the project but if they can be affected by the project they are, nonetheless, stakeholders. A stakeholder who is able and willing to form coalitions with other stakeholders may be able to increase his or her help potential, harm potential or both. Figure 4.3 shows the four types of stakeholders and their harm and help potentials. Remember that potentials may change across the project course. In the execution phase, one end user out of a number of end users willing to participate in testing the product can be categorized as Resourceful – he or she can easily be substituted by another end user and is therefore not able to harm the project – while a testing expert who cannot (easily) be replaced will be categorized as a Key Player. In another phase these stakeholders will both be categorized as Marginal.

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High Resourceful

Key Player

Marginal

Show Stopper

Help Potential

Low

Low

High Harm Potential

Figure 4.3

Project Stakeholder Potential Matrix

Source: Inspired by Savage et al. 1991:65

You may assess the help and harm potentials using the technique Scenario Developments (Freeman, Harrison and Wicks 2007). Assessment of a project stakeholder’s help potential can be done by imagining ‘a best of all worlds’ scenario in relation to the particular stakeholder’s possible contributions to the project. In the same way, the project stakeholder’s harm potential relates to ‘a worst of all worlds’ scenario as regards how the stakeholder can be expected to behave in relation to the project. The questions below can help assessing each stakeholder’s capacity, opportunity and willingness to help or respectively harm the project (Savage et al. 1991): • Does the stakeholder control key resources needed by the project? • Is the stakeholder likely to take supportive action? To take non-supportive action? Or not to take any action? • Is the stakeholder likely to form coalitions with other project stakeholders? With members of the project organization? Or not likely to form any coalitions? To answer the last question, you can use network analysis to assess the relationships of the stakeholder. You may make a simple analysis by drawing a Stakeholder Management Web for each important stakeholder (Ackermann and Eden 2011). The stakeholder in question (the focal stakeholder) is placed at the centre of the web and related persons and entities are drawn in a web around the stakeholder.

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Project Stakeholder Management

In the web the relationships are split into two types: the power base reflecting the possibility to help or harm and the base of interest reflecting requirements and wishes of the focal stakeholder and how these may be connected to requirements and wishes of other individuals or organizations. Figure 4.4 illustrates a Stakeholder Management Web for a supplier representative. Other suppliers Enhances customer productivity

Chooses supplier Decision maker in the project organization

Ability to deliver product with special features

Power to act

Supplier rep. Wish for continued relationship with customer

Achievement goal

Interests – in delivering

Boss

Colleague of supplier

Management demand for profit

Desire to make a good impression delivering to customer

Stakeholders. Can support or hinder interest or power. Aims, requirements, wishes, and concerns of stakeholders.

Figure 4.4

Stakeholder Management Web example

Source: Inspired by Ackermann and Eden 2011

The base of interest consists of the direct interests (requirements and wishes) of the focal stakeholder as well as the relevant interests of others whom he or she is related to. If interests are supported by others the interest and thereby the motivation to act will be stronger. The same picture applies to the power base of the stakeholder. Persons with a large web of power have more ability to help or harm than persons with only a limited power base. In the example presented in Figure 4.4 the supplier has an interest in delivering to the project. This is supported by his boss because delivering will result in benefits in the form of profit and esteem. Delivering is also supported by a colleague who has an interest in having a good relationship with the customer. The supplier has some power in negotiations with the customer (the project representative) because the deliverance is superior to the deliverances of other suppliers – but the existence of other alternatives weaken the power base

methods for stakeholder analysis

35

and it may be deteriorated if the other suppliers augment their offer or lower their price. The power base is, however, strengthened by a direct relationship between the boss of the supplier and the decision maker in the project. In sum, the supplier has a large help potential and a medium to small harm potential. The help and harm potentials of the stakeholders can be added to the Stakeholder Register as displayed in Figure 4.5. Stakeholder …..

Stakeholder potentials Low/high To help

To harm

Customer X

……

High – the customer’s experience and knowledge is of great value.

High – if contract is not signed, the project will not be started.

R&D department

…….

High – the department has skilled staff with relevant experience.

High – the product cannot be developed if the right staff is not allocated at the right time.

High – the supplier can deliver what we need.

Low – we can substitute this supplier with other suppliers.

Supplier Y

Figure 4.5

Example of help and harm potentials in a Stakeholder Register

Additional tools To create a more fine-grained understanding of your stakeholders you may apply additional tools in your analysis of the stakeholders. McElroy and Mills (2003) suggest that you create a Stakeholder Commitment Matrix containing the commitment (or attitude strength and direction) that each stakeholder holds towards the project as well as the commitment needed for project success at a given point in time. The possible states of commitment are Active Opposition, Passive Opposition, Neutral, Passive Support and Active Support. See an example of a Stakeholder Commitment Matrix in Figure 4.6. The Stakeholder Commitment Matrix clearly shows where to focus the management efforts. Working with the Commitment Matrix enhances your awareness of the different levels of commitment needed of the stakeholders. It also highlights that it may not be necessary that all the stakeholders can be classified as Actively Supporting the project.

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Project Stakeholder Management

Stakeholder

Active Opposition

Passive Opposition

Neutral

Suppliers

Passive Support

Active Support

Xàà

àà O

XO

Top Management Colleagues in the base organization

Xà

ààO

àààà

Note: X = current position, O = necessary/wanted position by the project

Figure 4.6

Stakeholder Commitment Matrix with example

Source: Based on McElroy and Mills 2003

You may also assess each stakeholder’s level of information concerning the project in combination with his or her attitude towards the project and place the stakeholder in an Attitude–Information Grid. Each stakeholder can be categorized into one of four categories: (I) Positive Informed; (II) Positive Uninformed; (III) Negative Uninformed; and (IV) Negative Informed. Figure 4.7 shows the grid. This assessment may help you determine which stakeholders you need to try to influence and gives a hint on how to influence them. The underlying idea in the framework is that a stakeholder who is negative, but at the same time only has little information about the project (quadrant III), needs to be treated differently than a negative stakeholder who has a detailed knowledge about the project (quadrant IV). An example of a negative, wellinformed stakeholder could be a grassroots organization which is strongly against the project. The attitude as well as the information level can be assessed in more

High

I. Positive Informed

IV. Negative Informed

Low

II. Positive Uninformed

III. Negative Uninformed

Positive

Negative

Level of Information

Attitude Figure 4.7

Attitude–Information Grid

methods for stakeholder analysis

37

detail by using a system of co-ordinates instead of a 2x2 grid if you find it valuable for your stakeholder management planning.

Generating Input for the Assessment The stakeholder analysis tools presented in the above all assume that you familiarize yourself with the stakeholders and their characteristics in terms of requirements, wishes, concerns as well as their relationships with the other project stakeholders and their capabilities to help and harm the project. But how do you do this? Essentially there are three ways of generating the necessary input for the assessment: 1. create primary data; 2. collect secondary data; 3. make assumptions. Primary data are data created for the specific purpose which in this case is making the stakeholder assessment in the project at hand. You may create primary data in interactions with the project stakeholders or by observing them. Both these ways of creating data can be undertaken in workshops, meetings, interviews, e-mails, questionnaires and other forms of communication. Secondary data has been made for other purposes and is information already available about the project or the project stakeholders. Such information may be found in official documents like for example contracts, project business case, project charter or in project role descriptions. Additional information may be found in minutes from projects meetings in which the stakeholder has participated or on company websites – for example, that of a customer. A third way to create data is to make assumptions about the stakeholder without collecting data. An example of such assumptions could concern the stakeholder’s perception of fairness in terms of procedural interactions. The assumption could rely on an attempt to imagine what the stakeholder would do and think based on previous experiences with this particular stakeholder; observations of or informal reports on current or past behaviour; or on general expectations of a stakeholder in the role(s) this particular stakeholder is undertaking. You might ask: What would a similar stakeholder do in a situation like this? How would the stakeholder talk about our project and his or her contribution to it to his or her own stakeholders? Has the project stakeholder previously contributed to similar projects the same way we require now? Do we see a correspondence between the stakeholder’s words and deeds in situations comparable to the current or future situation? How can our understanding of the specific context, as well as our understanding of the

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other stakeholders’ history with the project stakeholder, help us understand what to expect? Do we have reason to believe that anything would be different from last time? You need to consider pros and cons including costs and benefits for each method of generating input for the assessment. Creating primary data may seem to be the most resource demanding for both you and the stakeholder in question. However, research (Jepsen and Eskerod 2009) has shown that direct interactions with a stakeholder in the early phases of a project are likely to increase the stakeholder’s motivations, make the stakeholder more positively minded towards the project and also align the stakeholders’ expectations. Therefore, creating primary data can be seen both as an engagement activity and as a way for you to acquire information. A challenge related to creation of primary data on stakeholder requirements, wishes and concerns in the early phases of the project is the risk of creating expectations in terms of the project process or the project deliverables that you cannot subsequently fulfil. This is particularly risky if the interactions with the stakeholders are done on an individual basis. If you are very attentive to each stakeholder you may well end up with a number of requirements and wishes that may be incompatible, and with a number of stakeholders each of whom expects that their particular requirements and wishes will be met. To avoid this situation, you may prefer to establish a forum, such as a workshop, in which you can interact with more stakeholders at a time. Making use of secondary data from documents can enable you to obtain important information without taking the risks associated with interacting directly with the stakeholders. However you may find it difficult to locate sources revealing a detailed knowledge about the wishes and concerns of the stakeholders. Often, only requirements – and perhaps only the most important requirements – are explicitly listed. Because of the challenges in creating and collecting primary and secondary data and the time pressure, project managers often stick to the third method – making assumptions. This may be a risky choice because assumptions are notoriously inaccurate and you also miss opportunities for engaging the stakeholders through direct contact.

Methods for creating primary data Primary data can be created in many ways, for example through workshops, interviews or surveys. Semi-structured interviews can be most effective. The interview should be flexible and offer good opportunities for the interviewees to take up issues that are important to them. We have already pointed out some of the challenges related to obtaining input for the assessment through interaction with stakeholders, such as building up expectations or giving promises that are

methods for stakeholder analysis

39

afterwards difficult or impossible to fulfil. These challenges can, to some extent, be handled by using a skilled, well-prepared interviewer. Another problem in using interactive methods is that they are time consuming. To overcome this problem, you may choose to interact with a group instead of on a one-to-one basis. Group interactions offer other benefits too. Interaction among interviewees may make it easier for the interviewees to be open. In an individual session they may feel intimidated by the interviewer or the interview situation. Often interviewees wait for the interviewer to ‘take the lead’. Group interactions can take place in a focus group workshop or in a facilitated workshop. In a focus group workshop the participants are asked to discuss a subject – for example possible benefits from the project and how they would need to contribute to create project success. The role of the ‘interviewer’ is to moderate the discussion, keeping it on track and making sure that there is no group pressure and that everybody is allowed to state opinions and come up with ideas. In a facilitated workshop you ask the participants to perform a certain task while you guide them in doing so. A specific technique will often be used to undertake the task. A number of techniques can be used in workshops or other communications with the stakeholders: • • • • •

Stakeholder Reflections; Scenario Developments; prioritization of requirements and wishes; MoSCoW (Must have, Should have, Could have, Would have); sorting techniques.

The technique Stakeholder Reflections involves asking the stakeholders about relevant previous experiences. This is especially valuable when it comes to discussing and planning the project process. Stakeholders can be asked to reflect on questions such as: • Can you think of three good and three bad experiences you have had in previous projects resembling this one? • What did you especially like or dislike in the communication process during your last project? By discussing personally experienced best and worst practices, stakeholders may find it easier to identify and articulate their requirements, wishes and concerns and you may find it easier to understand what they mean. If reflections are asked for in a workshop the other participants will be able to benefit from the reflections of their peers who are participating in the workshop and build a comprehensive understanding of the other stakeholders.

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Project Stakeholder Management

While the technique Stakeholder Reflections draws on the stakeholder’s past, the technique Scenario Developments draws on and creates the stakeholder’s image of the future (Freeman, Harrison and Wicks 2007). Using questions, the idea is to invite the stakeholder to explain how the project will create value for him or her. The explanation may include a description of how the stakeholder’s stakeholders will make use of the project deliverables. This technique may be supplemented by constructing mock-ups or prototypes of the project deliverables. It could also be supplemented by drawing a map of the working processes in which the project deliverables are going to be used, for example a new IT system, and using role plays in which potential behaviours from various stakeholders or stakeholder’s stakeholders are uncovered. As in the case of Stakeholder Reflections the purpose of this technique is to build a more comprehensive understanding of the particular stakeholder’s situation in relation to the project at hand. As stakeholders may have conflicting requirements and wishes it is important to help them make prioritizations. A well-known technique for this is the MoSCoW prioritization technique (Clegg and Barker 2004). This involves asking the stakeholder to differentiate between the ‘Must have’, the ‘Should have’, the ‘Could have’ and the ‘Won’t have’. The ‘must have’ are requirements that are indispensable, meaning that the project stakeholder will not contribute to the project or will not assess the project as successful unless these requirements are fulfilled. The ‘Should have’ are requirements that need to be fulfilled if at all possible. The ‘Could have’ are wishes to be fulfilled if this does not adversely affect other aspects of the project. The ‘Won’t have’ are wishes that will not be fulfilled in this project; they are outside the project scope but may be stored for a later project or a later version of the project deliverables. Categorizing the requirements and wishes in this way enables the project team to understand what to prioritize if they need to make trade-offs during the project course. Various sorting techniques may be used for understanding and deciding on priorities. Typically, the participants in the activity must sort a range of statements that are made on one or more issues according to a specific criterion. To explore the issue of flexibility to change once the project plan has been approved, examples of statements might include: ‘the project deliverables must be delivered on time’ and ‘the product specifications cannot be changed’. The interviewee or workshop participants are then asked to sort the statements according to level of agreement. If comparisons are complex you can make a number of cards, each with two alternatives, from which the participant must choose the one on which he or she agrees the most. The prioritization can then be derived on the basis of these choices. If there are many alternatives to assess, the task can be simplified by first asking the participants to pre-sort the items into three to five groups and then subsequently sort one or all of the groups. The sorting techniques reveal the preferences of the participants but, maybe more importantly, the sorting process provides a good background for discussions on priorities. Employing a

methods for stakeholder analysis

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sorting process requires relatively few resources from you and the stakeholders, particularly if you ask them to sort issues into three simple groups – from not important to very important – and then compare the groups and discuss possible differences between their choices. It may be very time consuming to create data about all stakeholders using interactive methods. In cases where you need simple information on a large number of stakeholders whom you are able to split into smaller groups sharing similar characteristics, a survey may be a good alternative to the interactive methods. The survey is a structured method for gathering information through a questionnaire and is, therefore, suited for studies in which it is important to get information from a large number of individuals. To be able to handle the data from a large number of people the questions must be the same for everyone. Therefore, a drawback is that there is only limited potential for each respondent to add extra information to the answers that he or she gives to the questions posed. Having focused on each stakeholder separately (regardless of whether the stakeholder is an individual person or a group) in the assessment part of the analysis, you are ready to create an overview of all the project stakeholders and decide on who is more in need of attention than others. The last step in the project stakeholder analysis framework, prioritization of the stakeholders, is the topic of the next section.

Project Stakeholder Prioritization You must decide how to distribute your limited resources for giving management attention to each stakeholder. As each project stakeholder may have different requirements and wishes and these may coincide, it may be impossible for you to accommodate them all. Before making trade-offs between the stakeholders’ requirements and wishes, you should first search for win–win situations. You may do this by conducting negotiations with each stakeholder at a time or with groups of stakeholders simultaneously, for example in a workshop. Once you have done this you typically will find it necessary to make some trade-offs amongst what is left – and this includes the amount of management attention given to each stakeholder. It is important that you make these trade-offs and split your management resources in a way that best supports the project progress and the creation of benefits for the base organization. To get an overview of the stakeholders it can be helpful to represent more or all stakeholders in a single chart with axes representing various characteristics, for example the stakeholders’ power. One approach to this is to use the Stakeholder Management Web (see Figure 4.4) that you produce for each stakeholder to prepare a Stakeholder Power–Interest Grid (Ackermann and Eden 2011). The grid is presented in Figure 4.8 along with some examples of possible stakeholders in the groups.

Project Stakeholder Management

High

42

Subjects

Players

Suppliers Engineer Local politicians

Interest

Neighbours within 200m Crowd

Context Setters

Low

Neighbours further away than 200m

Municipality

Low

High Power

Figure 4.8

Stakeholder Power–Interest Grid with examples of stakeholders

Source: Adapted from Ackermann and Eden 2011

The Stakeholder Power–Interest Grid can be used to pinpoint which stakeholders play an important role in the project as well as why they play this role. Stakeholders with low interest and low power are not vital to the project. They do not have much at stake and they are not able to spend resources on influencing the project. They are therefore termed ‘the crowd’. As the crowd is less important to the project only very few resources should be spent on these stakeholders. In the next quadrant, ‘Context Setters’ have low interest and high power. They are influential so their requirements and possibly their wishes must be considered and revealed – but as they do not have much at stake it will not be in their interest to spend resources on the project, for example by participating in time-consuming interactive communications like workshops. ‘Subjects’ are stakeholders with low power and a high interest in the project. For ethical reasons and perceptions of fairness, their requirements, wishes and concerns must be taken into account if possible. If they have a fair claim which is not met they may become important because they may be able to create a network enhancing their harm potential and thus their power. The last group of stakeholders is the ‘Players’. These stakeholders may be individuals or groups of individuals. They have high power and a high interest in the project and it is therefore important to allocate management attention to this group of stakeholders. Remember that stakeholders may be Players due to their direct power – but their power may also stem from a large network and/or a network containing other important Players. The Power–Interest Grid handles power as one-dimensional. However, as you have learnt earlier in this chapter, power is (at least) two-dimensional. Stakeholders may have power to harm – but they certainly also may have power to help – or

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43

both. To get an overview of the stakeholders in terms of help or harm potential you can prepare a Project Stakeholder Potential Graph in which all the stakeholders or possibly just the Players are represented by bubbles. The information in the graph may be extended by adding size or colour to the bubbles. A graph must be made for each issue considered as a given stakeholder may not represent the same help or harm potential for all issues. Figure 4.9 shows a Project Stakeholder Potential Graph. While the Project Stakeholder Potential Matrix which was displayed in Figure 4.3 assesses a single stakeholder, the Project Stakeholder Potential Graph shows how the stakeholders are distributed on ability to help and harm the project and thus gives a feeling of the amount and combinations of harm and help potentials of the stakeholder grouping in total. High

Stakeholder 1

Stakeholder 6

Stakeholder 2

Help Potential Stakeholder 3

Stakeholder 5

Low

Harm Potential Low

Figure 4.9

Stakeholder 4

High

Project Stakeholder Potential Graph

Source: Inspired by Savage et al. 1991:65

As the name says, the Project Stakeholder Potential Graph shows the potential to harm and help. To know whether you can expect a stakeholder to realize any potential, you need to add an extra dimension to the assessment – the attitude towards the issue at hand. A stakeholder who has a positive attitude will probably be inclined to help if possible and not be inclined to harm the project while a stakeholder with a negative attitude will not want to help but may be inclined to harm the project – to hinder or stop it if given the opportunity. Figure 4.10 shows the framework resulting from adding this extra dimension. We call this framework a Project Stakeholder Potential and Attitude Cube. In the figure each dimension only has two states but in reality they are all continuums.

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Positive Marginals

Positive Key Players

Positive Resourceful

High Negative Resourceful

Negative Key Players

Negative Marginals

Negative Show Stopper

Positive Show Stopper

Help

Positive Attitude

Low Low

High

Negative

Harm

Figure 4.10 Project Stakeholder Potential and Attitude Cube To the right in the figure, we find stakeholders who have high harm potential; at the top stakeholders, who have high help potential; at the front, stakeholders who have a negative attitude; and at the back stakeholders, who have a positive attitude. In Figure 4.11 you see the possible eight combinations of the three dimensions and the labels we have given them. Stakeholders who have high help and harm potentials are very important to consider; if they have a negative attitude it is inevitable to do something to change this in order to secure the contribution needed. In Figure 4.11, traffic light colouring has been used to easily point to the need for management attention. Red signifies urgent need for management attention, yellow that you have to consider this group, while green signifies that this group does not need attention at the moment. It is important to notice that this does not mean that you can completely ignore a ‘green stakeholder’ – you should monitor such stakeholders to notice if they move to one of the other categories. In addition to looking at the help and harm potential as well as attitude, you may also reflect on whether you need to make your categorization of stakeholders even more fine-grained. It may be relevant to add an assessment of the urgency and the legitimacy of the claim of each stakeholder (Mitchell, Agle and Wood 1997). Urgency refers to the extent to which a stakeholder claim is time-sensitive, critical and probable. A stakeholder with high legitimacy of his or her claim on a certain issue should, for ethical reasons, be given some attention even if you define that

methods for stakeholder analysis

Help Potential

Harm Potential

Attitude

Stakeholder Category

Need for Management Attention

+

Positive Key Player

YELLOW

-

Negative Key Player

RED

+

Positive Resourceful

GREEN

-

Negative Resourceful

YELLOW

+

Positive Show Stopper

YELLOW

-

Negative Show Stopper

RED

+

Positive Marginal

GREEN

-

Negative Marginal

GREEN

45

Figure 4.11 Management attention needed for different types of stakeholders stakeholder as Marginal because he or she represents low help and harm potential. Along the same lines, you may need to prioritize stakeholders with urgent claims over those stakeholders with less urgent claims at any given point in time.

Challenges in Undertaking Project Stakeholder Analysis The Project Stakeholder Register is based on an interpretation of the stakeholders and the project that you make at a certain point in the project life cycle. You should not treat it as a static entity or a universal truth. Relying entirely on an analysis made at the beginning of the project may be dangerous as new stakeholders may appear while established stakeholders may change their requirements, wishes, concerns and attitude. The influence of each stakeholder may also vary at different stages in the project process, something that may be difficult to foresee completely in the project planning phase. You may overlook important stakeholders or misinterpret their behaviour if you only go through the process once. Typically you will also have a better basis for the assessments of stakeholders and project needs once some parts of the project have been undertaken. Activities that seemed initially distant may be clearer to you later on and a rough overview may have been substituted by a more detailed understanding. It is important that you share this detailed understanding with other members of the project organization and that they act upon it. You should record the information in an appropriate way in, for example, a Stakeholder Register supplemented with some of the tools that you have discovered in this chapter.

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A further challenge is that some of the information raised in the project stakeholder analysis may be rather sensitive and should not be recorded in written documents for wider consumption (Jepsen and Eskerod 2009). Therefore, you should decide which decisions and arguments to record and store as well as the level of detail.

Implications for Stakeholder Management In this chapter we have presented some of the tools that you may use for creating an understanding and overview of your project stakeholders through a stakeholder analysis. A stakeholder analysis consists of three steps: identification, assessment and prioritization of the stakeholders as regards their need for management attention. Identification of the stakeholders involves determination of the boundaries of the project and who, inside this boundary, have the ability to affect or will be affected by the project. Stakeholder assessment involves determining the contribution needed from each stakeholder as well as their possible motivations to contribute as needed. An important part of this assessment is to reveal the direct or indirect power of each stakeholder to help or harm the project as well as their inclination to do so. Much of the information needed for the assessment must come from the stakeholders and, therefore, you may find it valuable to spend time on conducting workshops or interviews to establish this information. Stakeholder prioritization involves assessing the relative power of the stakeholders as well as their attitude towards the project and various issues connected to the project. You should always remember the volatile and implicit nature of the information needed and you therefore have to work with this analysis repeatedly along the project course.

Chapter 5

Planning Project Stakeholder Management

Stakeholder management includes much stakeholder communication. This can be in the form of for example face-to-face communication with each stakeholder individually, mass-communication to a number of stakeholders simultaneously through a project newsletter or a project website, or inviting a stakeholder to a planning workshop or a kick-off meeting. Other purposeful stakeholder-related activities might involve offering a stakeholder a formal role in the project organization, for example as a project steering committee member, or to delegate decision authority to a stakeholder, leaving it to him or her to prioritize between product feature alternatives or between alternative venues for an event. Many agreements with the stakeholders concerning project-related exchanges that affect them are communicated and settled in contracts and other forms of written agreements, the specifics of which are out of the scope of this book. As mentioned previously, the stakeholders typically have different harm and help potentials as well as different attitudes when it comes to the various issues concerning the project. They also differ on other characteristics as level of interest, knowledge and the time pressure they are subject to. Therefore, the need for management differs across stakeholders or stakeholder groups and, accordingly, it follows that the relevant communication activities will also differ. For some stakeholders a close dialogue and continuous interactions are needed in order to procure their contributions and take care of their interests. Others may just need to be informed about the project’s progress. To make best use of the project’s limited financial and non-financial resources you must first determine the aims of the stakeholder management activities and then decide on the means to apply them. You will need to make trade-offs during this process because the possible means will be constrained by the resources available. For example, you may realize that the project budget cannot cover the costs of all the project marketing materials that you would like as well as the certain types of events for the stakeholders that you find valuable, like an external two-days kick-off seminar. Likewise, you may prefer to interact with your stakeholders on a personal face-to-face basis but realize that this is not possible within your

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limited time for stakeholder management. A carefully worked out plan gives the best possible mix of activities given the resource pool. You may choose, for example, to approach more stakeholders with the same kind of generic activity and reserve those activities which are more demanding of money and time for the most challenging stakeholders. Alongside the decision on how to deal with the resource constraints for project stakeholder management, a further significant decision involves deciding how and to what extent you should involve the various project stakeholders in negotiations (for example, on the project purpose(s), project deliverables and project scope). Sharing knowledge, including the stakeholders’ and the project team’s insights, experiences and preferences, is an important way of improving your overall sense of the project. This will also help enhance the alignment of expectations, especially in the project formation phase and the project planning phase. Too much stakeholder involvement may hamper the project start, unnecessarily increase complexity, create expectations that are impossible or difficult to fulfil and be very tiresome for the stakeholders involved – including the project team. On the other hand, too little stakeholder involvement may increase the likelihood of problems, misunderstandings, unsatisfied stakeholders and fewer benefits harvested. Saving time and effort by an easy start (with minimal stakeholder involvement and negotiations) may result in difficult times later in the project; whereas more time and preparation at the start may pave the way for better knowledge sharing with the stakeholders, clear alignment of expectations and a smoother process (unless the project is terminated or permanently stalled due to disagreement). Planning project stakeholder management involves selecting a strategy towards each stakeholder that reflects the needs and constraints of the project and within this strategy relevant tactics and activities based on your stakeholder analysis. We recommend that you document the decisions made in the planning process in a Project Stakeholder Management Plan. You should be aware that the plan should only be seen as a set of guidelines. It represents your understanding of the project at a specific point in time. Therefore, it should be subject to deliberate updates as the project and your understanding of it changes. Further, the plan will never – and should not – be sufficiently detailed to account for all possible events and personal characteristics of all stakeholders. You should be ready to improvise when actually interacting with the stakeholders. In this chapter, we discuss proactive strategies for managing stakeholders, ways of interacting with and influencing stakeholders, and choices in communication design. We then touch upon reactive stakeholder management strategies. Finally, we give suggestions for the contents of the stakeholder management plan and discuss issues in keeping this plan up to date as the project progresses.

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Strategies and Tactics for Managing Stakeholders You may choose either a proactive or a reactive stakeholder management strategy. A proactive strategy implies that you try to anticipate what will happen in relation to the stakeholder and plan and act to mitigate events before they happen. This might involve keeping a positive stakeholder informed of progress via a newsletter. A reactive strategy implies that you do something in response to the actions and requirements of the stakeholder, for example communicate with the stakeholder ‘by exception’, in other words limiting your communication to times when action or decisions by the stakeholder is required. We recommend that you choose the proactive strategy as a default position and try to put yourself on top of the situation rather than being led by your stakeholder’s initiative. Please notice that ‘doing nothing’ in the relationship with a certain stakeholder does not necessarily mean that you are applying a reactive strategy. Doing nothing may be the result of a conscious decision based on the characteristics of the stakeholder. A proactive strategy is really more a mindset than a defined set of activities. The mindset implies that you continually reflect on how to deal with each of your stakeholders. Before we present details of the stakeholder management strategies let us draw your attention to two essentially different approaches to stakeholder management: the collaborative approach and the power-based approach. With a collaborative approach you interact with the stakeholders to find possible win–win situations and, if this is not possible, to find the least damaging trade-offs for the stakeholders. With a power-based approach you try to force or manipulate the stakeholders to comply with your preferences. We recommend the former for several reasons. A power-based approach is ethically unacceptable in contemporary management. It is at odds with any social responsibility or sustainability strategy. In addition, compliance through the use of power implies that you have some sort of power over the stakeholder, for example through formal leadership authority or the potential to reward and punish the stakeholder. This is rarely the case. Further, compliance through power only lasts while the person in power is able to exercise his or her power. Collaboration is a better route. If a stakeholder is convinced that the project in hand will bring benefits to him or her, you may expect them to contribute voluntarily to the success of the project because the costs incurred in making the contribution will bring benefits. Please notice that the two approaches, collaborative and power-based, can be seen as end points or extreme points on a scale and that they are not exclusive. You may find it necessary to combine the approaches – inviting your project stakeholders to collaborate while at the same time exercising a power-based pressure; for example, by pointing out the financial consequences for the stakeholder of the project failing to progress. Returning to the stakeholder management strategies, a proactive strategy implies that you consider whether the attitudes and behaviours of the stakeholders are

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sufficiently supportive of the project, and if so, try to sustain these attitudes and behaviours, or if not, try to influence them accordingly. To help you decide, you can use the Project Stakeholder Potential and Attitude Cube presented in Figure 4.10 and the stakeholder categories listed in Figure 4.11 as a starting point. Each stakeholder has a position in the cube which may not reflect their full potential. For each stakeholder you can therefore also define a desired position from the perspective of the project. If the present position is the same as or close to the desired position your aim is simply to keep the stakeholder at this position. You should be aware that keeping stakeholders where they are can also require some sort of management. If a Positive Key Player notices that for example a Negative Show Stopper is receiving a number of extra benefits from you to keep her happy, the Positive Key Player may feel neglected and that this is not fair. Her attitude may change from positive to negative. If the present position is different from the desired position you need to move the stakeholder. Moving stakeholders in the cube can have three different aims: change attitude, activate help potential and reduce harm potential. These can be complementary and are not exclusive. You may not always strive for changing an attitude completely, from negative to positive, as this may be burdensome. It may be enough to change a negative attitude to indifference since an indifferent stakeholder will not want to spend resources on hindering the project. Indifference is not sufficient to encourage a stakeholder to contribute actively to the project – but it may be enough that the contribution consists of not hindering the project and that the harm potential is not activated. An important part of stakeholder management is to facilitate and sustain that the stakeholder has a positive attitude towards the project or towards certain issues. In some cases, however, stakeholder attitudes may be entrenched or a stakeholder may simply not be committed, in which case his or her attitudes may well be based on rules-of-thumb, experiences from similar situations or a gut-feeling. In such cases, stakeholders can be difficult to influence as they will not feel that they need additional information to make their decision. In the following section you will learn more about planning project stakeholder management. Before that – let’s explore the options for proactive stakeholder management tactics. Figure 5.1 lists a series of tactics and tools for reaching the aims of your stakeholder management activities. The insights in Chapter 3 on stakeholder motivations can help you reflect on how you may move a stakeholder in the cube or sustaining their position. In that chapter you learned that the intention to act is shaped by an assessment of three elements: expected consequences, what is considered appropriate and fair behaviour of self and others, and expected capability to perform the behaviour. Let’s start with sustain the position of a stakeholder. Sustaining a positive attitude may be done by establishing and sustaining a perception of fairness – so that the stakeholder feels

planning project stakeholder management

Stakeholder Categories

Aims

Proactive Tactics

Examples of Tools

Sustain position

Positive Key Player Positive Resourceful Positive Show Stopper

Support perception of fairness Inform Acknowledge Engage

Newsletters Information Meetings

Change attitude from negative in direction positive

Negative Key Player Negative Resourceful Negative Show Stopper

Change assessment of consequences (expectations, benefits and costs, personal relevance) Enhance perception of fairness

Conversations Workshops Assign formal project role

Activate help potential

Positive Key Player Negative Key Player Positive Resourceful Negative Resourceful

Enhance possibility to contribute. Give cues to action. Use power-based pressure Enhance perception of appropriateness

Instruction Role modeling Engage in planning

Reduce harm potential

Positive Key Player Negative Key Player Positive Show Stopper Negative Show Stopper

Reduce power base Build own power base Identify substitutes

Networking Relying on several contribution providers

Figure 5.1

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Tactics and tools for proactive stakeholder management

that she and the other stakeholders are treated fairly. The sense of fairness may be introduced and enhanced for a negative stakeholder by offering him or her a formal project role with the potential to influence the project. The second possible aim is to change the attitude of a stakeholder. Remember, the formation of an attitude towards a given behaviour is based on an evaluation of expected consequences of performing the behaviour (in this case, contributing as needed by the project). A potentially useful tactic for changing the stakeholder’s attitude towards contributing would be to change the consequences for the stakeholder – increasing the benefits or reducing possible disbenefits or the cost of contributing. But you may also change their attitude by changing their expectations – increase their awareness of existing benefits or reduce perceived

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disbenefits or costs. A third tactic is to enhance the stakeholder’s perception of fairness by emphasizing appropriate and fair behaviour. You may wish to activate the stakeholder’s help potential. Stakeholders that have help potential are able to help – but they may not be willing to do so. Willingness is, of course, supported by a positive attitude towards the outcome of the contribution – but a positive attitude is not enough. The stakeholder may feel that there are obstacles hindering him or her in making the contribution. In such a case a tactic could be to show the stakeholder how it is possible to contribute. It may also be that the stakeholder is positive and wants to make the contribution but does not do it in a timely manner. In such a case the stakeholder may need a push to start contributing – you advise them when the contribution is needed and help them remember this. Some stakeholders may not be willing to make a contribution even though they are able to. In such a case you may choose to put pressure on the stakeholder. This is only possible for stakeholders that do not have high harm potential. Stakeholders with high harm potential may retaliate and threaten the project progress and other stakeholders’ benefit realization. You may apply power-based pressure on the stakeholder by informing them that their benefits will be reduced or the costs increased if the agreed contribution is not delivered as planned. If a supplier does not deliver on time and to the right quality they may not receive payment or may be asked to pay the extra transportation costs if the delivery is split into two instead of one. Such ‘punishments’ may be explicit, agreed and documented in the contract between the stakeholder and the project team at the project start. Other pressures may be more subtle and indirect, such as using storytelling to illustrate to the stakeholder that such behaviour is deemed unacceptable by the project organization and will therefore result in reduced benefits for the stakeholder in the future, either in the project at hand or in potential future cooperation between the stakeholder and the project’s base organization or the members of the project organization. An alternative tactic would be to appeal to perceived social norms regarding the appropriateness of a contribution. According to the logic of appropriateness, people may take on behaviour, even if they have a negative attitude towards it, if they believe that others will find it appropriate or even expected. They may also refrain from behaviour if they believe that influential others will find the behaviour non-appropriate. In other words, you may activate the help potential by pointing out the appropriateness of contributing. Members of the project organization may even appeal directly or indirectly to the stakeholder – ‘you owe me this!’ The fourth aim mentioned in Figure 5.1 is to reduce the harm potential. This may be done by reducing the power base of the stakeholder. Try adapting the project so that the contribution of the particular stakeholder is no longer of great importance or by identifying substitute sources for the needed contribution. Alternatively try reducing the relative power of the stakeholder by building your own power base through networking.

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Options for Communication Design Whatever the ultimate aim of the activities, strategies and tools, they will involve communication with and to the stakeholders. If this communication is poorly planned it may constrain knowledge sharing between the stakeholders and the members of the project organization. It may also mean that the stakeholders do not receive relevant information on time, that sensitive information may be revealed to the wrong audience, or that some stakeholders will lack information or be in need of attention in other ways. The project organization and all the project stakeholders have information and communication needs which must be identified and addressed as part of your planning of the project stakeholder management. The planning should consider the aim of the communication as well of the characteristics of the stakeholders (in terms of prior knowledge and experience, and attitude towards and commitment to the project process and the project outcomes). The stakeholder management plan should include communication decisions on: • • • • •

What is it that you want to communicate about with the stakeholders? Who is going to communicate? How will you reach your stakeholders? When do you need to communicate with which stakeholders? Which are the constraints, if any, for example concerning budget, legislation and contractual agreements?

What do you want to communicate? It is important that you plan how you articulate the project purpose and subpurposes. You should decide on an overall message about the main purpose that can be used generically with stakeholders. It is important that this message is simple, easy to understand and remember – like in a slogan. It is also a good idea to devise a project title that contains the message or a short form of the message, for example in an acronym. You may choose to appeal to different motivators depending on the aim of your communication. The communication about purpose and sub-purposes can be tailored to different stakeholders but it needs to be consistent. This means that you may emphasize different parts of the purpose and sub-purposes to different stakeholders but you may not communicate conflicting purposes to different stakeholders. Doing so will undermine your credibility. Let’s take the example of a health promotion project within a company that aims to reduce the costs which result from sick leave and employee turnover. The activities related to the health promotion project will be designed to increase productivity in the daily work, employee perception of well-being, employee satisfaction, reduce requests for other incentives and improve the company’s image as a caring and attractive modern workplace. The overall message might describe general

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benefits related to the health promotion activities – for example, ‘Towards a healthy future!’ Messages tailored to subgroups could then explore cost reduction in communication with top management, improved well-being for employees and an improved reputation for the HR department. Once you have decided what to say you should consider whether you are dealing with a stakeholder who has a positive attitude towards the issue at hand or one with a negative attitude. Each will react differently. Communication which only presents the positive side of an issue will work best to sustain positive attitudes. It does not work so well if a stakeholder has a negative attitude. For these groups, communication that has both positive and negative content works better at changing their attitude from opposition to support (Eisend 2007). This suggests that communication aimed at sustaining a positive attitude may emphasize the benefits of the project or of making the contribution while communication aimed at changing the attitude of a negative stakeholder should acknowledge the reservations of the stakeholder while you emphasize the benefits. If a stakeholder is negative because of concerns about disbenefits and involved costs you need to address these concerns in your communication with this stakeholder. Likewise, if a stakeholder is concerned that others – for example colleagues – will disapprove of the stakeholder taking time to make the contribution to your project (rather than another task), you need to deal with this challenge in your communication. In other words, to move a stakeholder from a negative attitude towards a positive one you must remove the negative aspect by removing the reasons for this attitude while at the same time, or subsequently, building the positive attitude through communication about relevant benefits.

Who should communicate? In order to create and sustain positive attitudes to activate the help potential it is not enough that you know what to say and how to say it. It needs to come from someone influential. You may not be the best choice for this as you talk about the benefits of the project given your personal interest in it. To overcome this problem you can make use of influential spokespersons, opinion leaders and role models to communicate with the stakeholders. How do you know who will be influential? From research (Ohanian 1990), we know that a communicator is influential if he or she is similar to the receiver of the message in terms of a number of characteristics and if they are appropriate communicators because they have a relevant relationship with the topic. Further, communicators must be perceived as credible to be influential. Credibility requires expertise, trustworthiness and attractiveness. Expertise can come from knowledge or experience. As project manager you may tick some of these boxes as you have expertise in the form of knowledge about the project and have a relationship with the project and therefore you fit the message. However, project managers

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are seen to have considerable vested interest in project approval and progress. Consequently, some stakeholders may not perceive them as entirely objective and may not take what they say for granted even if they regard a given project manager as generally trustworthy. On top of this the stakeholder may not be able to identify with the project manager. The end user of the project deliverables may be very different from the project manager and may be skeptical about his or her ability to understand a user’s needs. Finally, project managers may be easy to ignore as they do not have any power to offer extra benefits during the project process, such as extra payment or the potential for future cooperation. This may be aggravated by the fact that they are only managers of a temporary organization and therefore may not have long-term influence in the base organization. All of this suggests you may find it beneficial to ask for help from other people to communicate about the project; an influential spokesperson, an opinion leader or a role model who has expertise may all be perceived as trustworthy, attractive and empathetic to the receiver of the information. Attractiveness has a broad sense in this context. An attractive person is a person whom the receiver regards as someone he or she would like to resemble or to be on good terms with. This could be a ‘celebrity’ within the company, such as the CEO. Shared characteristics are especially important for role models as the stakeholder should be able to imagine that the experience of the role model relates to him or her. The role model may share characteristics with the stakeholders in their current position, alternatively they may share characteristics with a role to which the stakeholder aspires; he or she might be a career role model. Stakeholders with positive experiences can also be used as role models for other stakeholders if they are willing to share those experiences. The use of role models is especially relevant when you need to activate help potential from stakeholders who are unsure of their capability to help or are concerned about the costs they may assume in making the contribution. Seeing how others have done something makes it easier to envision how you would solve the task yourself. This strategy would be relevant for Positive Key Players and Resourceful for whom you need to activate their help potential. Spokespersons, opinion leaders and role models are related but differ in important aspects. The role model represents the stakeholder or someone that the stakeholder aspires to be while spokespersons and opinion leaders communicate about the project. Spokespersons openly speak on behalf of the project while an opinion leader conveys his or her personal opinion to his or her peers. An important part of planning stakeholder management is to decide who would be in overall responsibility for communication with each stakeholder. As previously mentioned the person who communicates with the stakeholder may not be the project manager or from the project team at all. You may find it better to appoint a spokesperson or a role model that better fits the targeted stakeholder. However, you should still assign responsibility for managing each stakeholder to one of the

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members of the project organization. This person should follow up on planned activities that involve their allocated stakeholder(s). We recommend that each stakeholder is offered one point of contact within the project organization so that the stakeholder always knows whom to turn to.

How to communicate? You need to think about how you are going to communicate. This includes how to present the main project purpose. Think about what resources in terms of images, symbols, pictures or stories of role models will have most impact and how you will use any text. You should be aware that the level of commitment (attitude strength) of the stakeholder in question determines his or her willingness to spend time listening or reading about the project. The Elaboration Likelihood Model, often abbreviated to ELM, states that when individuals are not committed to an issue, they are not willing to spend cognitive effort on learning about the issue (Petty, Cacioppo and Schumann 1983). We define committed project stakeholders as the ones who either have a very positive or a very negative attitude towards the project. This is in opposition to stakeholders who are indifferent. The indifferent stakeholders will be in the middle of the attitude scale of the Project Stakeholder Potential and Attitude Cube. They are unlikely to spend time listening to or interpreting complex messages because they don’t believe they need the information. To communicate with these stakeholders, you should make use of the so-called peripheral route to persuasion involving repetition of a simple message using nonverbal communication (Petty, Cacioppo and Schumann 1983). For example you might start your communication of the project purpose by using the full message ‘In the future we plan to work smarter, not harder’ and subsequently introduce the non-verbal hand symbol ‘thumbs up’ together with an even shorter verbal message ‘smarter, not harder’ when you meet these stakeholders at formal and informal occasions. This is the type of learning that is referred to as classical conditioning (Pavlov 1927). In combination with this, you can consider using operant conditioning (Skinner 1938). This type of learning establishes a positive association with an action by rewarding the action. This can be in the form of giving rewards for contributions along the way or by using the example of role models who have benefitted from contributing in the past. Rewards can be financial but they can also be intrinsic in the form of a positive experience associated with making the contribution. The rewards will support the stakeholder in the belief that it was a good idea to contribute and thereby help create a positive attitude, encouraging that stakeholder to contribute again. This approach may be especially relevant in sustaining the attitude of Positive Key Players, Positive Resourceful and Positive Show Stoppers – and in activating the help potential. If a stakeholder has a strong attitude towards the project or the issue at hand, you can use the direct route to persuasion employing verbal communication (for example dialogue or printed information) explaining the benefits that the project will bring.

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This information can be aimed at changing the attitude of negative stakeholders but can also be aimed at sustaining the attitude of positive stakeholders by providing supporting arguments. This approach is especially relevant if their support is under attack from negative stakeholders. Because committed stakeholders have an interest in the issue they will be motivated to learn how they can best act to support their attitude. This means you can communicate with them directly about the project and discuss benefits, costs and possible side effects verbally or in writing. Stakeholders are typically not all equally committed or opposed to all issues throughout the project. As you will not have resources to make tailored communication to each stakeholder about every issue, you may wish to aggregate stakeholders into groups who share the same characteristics (segments) and then tailor your communication to these groups. Another option is to use both verbal and non-verbal communication at the same time, for example posters with pictures and the slogan along with text giving further explanation or leading to where the reader can find more information. This way the communication addresses stakeholders with different levels of commitment; the uninterested stakeholder will be exposed to the non-involving pictures and the slogan while the more committed stakeholder can find more information by reading the text or accessing the extra information available. You must also decide on how you will contact the project stakeholders. There are several alternatives, each with advantages and disadvantages. You will need to decide whether the communication will be interpersonal or impersonal. Interpersonal communication takes place between people; in the form of a dialogue between you, a spokesperson or an opinion leader and the stakeholder in question. In impersonal communication the sender is not an individual and the receiver is not a specific person. Impersonal communication often makes use of mass media and is therefore often referred to as mass communication. Another question concerns to what extent you will enable the stakeholder to control which project information he or she receives and when and how it is received. Information which you impose on stakeholders is referred to as push communication while information available to the stakeholders that they may choose to access as needed is referred to as pull communication. Figure 5.2 gives examples of different types of stakeholder communication often used in projects. Each type of communication has its own advantages and disadvantages. Impersonal communication is good for reaching many stakeholders at any one time in a costeffective way. Impersonal communication does not necessarily imply that all stakeholders get the same communication. Stakeholders may be segmented into groups with similar needs or characteristics and the communication adapted to each group. Impersonal communication can be conveyed through broadcast media or the internet. It can also take place in print as, for example, posters and leaflets. Another possibility is presentations at various types of meetings. Depending on

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Interpersonal

Impersonal

Push

Pull

Figure 5.2

Presentations at meetings Workshops

Newsletters Posters Direct (e)mailing Merchandise

Hotline ‘Open door’

Project webpage on the internet and/or company intranet in the form of databases, information, e-learning resources etc.

Examples of different types of communication

the potential for feedback, questions and debate, a meeting may be characterized as impersonal or interpersonal. When you impose the same information onto many stakeholders this is impersonal push communication. This type of communication may seem effective but it is only influential to a limited extent as the message and timing has not been tailored to individual motivations and characteristics. Nor will the information necessarily reach the stakeholder at a time when the stakeholder needs it. Consequently it may simply be ignored. However, impersonal push communication is a good choice for some project information; it is relatively cost-effective and can be put into a long-term plan executed by marketing staff hired or an external agency. This type of communication generally requires only minimum effort on the part of the receiver as it is designed simply to be consumed and requires no interaction. This means that impersonal push communication is suitable for making the Marginal stakeholders aware of the project and to keep these stakeholders informed along its course. Such communication may also be adequate for Key Players, Resourceful and Show Stoppers in those phases of the project at which their interest is at a low level. A coming user of a product developed in a product development project may not be able to give useful inputs during the project course and will therefore be classified as Marginal and accordingly ignored. Only after the close-down of the project and when the user is going to use the product the user will be classified as Resourceful. However, such a user may be more inclined to start using the

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product when it is launched if he or she has been aware that the product was being developed and has imagined the value of its use. You may engage in impersonal push communication in different ways. The one approach that may first come to mind resembles advertising as you ‘announce’ the project on posters, leaflets, broadcasts and the like. Other techniques for project promotion can involve Public Relation (PR) activities and the exposure of the project in other ways. Project PR involves public communication of the project which is not paid for or produced by the project team, for example an article about the project in a newsletter distributed by the base organization. Such PR needs a story. At the beginning of the project you can relate the story describing the genesis of the project or the basis for its main purpose, for example by focusing on the problem that the project will solve. At later stages you may be able to share user experiences of those involved with prototype versions of the project deliverables, using these users as opinion leaders. Creating this kind of PR along the project course is easier if you plan for it and combine it with the milestones. Alternative ways of generating project exposure can include merchandise such as mugs or T-shirts with the project logo. When using PR and merchandise remember that, since you aren’t paying the media to carry your stories or people to use your merchandise, you’ll need to find other ways of motivating them to do so – you’ll need stories that appeal to their audience and that may be published with little work for an editor. Likewise, any merchandise should have an appealing functionality for the target group, be suitable for public use and be appropriate to ‘the tone’ of the whole project. The choice of how you will reach the project stakeholders also involves choice of media. You’ll need to think about the richness of the media which is defined in terms of feedback capability, number of cues used (words, numbers, symbols), language variety (body, verbal, numbers) and personal focus (Daft, Lengel and Tervino 1987). Certain media offer the stakeholder more cues in form of verbal and non-verbal communication – variation in tone of voice as well as expression of emotions and a capacity to give the sender and receiver immediate feedback meaning that they can have a dialogue. Such media are rich media. Face-toface communication between two people, a sender and a receiver, represents the greatest richness, whereas a telephone conversation is leaner and a written memo is very lean. Some project information can be well presented on a printed piece of paper in black and white, while other parts of the communication need to be undertaken by much richer media in order to ensure success, whether this is knowledge exchange or clear instructions on what to do in order to contribute appropriately. Media not only differ in richness, they also differ in their ability to reach the relevant people and in their ability to convey information in more than one direction. Further, some media are able to convey communication between many

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persons at a time while others only allow one-to-one communication. In selection of media for project stakeholder management you should consider whether you need advanced forms of communication. You also have to make sure that you will reach the relevant stakeholders with whatever medium you choose and think about the efficiency of the medium – that is the ability to fulfil the aim at the minimum cost. It may be more efficient to take time for interpersonal communication (a chat) with a Negative Key Player than to expose him or her to posters conveying a message about the benefits of the project. It is important that the impersonal communication reaches the intended stakeholders. One way to ensure this is to communicate directly with the stakeholders. This may be in a meeting or via e-mail. Another way of reaching stakeholders is to think about where they are and what mass media they commonly use and then place the information where they will trip over it. For example, you could post information in the canteen where people stand in line waiting to be served, or in hallways or on a company website for employees. Which platform is most suitable depends in each case on how deep an interest the stakeholder has in the project. Messages sent by direct mail are certain to reach the intended stakeholder. However there is no guarantee that the stakeholder will actually read the e-mail (or letter). Some may be irritated by what they perceive as spam. Therefore it is sometimes wiser to use platforms where the chance of actually reaching the person in question is lower but where the exposure is less intrusive. Impersonal push communication is appropriate for informing stakeholders who do not have deep interest in the project as this type of communication does not require the stakeholder to actively seek it out. Impersonal push communication is useful for creating awareness and, potentially, interest in the project and its deliverables and outcomes (Schiffman and Kanuk 2009). However it is ineffective at changing attitudes or persuading individuals to act in certain ways if they are not inclined to do so because it does not address their specific concerns. To change attitudes you need to be able to address the different concerns of negative stakeholders, acknowledge them and deal with them. For this you need a flexible medium. The most flexible medium is face-to-face communication (Daft and Lengel 1984), also referred to as interpersonal communication or personal communication. In projects, interpersonal communication may take place between you and a stakeholder. It may also take place directly between stakeholders themselves. Interpersonal communication can take place between people in the same room but can also be conveyed by the use of communication media such as the telephone, audio or video-conferencing. Personal communication allows multidirectional exchange of information – that the communication can go both ways immediately as well as between several people at a time. This means it is well suited for ensuring a common understanding, provided of course that the people involved are good at communicating and that the person setting the agenda is effective.

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Personal communication is flexible and allows adjustments along the way. Each party may clarify issues important to him or her, and explanations and answers can be tailored to maximize the understanding of each person. Further, the communication can be adjusted on the fly if it is not understood by the receiver as he or she can ask for clarification. In addition, tone of voice and body language is often revelatory of unease and insecurity enabling you to probe for comments and feedback when relevant. This means that minor issues that are big enough to cause confusion but not big enough to warrant actual complaints have a good chance of being aired. Interpersonal communication also has drawbacks. It is more demanding than impersonal communication. You need to set up and attend a meeting at a given time. Further, personal interaction may be mentally demanding as both sides of the communication need to be engaged to ensure the quality of the interaction. In addition, interpersonal communication is most effective in small groups as the parties need to be able to talk to each other. This is a communication style that will be relatively resource heavy, at least in terms of time and people. In a big group interpersonal communication may be possible if you allow opportunities for a dialogue. You can encourage people to ask questions, state their opinions and offer ideas. This may even take place in cyberspace on platforms such as Twitter and Facebook. And there are emerging styles of meeting that involve a face-to-face audience with voting or information-sharing technology. In spite of the remedies offered by modern technology, the drawbacks mean that you should consider carefully how you best spend the limited option for use of interpersonal communication. Bear in mind that a disinterested stakeholder is unlikely to commit the time or effort to take part. We have looked into various issues around the use of push communication. Instead of forcing information onto your project stakeholders you may prefer pull communication and put the stakeholders in control of what information they get and when they get it. Pull communication should enable the stakeholders to customize what information they receive and decide when and where it is received. It can be impersonal and made available on internet sites, intranet sites, e-learning systems and various knowledge repositories. Pull communication can also be interpersonal, for example in the form of a telephone hotline or a hotline providing chat facilities. The communication resources may be available for a restricted group of project stakeholders or they may be accessible for a large, open audience, for example on an open access internet site. For a project, impersonal pull communication will typically involve a project website for the project including both open access and limited access areas. Some of the project information may be carried in databases while other information may be better expressed in the form of instructional video. You can also offer games or quizzes to encourage the stakeholders to learn how to perform a task such as using software and to check their learning in an engaging

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way. If you are using more lighthearted tools such as quizzes double check that they are appropriate to the project and the audience. Impersonal pull communication offers many of the positive features of impersonal push communication and less of the problematic features. It allows you to develop and publish information efficiently on the basis of a plan. Impersonal pull communication is flexible and allows many types of stimuli – verbal, audio and pictorial, static as well as dynamic. Impersonal pull communication can be a useful supplement to personal communication, allowing stakeholders to prepare for meetings and workshops and to follow up on issues from such events. Pull communication may not allow you to reach all relevant stakeholders as the stakeholders on their own account must actively seek the information. This requires a certain level of interest in the project. Further, a stakeholder must know that the information is available and how to find it and he or she must have access to the requisite technology and the skills to use it. Therefore, pull communication must be supplemented by communication designed to create awareness of the project and informing the stakeholders about the availability of the information. Pull communication can be designed at different levels of ambition – from a simple project website to advanced database systems and e-learning platforms. It can be quite expensive to choose more adventurous information resources. Consequently, these resources are best used for types of information required by many stakeholders. In most projects you need to make use of multiple channels of communication to reach the various groups of stakeholders. You can enhance the flow of communication by deliberately supporting interpersonal communication between stakeholders, for example from opinion leaders to other stakeholders. Such flow of information must be carefully planned and the opinion leaders carefully selected. He or she should be well equipped with knowledge and information as well as interested in conveying the message in question. You need to select and coach stakeholders who are best-suited to act as opinion leaders. Opinion leaders are generally most effective communicating with those motivated and interested in the message and in need of the information it contains (Schiffman and Kanuk 2009). For stakeholders who take on a more passive role you will need to find a way of communicating more directly to create awareness of and interest in the project. This kind of information is designed to increase attention and perhaps raise interest rather than advocate.

When to communicate? As well as deciding on how to word the project information, how to present it and how you will reach the stakeholders, you must decide when and with which stakeholders you will communicate and who is responsible for each task in the

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communication plan. All of your activities need to be subject to a realistic budget. This may have been stipulated as part of the project budget. It may also be allocated at a later stage based on needs identified in the communication plan. The timing of the communication must be decided on the basis of an estimation of: (1) when each stakeholder needs information or attention; and (2) when the project organization needs to communicate with the stakeholders to receive information about the stakeholder’s insights, experiences or preferences or to co-create knowledge, solutions or ideas. You can develop an understanding of this schedule using the results of the stakeholder analysis and looking at the communication tasks related to each phase in the project. Timing decisions include what information each stakeholder will receive and when, as well as at what stage(s) each stakeholder will be involved in various kinds of communication activities such as participatory workshops. The communication can be synchronous – in which case the information is prepared, sent and received simultaneously – or asynchronous (Carmel and Agarwal 2001). The advantage of using asynchronous communication is that information can be prepared and delivered to many stakeholders at one point in time. You can communicate project information from your desk at a time that is convenient for you. Use of asynchronous communication does have drawbacks as the project information may be conveyed at a time when it is not needed by or of interest to the stakeholders. They may ignore it, forget it or may even feel that they are being spammed or, alternatively, are in a communication vacuum. Further, the time spent on making decisions can be lengthy as there are time lags between sending and receiving. Finally, asynchronous communication with many individuals can become complicated, for example running an e-mail stream involving several participants. Because of these drawbacks it may, in the end, be more efficient to use synchronous communication even though this requires that the parties in the communication must be available at the same time and that somebody must spend time arranging the meeting. The internet and increasing band width together with the ubiquity of webcams and availability of easy-to-use software for virtual meetings has enhanced the potential of synchronous, rich media for communication. You must also plan the level of communication at different stages of the project; in other words, the amount of communication and organizational levels involved. During the course of the project there are times at which the level of communication needs to be higher than at other ‘calm’ periods. The reasons for an escalation in the level of communication could be that the project experiences a crucial moment or stage at which new stakeholders must be involved in the project. Another reason for escalating the level of communication can be a crisis in the project creating a demand for the involvement of people at a higher level such as the project owner or the project steering committee, line managers or even the CEO. When planning stakeholder management you should try and foresee at what stages of the project

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there will be a special need for communication with particular stakeholders. You should also make contingency plans for project crisis management, for example by defining how to escalate the level of communication if required. Determine who should be involved if a crisis occurs and which (types of) decisions each of these should be commissioned to take, for example in terms of changes in scope or budget. The escalation plan may also clearly state who should be involved in the communications with the various stakeholders; this may be the project manager, the project owner or even representatives for top management of the base organization. It may also be wise to ask some of the stakeholders, for example a client, to make an escalation plan for decision making and communications related to the project in their organization so that delays are minimized in the case of a project crisis.

What are the constraints? What may be ideal in terms of project communication is one thing; exactly what is possible within the project budget, legislation, contractual agreements and other constraints, is quite another. Bear that in mind when prioritizing your activities.

Communication across the project phases In planning stakeholder communication you may find it useful to consider the various tasks that are in focus in each of the project phases. These tasks were outlined in Figure 2.3. Typically, in the project formation phase, you will be involved in complex negotiations with key stakeholders to determine project purpose and scope. This is a process that requires flexibility and multidirectional synchronous communication. Workshops enable this type of communication and are a good solution at this point. If the project is geographically dispersed you may set up workshops in virtual meeting rooms. They are most likely to work effectively if the stakeholders know each other and there is a certain level of trust in advance. To enable the key stakeholders to prepare for the workshops you may use impersonal push communication and send information materials to the stakeholders. You may also start setting up a website on which they can find information they may require along with support tools. In the project planning phase you need to align expectations among the key stakeholders, create awareness of the project and its general purpose and start to build relationships. Impersonal push communication is good at creating awareness and shaping expectations of Marginal stakeholders. It may also be suitable for instructing Positive Resourceful people on how they can make the needed contributions with the least effort, for example by providing instructional videos. To create relationships and to change attitude you probably need personal communication. In the project execution phase you need to keep positive stakeholders informed and acknowledge their contribution. You also need to maintain relationships. This again requires both impersonal and personal communication. The same goes for close-down activities.

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Reactive stakeholder management tactics Although we recommend that you are proactive in stakeholder management, you also need to be aware of some reactive tactics. These may be tactics to use for response to stakeholder requests or in a crisis or conflict management situation. You will need to decide on a response tactic if a stakeholder reveals requirements and wishes during the project that you hadn’t anticipated. The response tactics are listed in Figure 5.3 along with examples of relevant activities. One response to late stakeholder requirements and wishes is simply to adapt to them. This will often be appropriate for stakeholders that have a large harm potential – Key Players and Show Stoppers. If adaptation is not possible or too burdensome you are better off looking for a compromise. If a stakeholder is Marginal or possibly Resourceful and not able to harm the project, you may be able to encourage the stakeholder to adapt to your own preference on the matters and dismiss their requirements. Another option is to simply ignore them or (indefinitely) postpone a response. If you choose to do this you should remember that treating stakeholders in a way that is considered unfair by other stakeholders may be damaging to the project because of the perception of fairness. Tactics

Activities

Adapt

Adapt to the stakeholder’s requirements and wishes.

Compromise

Negotiate with the stakeholder. Figure out and tell the consequences of fulfilling the requirements and wishes, like increased costs for the stakeholder and delays. Lobby to change or prevent requirements of the stakeholder. Listen to the stakeholder’s requirements, wishes, and concerns. Offer more benefits. Reduce stakeholder’s costs. Offer influence.

Dismiss

Say no to the stakeholder’s requirement and wishes. Refer to earlier agreements and the project plan. Give detailed reasons for the no.

Ignore

Delay answer (infinitively). Refrain from answering.

Figure 5.3 Response tactics in stakeholder management Response tactics represent one type of reaction in reactive stakeholder management strategy. Another type of reaction involves crisis or conflict management tactics. These tactics come into play when something happens that can seriously hinder

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the project progress or the benefit generation – or lead to conflicts or even communication breakdowns with the stakeholders. In all likelihood you’ll need to combine them with response tactics – for example, undertake activities to reach a compromise with the relevant stakeholders. An example of a crisis tactic is a solution dialogue (Attrup and Olsson 2008) – an invitation to the stakeholder(s) in question to work together and focus on the project task and the future and avoid fixating on the past and the broken relationship: ‘Clear the table’ and ‘start from here’. A third party dialogue is an alternative tactic (Attrup and Olsson 2008). Invite a neutral person who is external to the project and can help facilitate and mediate the dialogue. Issue escalation is a third tactic (Attrup and Olsson 2008). This means that you escalate the issue to someone at a higher hierarchical level in the project organization, the base organization or the stakeholder’s organization. The advantage of this strategy is that the person at the higher level has more decision power and may also have more relevant knowledge, perhaps around strategic options for the organization which he or she can feed into the decisionmaking process. Issue escalation may also have symbolic undertones: ‘We really take this issue seriously and therefore we are willing to involve people at a higher organizational level to figure out a solution.’ As mentioned, when discussing the proactive strategies it may be a good idea to define escalation procedures at the start of the project so that precious time is not lost on working out who to involve if a conflict or crisis arises. Sometimes the crisis is so severe that the relationship with the stakeholder cannot survive. In which case your tactic might be to invite the stakeholder to a dismissal dialogue (Humle 1999) explaining, face-to-face, why the cooperation cannot continue. Legal trial is yet another tactic.

Dynamics of Stakeholder Management and FollowUps In the previous chapters you have learned about ways to establish an overview of the project stakeholders and the central elements in a project stakeholder management plan. The advice was given from a static perspective, talking about the stakeholder analysis and the stakeholder management plan. The world, and with it, projects, is however dynamic and consequently the project stakeholder management plan needs to be adjusted as changes occur. What is more, it is most likely impossible to make a stakeholder analysis including all relevant details in the project formation phase as the stakeholders will not be completely aware of their preferences at this time. They may also feel that they do not know you well enough to be willing to disclose their preferences and considerations to you at the outset. The project is a temporary organization and it may be that you will never have worked with at least some of the stakeholders previously. Be aware that you may need to invest time and effort to build relationships with the stakeholders before they are willing to share their concerns with you.

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The structured stakeholder management planning process takes place during the project planning phase to ensure that stakeholder-related issues can be incorporated in the project plan. The main purpose of explicit project stakeholder management planning, including an assessment and selection of stakeholder management strategies and tactics for the various stakeholders, is to enable you to interact with them in a carefully thought through and timely manner. The results of the analysis and planning efforts constitute a basis for decisions and plans for the project. To get the project properly assigned and started you must do some preliminary analyses and planning during the project formation phase. However, it is risky to rely on this work for the whole course of the project because you are unlikely to be able to grasp the details of the stakeholder coalition in terms of who is more or less important, as well as characterize each of the stakeholders on several dimensions at this time. Therefore you will need more thorough analysis and planning in the project planning phase. You may well need to repeat the analyses later on as new stakeholders emerge and as your insights and knowledge of the stakeholders grow, revealing new issues. Unfortunately, we have seen many problems related to stakeholders during projects even in cases where time and resources were spent on stakeholder management planning in the project planning phase. This was because changes took place in the coalition or perceptions of stakeholders and the plan was never validated or revised during the course of the project. Consequently, too much time and too many resources were spent on stakeholders who only required modest attention and too few resources were spent on stakeholders who in the interim had grown in importance and in need of attention. In other cases we have seen stakeholders disengage because they felt neglected, forgotten or unfairly treated. The solution to these challenges is to develop a follow-up plan; the idea being to establish when and how to monitor and follow-up on the planned activities. The output of the process is part of the stakeholder management plan. We cannot offer a generic rule as to how and when it is most appropriate to follow-up on the stakeholder management plan. This depends on the conditions and the situation of the project at hand. However, if the members of the project organization are aware of the value of establishing criteria for follow-up actions and even a schedule for evaluation and revision of the activities undertaken, the project is already well served. One suggestion for a follow-up plan might be to agree that evaluation of the project stakeholder management will become an agenda item for the project meetings which take place on a regular basis (Vaagaasar 2006). Another suggestion is to review the stakeholder management plan at stage gates between phases and at other decision points (Mikkelsen and Riis 2003).

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The follow-up process should include an assessment of the position in the Stakeholder Potential and Attitude Cube of existing stakeholders and an evaluation of the effect of steps taken to ensure the needed contributions from these stakeholders. A concise evaluation is only possible if the stakeholder management plan contains specific measures. However, it is not always possible to set up such measures and it may also be difficult to obtain relevant data for making the evaluation. Many aims in stakeholder management, such as for example to change an opinion, are ‘soft’ aims. Even if a measure is agreed it may be hard to gather data continuously without bothering the stakeholders with endless evaluation forms. Evaluation of the stakeholder management effort may therefore need to be carried out based on ‘soft’, non-representative information about the stakeholders. Nonetheless, it is important to try and establish objective measures of the effects of your efforts to manage the stakeholders, for example the number of complaints by telephone, mail or in person (and the trends in this data). Another objective measure is to what extent stakeholders contribute as required, for example delivering according to schedule. In addition to reassessing the original stakeholders, it is advisable to conduct a stakeholder analysis for emerging stakeholders. This can take place in the context of a stakeholder management plan review but alternatively it may take place at any time when you become aware of new stakeholders – including those who may simply have been overlooked in the original stakeholder analysis.

The Project Stakeholder Management Plan The outcome of all this activity is a Project Stakeholder Management Plan. The context of the stakeholder management plan is the project plan and the communication budget for interactions with the stakeholders. In addition there may be legal or other constraints with which the communication must comply. It may also be that organizational policies, for example, prohibit the use of direct mail. Or it may be that mass communication must exhibit a variety in the use of role models as regards for example sex, age and ethnicity. At a point when it is not decided what type of information is preferably used for each stakeholder, it is not efficient to acquire detailed knowledge about all possible legal and organizational constraints. It is, however, advisable to assign responsibility for acquiring relevant knowledge about these issues as the plans get more detailed. The project stakeholder management plan should contain two elements: a general section listing decisions that apply to all stakeholders and a specific section giving an overview of decisions concerning the management needed for individual stakeholders. The general part of the project stakeholder management plan contains the overall communication of purpose as well as general descriptions of the project and its expected process. It is well worthwhile to agree a glossary of terms covering

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central concepts for project management such as milestones, deliverables and so on, and it may also contain important technical or legal terms. A glossary helps ensure consistency of the information. It also helps communication in a project team in which members may come from very different backgrounds and have varied levels and areas of knowledge. You may also find it beneficial to develop information material that can be used across different groups of stakeholders and put this information in a place where it is available for anyone responsible for managing specific stakeholders. The development of such common resources should be made for issues that are of common interest. Beyond that, it may be easier and cheaper to develop what is needed along the way. Material that involves graphical design, such as a plan illustrating the project and its course as well as printed materials and merchandise, will often be produced and stored in some kind of common resource pool for the project. There are other issues that need to be decided on a general basis. One such example is the level of communication about the project to stakeholders. At what stage(s) should we expect critical times and therefore, potentially, a need for more intense communication – perhaps involving managers at higher levels in the project organization or the base organization? In that context you should consider developing a crisis communication plan. Which stakeholders can lend important support to the project if extra support is needed? As mentioned, the stakeholder management plan should contain a follow-up plan linked to dates for important milestones or deliverances, or linked to progress through the phases of the project. You’ll need to agree a method for evaluating and updating your various plans. One simple approach could be to set up a meeting in which every person responsible for management of certain stakeholders accounts for the status of that stakeholder in relation to the project and against the plan. This will help you establish the stakeholders who will need greater attention in the next phase. All of this constitutes the framework for managing the various stakeholders. Figure 5.4 provides an overview of the issues and decisions you’ll need to address as you build the framework. The answers to these questions provide the basis for a project stakeholder management plan. This plan builds on the output from the project stakeholder analysis and your subsequent decisions about management activities for each stakeholder. To create planning tables that are manageable, we suggest that the list of stakeholders with the traffic light colours is copied into a new file so that the old and current version can be saved. This file then contains the list of stakeholders along with space for you to record your management decisions (Figure 5.5).

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• What are the aims of your stakeholder management strategy? Sustain position, change attitude, activate help potential, reduce harm potential Short-term or long -term relationship About whole project or specific issue • What will be the challenges in the communication? Negativity or lack of interest Competition for attention Constraints like time pressure and resources available Complexity in purpose Conflicting interests among stakeholders • What approach will you take to project information? One-sided or two -sided Verbal or non-verbal, language

Figure 5.4

• How will you reach stakeholders? o Impersonal versus interpersonal o Push or pull o Media used (reach, richness) o Payed for or PR o Spokespersons, opinion leaders, role models • What are your time frames and your budget? o Time frame and frequency o Synchronous or asynchronous • How will you assign responsibility? What plans should you establish to cover follow-up, evaluation and updates

Issues to be considered in the stakeholder management plan Position in cube

Challenges

Strategy

Tactic

Tools and activities

When

Responsible

Project owner Customer Sales department Supplier User group 1 Other stakeholders….

Figure 5.5

Stakeholder Management Table with examples

Note: Dark grey signifies ‘red’, light grey signifies ‘yellow’ and white signifies ‘green’

Chapter 6

Ethical Issues

Projects have an impact on people and organizations in a variety of ways – through the project process (project team members and stakeholders will have new tasks and responsibilities to fulfil), project deliverables (stakeholders may need to adjust their work or their home lives to accommodate change) or project outcomes (stakeholders may enjoy benefits but also suffer temporary or de facto disbenefits too). You will need contributions from individuals and entities to accomplish the project and harvest the benefits. The project manager and the other members of the project organization will need to make many choices in terms of what to do and how to deal with the interests and concerns of all these project stakeholders. In that context it is wise to consider the ethical issues you face in your behaviour towards project stakeholders. By ethical behaviour we mean behaviour that is acceptable according to professional, social or moral standards. Dilemmas will arise because sometimes you may be torn between the need to behave in ways that seem best for the project or for you but that are at odds with various standards. In this chapter, we will present a number of ethical issues that you may come across in your project stakeholder management and we will explore these in the context of essential characteristics of projects described in Chapter 2. Projects are established to serve another organization, the base organization. The members of the project organization will inevitably develop detailed knowledge about the project to which members of the base organization do not have access. This asymmetric information (Akerlof 1970) means that you and the other members of the project organization will be in a position in which you may keep information hidden from the base organization and at times this might be to that organization’s detriment. This is called the principal–agent problem (Rees 1985a, 1985b, Eisenhardt 1989). The ethical touchstone in this situation is that you should keep in mind at all times that the project is established to serve your base organization. You should give this particular focus at any stage when the interests of the base organization appear to conflict with the interests of the members of the project organization. For example, you and your project team members may learn that a competitor is almost ready to introduce a product to market making the product currently under development by your project team obsolete. Arguably, it would be better for your base organization to terminate the project immediately

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and allocate financial and non-financial resources to other activities or projects. However, you and your project team members may enjoy the technical challenge of this particular product development and be tempted to delay passing on the information about the competitor for as long as possible. Your ethical dilemma may be further complicated if the information you receive is open to interpretation. This could be the case if you can rationalize to yourselves that the information was unsubstantiated rumour or that the launch of the product might not entirely undermine the commercial basis for the product on which you are working. The same holds true when the project is threatened by sudden, perhaps unanticipated, risks. It can be tempting for project managers and their project teams to withhold these risks from the project owner and the steering committee to prevent them from withdrawing resources from the project. You are faced with this ethical dilemma because clearly you cannot burden your resource providers by communicating ALL risks related to the project. On the other hand, if knowledge about the risks would have altered their decisions, not offering this information is problematic. In a case like this project teams may be so focused on providing solutions and not problems that they may be tempted to delay disclosure in the hope that a solution can be found. Projects are temporary and unique endeavours. This raises an ethical issue because you may find yourself tempted to deal with your stakeholders in ways that optimize your short-term benefits which may run counter to their needs. In addition, a short-sighted attitude to stakeholders may be harmful to your base organization in the long run or to other project stakeholders for example in terms of corporate social responsibility (CSR) or sustainability issues. Lack of motivation to ensure proper knowledge transfer to other projects may also be an unwelcome result of the project’s temporary nature and uniqueness. You and your team members will be put under considerable ethical pressure if it is clear that project management success is based solely on the fulfillment of the classical constraints – time, budget, specification – and realize that no one seems to care about the possible negative side effects of the project: the impact on the long-term relationships with the stakeholders, the long-term interests of the base organization and knowledge transfer to other projects. The dilemma arises because the long-term and broader concerns may hinder your project progress and you may be tempted to ignore them. To prevent short-termism and an overly narrow focus on project management success, we suggest that you encourage that the long-term issues are included in the project success criteria. As mentioned repeatedly throughout this book, an essential characteristic of projects is that they depend on a number of negotiations between the members of the project organization and the various project stakeholders. In projects, typically there are shared as well as conflicting interests among the stakeholders and even between the various stakeholders and the project itself. In Chapter 5 we explained the difference between a collaborative approach and a power-

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based approach. A purely power-based approach, taking advantage of a powerful position at the expense of a stakeholder, involves ethical considerations. A powerbased approach in which you force or manipulate the stakeholders to comply with your preferences, when you know or suspect that this is harmful to them, runs counter to contemporary standards for doing business, especially if you consider CSR or sustainability. The power-based approach, however, can be ethically appropriate if you know (or think you know) that your behaviour is in the interest of the stakeholder because the reason why you push your solution through is that you have more insights than the stakeholder on the issues in question. It may also be that immediate urgency of action is required and precludes the time for a collaborative approach. Clearly, the ethically correct way to manage stakeholders is to facilitate your project to ensure that ideally all project stakeholders will benefit from the project. You are looking for win–win situations. You may be skeptical and argue that this is not always possible – that some projects unavoidably will involve stakeholders who benefit and stakeholders who are disadvantaged. This is sometimes the case for large construction projects where neighbors and landowners object to a project which may damage their view of the surrounding landscape or because they are forced to sell off their land to make space for a new building. Even though we acknowledge the truth in this, we want to put forward that, according to contemporary stakeholder theory, you should always put significant efforts into searching for mutual benefits as well as for ways to support the project so that all stakeholders feel that they are better off with the project than without it. In other words, your focus should be on determining the joint interests and the win– win situations for all stakeholders. All stakeholders have legitimate interests that should be met and no project should favour the benefits of certain stakeholders at the expense of disbenefits of others, where this clearly is disproportionate. This means that you need to consider the impacts of all activities and decisions related to each of the project stakeholders. At the same time, you must be aware that tradeoffs, typically between stakeholders, are inevitable, and that they should be dealt with and preferably agreed on in a conscious and considered way. Creating benefits for as many stakeholders as possible without damaging the interests of other stakeholders involves ethical dilemmas. On occasion you will find yourself in a situation in which two or more equally important stakeholders have competing claims or wishes. One of these stakeholders may need management attention because he or she is powerful. Another stakeholder may have been classified as needing attention on the basis of an urgent need for the project deliverables. You may then find yourself in a situation where it is up to you to decide which stakeholder is the more in need of attention – the one who may be able to harm the project or the one who will benefit from getting the project deliverables on time. There is no easy solution to this. You may be bestadvised to get the stakeholders together and invite them to make trade-offs so

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that they can figure out the least damaging solution themselves. You may also investigate alternative solutions that might offer a win–win or at least not a fully win–lose situation. It is sensible to spend resources trying on this as a clear win– lose outcome may harm the perception of fairness in the project process and thus discourage some stakeholders from delivering their contribution. The situation can be especially problematic if the stakeholders are part of a network which gives them the opportunity to share experiences – good as well as bad. The more you are able to establish common ground and keep an open mind, the more you will be able to grasp the requirements, wishes, concerns and attitudes of the stakeholders during the project course so that you can act to make the stakeholders contribute as needed and at the same time seek to take care of their interests. You should interact with the stakeholders through all phases of the project in order to sustain commitment and create the expected benefits. In a fast-changing world, new decisions and alignment of expectations along the way are typically a major part of the management of stakeholders; decisions made at one point may quickly become non-suitable due to changing conditions. These changes can be disadvantageous but they can also create the basis for new opportunities. Projects have multiple success criteria. In Chapter 2 we differentiated between project management success and project product success. The project manager is hired to deliver projects as quickly, cost-effectively and smoothly as possible, thus pursuing project management success. Project product success as well as any long-term side effects from the project can only be assessed when the project organization has been terminated. Further, the project product success is in the project management literature mainly seen from the perspective of the base organization (for example, Andersen 2008) – with little, if any, consideration of the suppliers or future generations. Because of this we have taken a classical perspective on stakeholder management, using a ‘dominant coalition’ view (Mikkelsen and Riis 2003) where the dominant coalition in project management is the base organization, the project owner, the project steering committee (if such one exists), the project manager, and his or her project team. The primary success criterion for the project is to deliver benefits to the base organization. A sub-criterion may be that this should happen while creating as many benefits as possible for the other stakeholders as long as this does not hamper the base organization. Creating benefits for the base organization does not necessarily implicate harming other people or organizations, and ethical conduct would aim to avoid this. Additional dilemmas relate to the calculated behaviour towards others that is inherent in project stakeholder management. According to the guidelines presented in Chapter 5, you should plan your behaviour towards other people based on

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a rational calculation of the best outcome from the time and effort invested in building the relationship. This means that you engage in communication with the stakeholders with a specific purpose in mind. The communication is planned in terms of the time spent on each stakeholder as well as the information revealed to each stakeholder. This is also true of conversations you may have to reveal stakeholder expectations and aspirations of the project. If you do all this under pretence of creating personal relationships, and the stakeholders discover that in reality the aim was to influence or even manipulate them, then it may be devastating for your credibility, making it hard to communicate freely with the same stakeholders at another time. Therefore it is probably best to be open about it if a meeting or conversation is designed to generate information or to promote the project. On the other hand, such openness can lead to a stakeholder opting for the highest possible gain, particularly if he or she doubts your ability to be fair. Another characteristic of projects is that project stakeholders have their own stakeholders. This introduces two ethical issues. The first relates to whether you put pressure on your stakeholders in such a way that they cannot take proper care of their own stakeholders, for example their employees or suppliers. This is a grey area because you may argue that each stakeholder is responsible for his or her own stakeholders. On the other hand, abusing a power relationship is not ethical. The second issue concerns the situation in which your stakeholder is behaving unethically, for example by ignoring human rights, perhaps by using child labour. In such a case, you need to consider whether you will sustain your relationship with that stakeholder, try to make the stakeholder change his or her behaviour or terminate the relationship. Figure 6.1 summarizes the various ethical issues. You need to consider carefully • • • • • •

Figure 6.1

Serving the base organization vs. serving the project organization when they do not have common interests. Serving the base organization vs. serving legitimate stakeholder claims not in the interest of the base organization. Stakeholders with conflicting interests. Optimizing in the short run vs. laying the ground for good results in the future. Calculated behavior vs. altruistic contacts. Whether to sustain a relationship to a stakeholder who behaves unethical towards the stakeholder’s own stakeholders.

Ethical issues in project stakeholder management

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Chapter 7

Easy to Understand, Difficult to Master

Even though the concept of project stakeholder management may be easy to understand, our experience is that most people find it rather difficult to master in practice. Ethical considerations such as trade-offs between stakeholders are not the only challenge you will encounter in carrying out project management. You may also face challenges when trying to allocate your own time between planning ahead and solving the problems that will arise along the way, regardless of how thorough the original planning has been. If too much time is spent on planning there will be no resources left for the daily tasks. On the other hand, if plans are not made on a proper basis and revised along the way, there will be too many daily problems to solve. You can easily be torn in a dilemma between spending time doing in-depth analysis and planning and the need to get the project rolling. Accordingly, you will, to some extent, need to rely on intuition and superficial analysis. To keep costs in time and money within reasonable levels you should carefully consider which stakeholders are sufficiently important to warrant spending time gathering information concerning expectations and concerns. You may also decide to make a detailed analysis of only those stakeholders that are important in the early stages of the process and postpone preparing a detailed register for additional stakeholders until they become important. Also the process of generating inputs for the stakeholder analysis can be quite challenging. Information can only be gathered if it exists. The stakeholders can only share their requirements, wishes and concerns if they are aware of them and willing and able to articulate them when asked. This means that sometimes important information about stakeholders cannot be revealed through the techniques recommended for the stakeholder analysis. Workshops, interviews and other forms of information sharing may help stakeholders become aware of their thoughts regarding the project. You may find inspiration for how to conduct such information sharing in the techniques presented for creation of input for the stakeholder assessment. Also, think about that questions asked in an interview or a conversation about a topic may trigger the interviewee to reflect on the topic in question, and he or she will be able to answer the question in a later follow-up interview (Jepsen and Eskerod 2009).

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Input generation is not the only challenging task. Communication within the project team and with the stakeholders may be complicated by differences in backgrounds and a weak ‘project culture’ if participants have not met before the project starts. There may not be a common vocabulary. Further, acceptable modes of conduct are often not dictated by company culture but must be established at the beginning of the project. In addition, the stakeholders may have different perceptions of value in terms of what is regarded as good reasons for spending resources. They may have prejudices against each other and against you and the project team. We tend to form opinions based on generalizations and stereotypes (Schiffman and Kanuk 2009). For example, a designer may have a certain opinion about engineers and vice versa. Therefore, the two groups of stakeholders may not see the ‘real people’ behind the role and do not really listen to what the other group says. The insights and tools presented in this book give advice on elements to cover in stakeholder management planning. There are, however, challenges in using the guidelines, especially in terms of identification of the stakeholders and discovery of their expectations of the benefits that they will expect in exchange for their contribution. It can also be difficult to distinguish important stakeholders from not-so-important stakeholders. To accomplish these tasks, you need to undertake desk and field research. This is time consuming and it is challenging to approach and interview important stakeholders to learn the kind and level of attention that they need. Stakeholder analysis and planning should be an iterative process rather than simply a one-off task carried out mainly as a desk research at the front-end of the project. Project stakeholder management takes place across the entire life cycle of the project. The life cycle may be different in various project types. In some projects it may be impossible and even catastrophic to attempt to settle for a fixed project stakeholder plan at an early stage because there are so many unknown factors. This makes it important to validate and, where possible, update the plan during the project execution phase. The plan is a document based on interpretations of the stakeholders and the project made at a certain point in time. It should, therefore, not be treated as a static entity or ‘universal truth’. Project success is multidimensional. This creates a challenge in terms of the softer criteria for project success. These may be difficult to reconcile as many of the expected exchanges between the project manager and the stakeholders may not be explicit – for example in the case of process-related issues, that is how the stakeholder prefers that the communication takes place, or with which member of the project organization the stakeholder would prefer to deal. A stakeholder may find it inappropriate to communicate through a young and inexperienced project team member instead of the project manager or even the project owner. Formal contracts (if they exist at all) and project documents, such as the project charter, typically only include some of the expected exchanges within the project.

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The personal and organizational expectations which stakeholders have are often unarticulated and sometimes the stakeholders are not even consciously aware of these additional expectations. In addition they may change during the project’s life cycle. Further, it is likely that the members of the project organization and the other stakeholders will meet again in the future. And, indeed, some of the stakeholders may have met during earlier projects, potentially easing the job for you. This potential to collaborate more than once leads to a suggestion that project managers should take a relationship approach to stakeholder management rather than a transactional approach which focuses on optimization within the present project. Taking a relationship approach still requires you to keep focus on the success of the project at hand but equally to consider the positive and negative effects of your decisions on future relationships with the stakeholders. You need to reflect on the importance of each stakeholder now and in the future and that also intangible outcomes, for example loss of trust and damaged esteem, can have an impact. To some people, these personal, intangible outcomes may be more important for future relationships than the optimal delivery of all the project deliverables. In spite of the challenges in planning stakeholder management efforts, we think that the proactive project manager should see the analysis and planning as more than simply resource-demanding activities. They represent an ongoing learning process and an opportunity to engage in dialogue with the stakeholders to gather their thoughts about the project at an early stage. By choosing this perspective for stakeholder management we think that stakeholder analysis and planning can make a great contribution to the success of any project. We hope that the guidelines presented in this book will provide a good conceptual framework for doing so. In summary, stakeholder management is by no means a ‘hard science’ with causeand-effect relations and we have not tried to give clear cut answers on how to manage stakeholders in all situations. We hope that this book and the insights and tools it offers will be beneficial for you – not least as an opportunity to become aware of your own potentially unconscious assumptions of how to deal with your project stakeholders.

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mini cases

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case 1

the new design concept

A project organization was established to develop a new design concept for marketing materials for study programmes at a university. The project scope was clearly defined and the project was managed very professionally and in line with common project management practices. During the project process, it was decided that the marketing materials should be produced using an alternative type of software from the originally planned in order to enable a more distinctive design. This did not influence the main task of the project team which was to develop a new design concept as well as to seek approval for the concept from various decision makers. However, the project manager realized that no decisions had been made on who would use the new software or how to train them. While these decisions were clearly outside the defined project scope, it was imperative for project success that decisions were made and action taken by someone to address this oversight. If not it would be impossible to generate the stipulated benefits since no one at the university would be able to use the software. The project manager discussed the situation with the project owner who was also in charge of HR development at the university. They agreed that the university should appoint a team to operate the software on a permanent basis while the HR department should develop and offer a training course in the software. The tasks were still seen as outside the responsibilities of the project team. But the project scope was extended to include a dialogue with these stakeholders about operating the software and training the users so that the stakeholders were able to undertake these new tasks. The project owner acted as a spokesperson in this situation as she had best access to the HR development department and the heads of the faculties.

Case Analysis The case example illustrates a situation in which the project manager and the project team successfully managed the project – meaning that they delivered the agreed deliverable, a new design concept approved by the relevant decision makers, on

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time and within budget. However, they overlooked in their planning the fact that choosing software that was not familiar to the employees who were going to work with the marketing materials had implications for the project product success. The employees would not be able to use the design concept without proper training in the new software and, as a result, the stipulated benefits would not be generated. It also became clear that new project stakeholders, for example the HR department, needed to be involved in order to obtain the benefits. Some of the additional tasks were best taken care of by organizational units outside the project organization, for example the head of the faculties and the HR department.

case 2

the textbook

The author (the stakeholder) of a well-known, self-published, text book in project management had engaged a new printing company to print the ninth version of his book. Agreements on specifications, budget and deadlines were stated in a contract and everything seemed fine. A characteristic of the previous versions of the book was that the second half of the book was printed on yellow paper to emphasize that this part of the text represented appendices containing project management tools. This design was also chosen for this new edition. However, the printing company’s supplier could not deliver yellow paper in time and the author was not informed about the problem. Shortly before the agreed deadline for the book’s delivery, the author received a message from the printing company saying that the book would be delayed due to the lack of supply of yellow paper. As a result the book was not available in book stores for the start of the semester – resulting in many frustrated students and professors, less revenue from the book sale and the risk that the book would not be included on book lists for the subsequent year. The author was very unhappy about the situation. ‘Had they just contacted me,’ he said, ‘then I would have told them to print the appendices on white paper. To have the text book delivered in time for the semester start was my highest priority.’

Case Analysis The case example shows a situation in which a number of issues were not properly taken care of by the project manager when an unexpected event (the absence of yellow paper) occurred: (1) The author (the stakeholder) felt that he was not properly informed about the lack of supply. Neither was he involved in the tradeoff decision between time (the promised deadline) and specification (the white and yellow pages), which related to his perception of procedural fairness. (2) The author had delivered text books to students and professors for many years. He felt it was damaging to his reputation as a reliable book supplier that the book was not available in the book stores when needed. (3) The project manager did not consider the core interests of the stakeholder’s stakeholders: the book stores, the students and the professors. (4) When the project manager was faced with the need

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for a trade-off between time and specification, he opted for the solution (delaying delivery) that best suited him personally (if he considered the alternatives at all), without asking the stakeholder about his priorities. To sum up: An unexpected event occurred and the project manager had to choose a change response. By not considering the stakeholder’s preferences in terms of trade-offs between various requirements the project manager failed to minimize the negative consequences. Instead the response he chose made the situation much worse.

case 3

the copenhagen elephant parade

Copenhagen Elephant Parade was an Art Business & Charity (ABC) project that took place in Denmark in 2011. The project was part of an international effort to collect money to preserve the Asian elephants, initiated by people in the Netherlands and consisting of ABC projects in many big cities all over the world, including London and Tokyo. The basic idea for each elephant parade project was that prominent national and international artists were invited to paint or otherwise decorate fiberglass baby elephants. The elephants were exhibited publicly in parks and streets for a couple of months – and afterwards auctioned off. Of the auctioned sum, 15 per cent went to the artists and the rest to help the Asian elephants, providing funding to establish and maintain elephant hospitals and to buy land for preserving elephant corridors. A number of sponsors for the project were identified. In addition, merchandise in the form of miniature replicas of the elephants as well as books and posters were produced and sold. Copenhagen Elephant Parade turned out to be one of the largest outdoor exhibitions ever held in Denmark. It included 102 baby elephants. The total auctioned sum was Euro 574,349. In the book, Elephant Parade 2011, some of the stakeholders stated why they had decided to contribute to the project: His Royal Highness, the Prince Consort, Patron at Elephant Parade Copenhagen: As president of WWF [World Wide Fund for Nature], my commitment to the wild life conservation incited me … I have a special relationship with elephants from my childhood in Vietnam and from my many travels in Africa and Thailand … as patron of the Copenhagen Zoo … In Asia and Africa the largest animal on land is threatened by man. In addition, Elephant Parade is an important asset for the city of Copenhagen… (p. 5).

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Elephant painting artist: I generally approach what comes my way [as when asked by the Elephant Parade organizers to paint an elephant] with a positive attitude. I think it’s a great project for both the elephants as well as the artists involved (p. 40).

Despite [this other artist’s] initial reluctance, he decided to take part in Elephant Parade in the end: When I was first approached by Elephant Parade’s organisers, I have to admit that I wasn’t thrilled about the idea. In the end though, I was persuaded by my connection to Thailand and the elephants … I see art as a medium for creating awareness for the wrongs in the world. I really hope that the Copenhagen edition of Elephant Parade initiates a movement that will help the elephants (p. 83).

[A third artist] is part of Elephant Parade, because the project has a history and a strong purpose. He is impressed by how big the project has ended up being and congratulates it for being very professionally run. He is confident that Elephant Parade will be welcomed by Copenhagen and its residents and visitors, and is happy to be part of such a great project (p. 143). A fourth Elephant painting artist: The more information we get, the more qualified decisions we are able to make. That’s why Elephant Parade is such a cool initiative; apart from gathering money for a threatened species, Elephant Parade uses art/culture to highlight some of the biological challenges that our world is facing. It’s a funny and very direct way of reaching out to the public. At the same time I think it adds relevance to art, which sometimes has a tendency to be more decoration, rather than being a comment to the society we are living in (p. 165).

Further, a fifth elephant painting artist stated: So I would like to dedicate 1,000 hours to … this important purpose (p. 26).

Case Analysis The statements highlight many of the reasons for stakeholder contribution to a project. His Royal Highness, the Prince Consort of Denmark, argues that he already has other roles (president of WWF and patron of the Copenhagen Zoo) which make it obvious that he should take on the role as patron of the parade and also paint a baby elephant himself. This is an example of the logic of appropriateness, answering the question ‘what would someone like me do in a situation like this?’ as he relates the request for contribution to other related roles he already fulfils.

the copenhagen elephant parade

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His Royal Highness, the Prince Consort of Denmark, also gives reasons related to preserving his social identity: ‘My commitment to the wild life conservation incited me’ and ‘I have a special relationship with elephants from my childhood in Vietnam and from my many travels in Africa and Thailand.’ Further, we interpret that he thinks that the project provides important positive side effects when he states: ‘Elephant Parade is an important asset for the city of Copenhagen.’ This is also part of the reason stated by one of the elephant painting artists: ‘It’s a great project for the elephants as well as the artists involved.’ Another painting artist points to fair project procedures and involvement of the stakeholders when he states that he congratulates the project team for running the project very professionally. Yet another artist is very specific about the amount of resources he will contribute as he states that he will spend 1,000 hours on decorating his elephant – being explicit helps align expectations. Reading the statements from the elephant painting artists we find it striking that even though many artists are asked for the same non-complex contribution: ‘Will you decorate a baby elephant for the Copenhagen Elephant Parade?’ they have very different, personal reasons for committing themselves. This stresses the importance of investigating each single stakeholder’s motivations to contribute as well as expectations he or she may have to the results of contributing. You can find more details of this case at: http://elephantparade.com/

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case 4

the formal partnership process

In order to set initial expectations and later conduct frequent evaluations of the cooperation with each of its partners, the medium-sized company Air-Tech has established a formal process for explaining and aligning expectations as well as doing follow-ups on the cooperation. These processes are as follows: • Partnership start-up. –– Air-Tech and partner agree on five value parameters. –– Air-Tech and partner agree on the relative importance of the parameters (scale 1–5, where 5 is the highest). • Partnership evaluation. –– Partner rates the value parameters (scale 1–5, 5 is highest). –– Air-Tech and partner discuss partnership on the basis of the rating. –– Air-Tech and partner agree on improvement actions. Examples of value parameters: delivery time, price, flexibility, technical knowledge, ability to challenge and communication. Air-Tech has developed a one-page Partnership Evaluation Form to document and store the results of the processes. The purpose is stated on the form: ‘To secure initial expectation setting between partners and frequent evaluation of partnership in order to maximize partners’ mutual benefit of the partnership.’ A contact person from both Air-Tech and the partner is assigned. The form records the date of expectation setting as well as the date of the partnership evaluation.

Case Analysis By defining a formal process for expectation alignment and follow-up with its partners, Air-Tech acknowledges that to be successful in stakeholder management, it is important to be explicit about priorities when trade-offs are necessary. Keeping the price low and remaining flexible throughout the project may represent conflicting aims. Therefore it is important that the partners state what they value the most in a trade-off situation. By doing frequent follow-ups and asking each

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stakeholder to evaluate the degree of fulfillment on the chosen parameters, AirTech acknowledges that it is the stakeholder who is the ‘judge’ when it comes to assessing the project’s accomplishments as well as Air-Tech’s ability and willingness to do what has been agreed. Air-Tech on the other hand is supported by the fact that the partner can only choose five value parameters and that these are documented. This helps keep the project organization focused and on track in a situation characterized by many choices and the need for many decisions along the way. The requirement for an appointed contact person at Air-Tech as well as within the partner organization shows acknowledgement of the one point of contact concept.

the formal partnership process

Figure C4.1 Partnership Evaluation Form

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index

attitude 19, 43 change 51 strength 21 Attitude-Information Grid 36 base organization 5, 8 culture 9, 25 beliefs 18 benefits 5 expected 20 classical conditioning 56 commitment 26 communication asynchronous vs. synchronous 63 changing negative attitude 54 how 56 interpersonal vs. impersonal 57 level 63 project phases 64 pull 61 push vs. pull 57 what 53 when 62 who 54 concerns 20 determining 30 conflict management tactics 66 consequences 18, 20 alignment of expectations 21 contribution 6, 8 determining 44 cost 8, 20 expected 20 social 20 credibility 54 data assessment 37 methods 38 survey 41

workshop techniques 39 disbenefits 5 expected 20 Elaboration Likelihood Model (ELM) 56 direct route to persuasion 56 peripheral route to persuasion 56 ethics 71 calculated behaviour 74 dilemma base organization 71 dilemma short-term vs. long term 72 dilemma use of power 72-3 ethical behaviour 71 project value for whom? 74 when win-win is difficult 73 expectations 18 alignment 48 implicit 21 unconscious 21 fairness 22–3 assessment over time 23 gift giving 24 harm potential 6, 31, 43 assessment 31 reduce 52 help potential 6, 31, 43 activate 52 assessment 31 identity preservation 22 impersonal communication 57–8 push 58 targeting 60 influential communicator 54 intentional behaviour 19 interest base 34

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interpersonal communication 60 interviews 38 group 39 issue specificity 27, 32 Key Player 43 legitimacy 44 logic of appropriateness 22 consequentiality 18 Marginal Stakeholder 43 media richness 59 MoSCoW 40 negotiations 12 operant conditioning 56 opinion leader 55, 62 organization base 5 temporary 9 perceived behavioural control 19, 25 perception 18 power base 34 power of choice 17 PR/Public Relations 59 project 5, 8 deliverables 5, 8 investment life cycle 9 life cycle 9 manager 3, 6 organization 6, 8 outcomes 5, 8 owner 6 roles 6 scope 12 stakeholder management 3, 7 success criteria 12–3 team members 6 project management success 13 project phases 9–10 communication 64 project product success 13 project stakeholder 1 home organization 12 network 12 own stakeholder 12 Project Stakeholder Potential and Attitude Cube 43

Elaboration Likelihood Model 56 Moving stakeholders 50 Sustaining position 51 Project Stakeholder Potential Graph 43 Project Stakeholder Potential Matrix 33 project success 13 reactive stakeholder management tactics 65 reciprocal relationship 24 requirements 20 determining 30 Resourceful Stakeholder 43 resources 31 response tactics 65 role mode 55 Scenario Developments 33, 40 self-interest 17 Show Stopper 43 side effects 5 sorting techniques 40 spokesperson 55 stakeholder 3 analysis 7, 8, 27, 28 assessment 28, 30 disaggregation 6 grouping 29 identification 7, 28 management 7, 8 non-personal 29 prioritization 7, 27, 28 Stakeholder Commitment Matrix 35–6 stakeholder management dynamics 66 follow-up plan 67 stakeholder management approaches collaborative 49 power-based 49 stakeholder management plan 48 elements 68 issues to consider 70 stakeholder management planning 48–9 proactive versus reactive strategy 48 proactive tactics 49 reactive tactics 65 Stakeholder Management Table 70 Stakeholder Management Web 33 Stakeholder Power-Interest Grid 41–2

Index

Stakeholder Register 28, 31, 35 subjective norm 19, 22 success criteria 13 Theory of Planned Behaviour 19 traffic light colouring 43

urgency 44 uniqueness 11 win-win situations 41 wishes 20 determining 30 workshop 41

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Advances in Project Management Advances in Project Management provides short, state of play, guides to the main aspects of the new emerging applications including: maturity models, agile projects, extreme projects, six sigma and projects, human factors and leadership in projects, project governance, value management, virtual teams, project benefits.

Currently Published Titles Customer-Centric Project Management Elizabeth Harrin and Phil Peplow 978-1-4094-4312-4 Managing Project Uncertainty David Cleden 978-0-566-08840-7 Managing Project Supply Chains Ron Basu 978-1-4094-2515-1 Managing Quality in Projects Ron Basu 978-1-4094-4092-5 Project Ethics Haukur Ingi Jonasson and Helgi Thor Ingason 978-1-4094-1096-6 Project-Oriented Leadership Ralf Müller and J Rodney Turner 978-0-566-08923-7 Strategic Project Risk Appraisal and Management Elaine Harris 978-0-566-08848-3 The Spirit of Project Management Judi Neal and Alan Harpham 978-1-4094-0959-5 Sustainability in Project Management Gilbert Silvius, Jasper van den Brink, Ron Schipper, Adri Köhler and Julia Planko 978-1-4094-3169-5 Second Order Project Management Michael Cavanagh 978-1-4094-1094-2 Tame, Messy and Wicked Risk Leadership David Hancock 978-0-566-09242-8

Reviews of the Series Managing Project Uncertainty, David Cleden ‘This is a must-read book for anyone involved in project management. The author’s carefully crafted work meets all my “4Cs” review criteria. The book is clear, cogent, concise and complete... it is a brave author who essays to write about managing project uncertainty in a text extending to only 117 pages (soft-cover version). In my opinion, David Cleden succeeds brilliantly...For project managers this book, far from being a short-lived stress anodyne, will provide a confidence-boosting tonic. Project uncertainty? Bring it on, I say!’. International Journal of Managing Projects in Business ‘Uncertainty is an inevitable aspect of most projects, but even the most proficient project manager struggles to successfully contain it. Many projects overrun and consume more funds than were originally budgeted, often leading to unplanned expense and outright programme failure. David examines how uncertainty occurs and provides management strategies that the user can put to immediate use on their own project work. He also provides a series of pre-emptive uncertainty and risk avoidance strategies that should be the cornerstone of any planning exercise for all personnel involved in project work. I have been delivering both large and small projects and programmes in the public and private sector since 1989. I wish this book had been available when I began my career in project work. I strongly commend this book to all project professionals.’ Lee Hendricks, Sales & Marketing Director, SunGard Public Sector ‘The book under review is an excellent presentation of a comprehensive set of explorations about uncertainty (its recognition) in the context of projects. It does a good job of all along reinforcing the difference between risk (known unknowns) management and managing uncertainty (unknown unknowns – “bolt from the blue”). The author lucidly presents a variety of frameworks/models so that the reader easily grasps the varied forms in which uncertainty presents itself in the context of projects.’ VISION-The Journal of Business Perspective (India) ‘Cleden will leave you with a sound understanding about the traits, tendencies, timing and tenacity of uncertainty in projects. He is also adept at identifying certain methods that try to contain the uncertainty, and why some prove more successful than others. Those who expect risk management to be the be-all, end-all for uncertainty solutions will be in for a rude awakening.’ Brad Egeland, Project Management Tips

Project-Oriented Leadership, Rodney Turner and Ralf Müller ‘Müller and Turner have compiled a terrific “ready-reckoner” that all project managers would benefit from reading and reflecting upon to challenge their performance. The authors have condensed considerable experience and research from a wide variety of professional disciplines, to provide a robust digest that highlights the significance of leadership capabilities for effective delivery of project outcomes. One of the big advantages of this book is the richness of the content and the natural flow of their argument throughout such a short book....Good advice, well explained and backed up

with a body of evidence... I will be recommending the book to colleagues who are in project leader and manager roles and to students who are considering these as part of their development or career path.’ Arthur Shelley, RMIT University, Melbourne, Australia, International Journal of Managing Projects in Business ‘In a remarkably succinct 89 pages, Müller and Turner review an astonishing depth of evidence, supported by their own (published) research which challenges many of the commonly held assumptions not only about project management, but about what makes for successful leaders. This book is clearly written more for the project-manager type personality than for the natural leader. Concision, evidence and analysis are the main characteristics of the writing style...it is massively authoritative, and so carefully written that a couple of hours spent in its 89 pages may pay huge dividends compared to the more expansive, easy reading style of other management books.’ Mike Turner, Director of Communications for NHS Warwickshire

Strategic Project Risk Appraisal and Management, Elaine Harris ‘...Elaine Harris’s volume is timely. In a world of books by “instant experts” it’s pleasing to read something by someone who clearly knows their onions, and has a passion for the subject...In summary, this is a thorough and engaging book.’ Chris Morgan, Head of Business Assurance for Select Plant Hire, Quality World ‘As soon as I met Elaine I realised that we both shared a passion to better understand the inherent risk in any project, be that capital investment, expansion capital or expansion of assets. What is seldom analysed are the components of knowledge necessary to make a good judgement, the impact of our own predjudices in relation to projects or for that matter the cultural elements within an organisation which impact upon the decision making process. Elaine created a system to break this down and give reasons and logic to both the process and the human interaction necessary to improve the chances of success. Adopting her recommendations will improve teamwork and outcomes for your company.’ Edward Roderick Hon LLD, Former CEO Christian Salvesen Plc

Tame, Messy and Wicked Risk Leadership, David Hancock ‘This book takes project risk management firmly onto a higher and wider plane. We thought we knew what project risk management was and what it could do. David Hancock shows us a great deal more of both. David Hancock has probably read more about risk management than almost anybody else, he has almost certainly thought about it as much as anybody else and he has quite certainly learnt from doing it on very difficult projects as much as anybody else. His book draws fully on all three components. For a book which tackles a complex subject with breadth, insight and novelty – its remarkable that it is also a really good read. I could go on!’ Dr Martin Barnes CBE FREng, President, The Association for Project Management ‘This compact and thought provoking description of risk management will be useful to anybody with responsibilities for projects, programmes or businesses. It hits the nail on the head in so many ways, for example by pointing out that risk management can

easily drift into a check-list mindset, driven by the production of registers of numerous occurrences characterised by the Risk = Probablity x Consequence equation. David Hancock points out that real life is much more complicated, with the heart of the problem lying in people, so that real life resembles poker rather than roulette. He also points out that while the important thing is to solve the right problem, many real life issues cannot be readily described in a definitive statement of the problem. There are often interrelated individual problems with surrounding social issues and he describes these real life situations as ‘Wicked Messes’. Unusual terminology, but definitely worth the read, as much for the overall problem description as for the recommended strategies for getting to grips with real life risk management. I have no hesitation in recommending this book.’ Sir Robert Walmsley KCB FREng, Chairman of the Board of the Major Projects Association ‘In highlighting the complexity of many of today’s problems and defining them as tame, messy or wicked, David Hancock brings a new perspective to the risk issues that we currently face. He challenges risk managers, and particularly those involved in project risk management, to take a much broader approach to the assessment of risk and consider the social, political and behavioural dimensions of each problem, as well as the scientific and engineering aspects with which they are most comfortable. In this way, risks will be viewed more holistically and managed more effectively than at present.’ Dr Lynn T Drennan, Chief Executive Alarm, the public risk management association

Sustainability in Project Management, Gilbert Silvius, Jasper van den Brink, Ron Schipper, Adri Köhler and Julia Planko ‘Sustainability in Project Management thinking and techniques is still in its relatively early days. By the end of this decade it will probably be universal, ubiquitous, fully integrated and expected. This book will be a most valuable guide on this journey for all those interested in the future of projects and how they are managed in a world in peril.’ Tom Taylor dashdot and vice-President of APM ‘Project Managers are faced with lots of intersections. The intersection of projects and risk, projects and people, projects and constraints… Sustainability in Projects and Project Management is a compelling, in-depth treatment of a most important intersection: the intersection of project management and sustainability. With detailed background building to practical checklists and a call to action, this book is a mustread for anyone interested in truly implementing sustainability, project manager or not.’ Rich Maltzman, PMP, Co-Founder, EarthPM, LLC, and co-author of Green Project Management, Cleland Literature Award Winner of 2011 ‘Great book! Based on a thorough review on existing relevant models and concepts the authors provide guidance for different stakeholders such as Project Managers and Project Office Managers to consider sustainability principles on projects. The book gets you started on sustainability in project context!’ Martina Huemann, WU-Vienna University of Economics and Business, Vienna, Austria

‘While sustainability and green business have been around a while, this book is truly a “call to action” to help the project manager, or for that matter, anyone, seize the day and understand sustainability from a project perspective. This book gives real and practical suggestions as to how to fill the sustainability/project gap within your organization. I particularly liked the relationship between sustainability and “professionalism and ethics”, a connection that needs to be kept in the forefront.’ David Shirley, PMP, Co-Founder, EarthPM, LLC, and co-author of Green Project Management, Cleland Literature Award Winner of 2011 ‘It is high time that quality corporate citizenship takes its place outside the corporate board room. This excellent work, which places the effort needed to secure sustainability for everything we do right where the rubber hits the road – our projects – has been long overdue. Thank you Gilbert, Jasper, Ron, Adri and Julia for doing just that! I salute you.’ Jaycee Krüger, member of ISO/TC258 a technical committee for the creation of standards in Project, Program and Portfolio Management, and chair of SABS/ TC258, the South African mirror committee of ISO/TC258 ‘Sustainability is no passing fad. It is the moral obligation that we all face in ensuring the future of human generations to come. The need to show stewardship and act as sustainability change agents has never been greater. As project managers we are at the forefront of influencing the direction of our projects and our organisations. Sustainability in Project Management offers illuminating insights into the concept of sustainability and its application to project management. It is a must read for any modern project manager.’ Dr Neveen Moussa, Project Manager, Adjunct Professor of Project Management and past president of the Australian Institute of Project Management

About the Editor Professor Darren Dalcher is founder and Director of the National Centre for Project Management, a Professor of Project Management at the University of Hertfordshire and Visiting Professor of Computer Science at the University of Iceland. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD from King’s College, University of London. In 1992, he founded and chaired of the Forensics Working Group of the IEEE Technical Committee on the Engineering of Computer-Based Systems, an international group of academic and industrial participants formed to share information and develop expertise in project and system failure and recovery. He is active in numerous international committees, standards bodies, steering groups, and editorial boards. He is heavily involved in organising international conferences, and has delivered many international keynote addresses and tutorials. He has written over 150 refereed papers and book chapters on project management and software engineering. He is Editor-in-Chief of the International Journal of Software Maintenance and Evolution, and of the Journal of Software: Evolution and Process. He is the editor of a major new book series, Advances in Project Management, published by Gower Publishing which synthesises leading edge knowledge, skills, insights and reflections in project and programme management and of a new companion series, Fundamentals of Project Management, which provides the essential grounding in key areas of project management. He has built a reputation as leader and innovator in the area of practice-based education and reflection in project management and has worked with many major industrial, commercial and charitable organisations and government bodies. In 2008 he was named by the Association for Project Management as one of the top 10 influential experts in project management and has also been voted Project Magazine’s Academic of the Year for his contribution in ‘integrating and weaving academic work with practice’. He has been chairman of the APM Project Management Conference since 2009, setting consecutive attendance records and bringing together the most influential speakers. He received international recognition in 2009 with appointment as a member of the PMForum International Academic Advisory Council, which features leading academics from some of the world’s top universities and academic institutions. The Council showcases accomplished researchers, influential educators shaping the next generation of project managers and recognised authorities on modern project management. In October 2011 he was awarded a prestigious Honorary Fellowship from the Association for Project Management for outstanding contribution to project management. He has delivered lectures and courses in many international institutions, including King’s College London, Cranfield Business School, ESC Lille, Iceland University, University of Southern Denmark, and George Washington University. His research interests include project success and failure; maturity and capability; ethics; process improvement; agile project management; systems and software engineering; project benchmarking; risk management; decision making; chaos and complexity; project leadership; change management; knowledge management; evidence-based and reflective practice.

Professor Dalcher is an Honorary Fellow of the Association for Project Management, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute, the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland Project Management Award; of the APM Group Ethics and Standards Governance Board, and, until recently; of the APM Professional Development Board. He is a member of the OGC’s International Reference Group for Managing Successful Programmes; and Academic and Editorial Advisory Council Member for PM Today, for which he also writes a regular column featuring advances in research and practice in project management. National Centre for Project Management University of Hertfordshire MacLaurin Building 4 Bishops Square Hatfield, Herts. AL10 9NE Email: [email protected]