A stakeholder is any person connected with a project or business interested in the collaboration's success. They may work for the company or organization or benefit from their products and services. Therefore, the stakeholders' group includes employees and managers, but also the owner of the business and shareholders, investors, customers, suppliers, resellers, and distributors.
In project management, stakeholders are the persons with an interest in the project's outcome. The project's team is obviously the first of the stakeholders, but the category also includes investors, executive managers, suppliers, and users. You can also have collaborators, people who work for the project without being hired by the company, such as counselors, advisers, volunteers, and interns.
Stakeholder management means managing all the stakeholders involved in a project and ensuring good communication and collaboration between them. It takes a lot of time and energy and is vital for your project's development. Stakeholder management starts and ends simultaneously as the project and is an ongoing activity for the entire project's timeline.
Stakeholders can be split into two categories: internal and external.
Internal stakeholders have a clear connection with the project and will continue to have one even after the project is over. The category includes employees and managers, long-term collaborators, consultants and subcontractors, regular investors, and shareholders. They are the people you work with regularly.
External stakeholders are people who don't have a permanent or long-term connection with the project but are still interested in its outcome. The category includes customers, focus group testers, project-based suppliers, resellers, occasional creditors, and project-based collaborators, such as a headhunting company recruiting for the project.
Each project is different and can involve a broad range of stakeholders. Based on the two types of stakeholders, the most common people you can work with on a project are:
You need an excellent strategy to manage such large and diverse groups of people. Stakeholders may have different backgrounds and social statuses, come from different cultures, and have different interests in the project. To maintain transparency, communication, and collaboration, you must identify them before the project's debut and get to know them. Then, you should find out what each of them expects from the project, how much they are willing to engage, and what motivates them.
Before starting the project, find methodologies for the following aspects of stakeholder management:
You need a stakeholder analysis to manage stakeholders for a particular project. A stakeholder analysis is a thoroughly documented report that includes everything there is to know about the project's stakeholders. Often, the stakeholder analysis is done just after the project's planning, when you know exactly the goal of the project and what people will be involved. Here are the steps for creating a stakeholder analysis:
Step 1: List Your Stakeholders
Check out your project plan and list all internal and external stakeholders contributing to the project. Some roles will be very clear from the beginning, but others will be clarified during the project. Anyway, usually, you can anticipate pretty well from the start. So, even if you don't know exactly who will do a particular task (e.g., labor legislation consulting), you may need someone to do that task.
Step 2: Add Priorities to Your List of Stakeholders
Not all stakeholders have the same influence over the project. Internal stakeholders, for example, may request more frequent consultations and updates and may be more involved in the project. External stakeholders usually are less involved and appear later in the project.
Prioritize your list, identify key stakeholders, and order them based on their power over the project and their interest in the project. For example, board members have high power and high interest in the project. A part-time collaborator may have a high interest in working on the project but a low impact of the project's development and no decision power.
Employees, collaborators, resellers, suppliers, subcontractors
Owner of the company, board members, managers
Customers, volunteers, government agencies
Consultants, advisors, labor unions
Step 3: Get to Know Your Stakeholders
Thoroughly document each stakeholder or category of stakeholders. Note their expectations, backgrounds, technical skills, preferred communication methods, and overall commitment to the project. You need to know all these details to ensure everyone is satisfied and motivated. For example, people may have different expectations in terms of project success. Employees may be happy to get their jobs done, while board members may expect a high income. Negative aspects may differ as well. Collaborators may be less upset by a payment delay or a change of schedule than regular employees. Don't leave anything to chance, and ensure you use the right communication and management tools for each category of stakeholders.
Create a stakeholder analysis template to ensure you have everything in focus. An Excel spreadsheet is just what you need because it's adaptable and versatile. If you need more time to do it from scratch, download our free stakeholder analysis template and customize it to fit your project.
All projects depend on the people who are interested in them, whether they are employees or customers. Managing people will always take work. Good organization and professionals with good communication skills are key to managing stakeholders. However, it helps clarify their expectations and knowledge, interest in and power over the project, and preferred decision-making strategies. Knowing who you work with is the best way to make everyone happy.
What is the difference between a stakeholder and a shareholder?
A stakeholder is anyone who has an interest in a project. A shareholder, on the other hand, is a person who owns stocks in the company. A shareholder is an external stakeholder, but it is only one of many. Other people with different relations to the project can be stakeholders. Being a stakeholder doesn't necessarily mean they are a shareholder.
What are the stakeholders in business?
A business is an ongoing project. It has goals, tasks, resources, and people, but it doesn't have a deadline. Stakeholders in business are people with an interest in the business' smooth running. They include employees, owners, customers, and everyone who impacts the business.