Project Stakeholder and Communications Management

1. Master of Project Management (MPM) Degree Programme Project Stakeholder and Communications Management

2. Outline of This Course Module • Stakeholders and Their Relevance for Projects • Typology of Project Stakeholders • The Project Stakeholder Management Process • Role of Communication in Project Management • Factors Influencing Communication in Projects • Types and Mediums of Communication in Projects • The Project Communication Plan • Strategies for Improving Communication in Projects • Communication in Project Teams • Project Meetings • The Project Management Information System • Project Communication and Collaboration Softwares

3. The Project Stakeholders There are many definitions of project stakeholders. Basically, project stakeholders are primarily individuals, groups or communities of individuals and/or organizational entities who, broadly speaking, have – or who believe they have – a „stake“ (interest) in the project or projects which are being undertaken, or which may be undertaken at a future point in time. The PMI defines stakeholders as „individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion“. [Project Management Body of Knowledge, 2004, p.24]

4. The Project Stakeholders Stakeholders must be „managed“ throughout a project so that their ideas and concerns are taken into consideration, they can contribute to the project, they understand the project decisions taken and accept them more readily and they will be project supporters instead of project adversaries Depending on the nature of the project, the stakeholders can, at one extreme, be very small in number and easily identifiable, or they can be numerous, highly dispersed, and difficult to identify on the other. Terms commonly used in the project management literature to denote and differentiate stakeholders on a project are „Primary Stakeholders“ and „Secondary Stakeholders“, „Internal and External Stakeholders“ and „Key Stakeholders“

5. The Project Stakeholders All stakeholders must be properly and professionally „managed“ throughout the project‘s life-cycle by the project manager and project team in order to increase the chances of the project suceeding. IMPROPER STAKEHOLDER MANAGEMENT IS ONE OF THE PRINCIPAL CAUSES OF PROJECT FAILURE! NEVER IGNORE THE PROJECT STAKEHOLDERS! Project Managers who “mismanage” the project stakeholders can expect potentially serious consequences for their projects!

6. Primary Stakeholders Project Stakeholders Project Primary & Secondary Stakeholders According to Cleland/Ireland [Strategic Design and Implementation, 2002]: „Project primary stake-holders are those individuals or organizational entities who or which have a contractual or legal obligation to the project team and have the responsibility and authority to manage and commit resources according to schedule, cost and techni-cal performance objectives.“ Secondary Stakeholders Using Cleland/Ireland‘s definition of primary stake- holders as a reference, project secondary stakehol- ders are those individuals, groups of individuals and organizational entities [and, as we shall see, commu- nities and even countries] who or which have no formal contractual relationship to the project in question, but who/which believe they have a stake in it because it can affect them in some way or other.

7. The Project Primary Stakeholders According to Cleland & Ireland, project primary stake-holders have direct and operational roles through their participation in the design, engineering, development and production, and after-sales logistical support of the project output / outcomes. Cleland & Ireland are looking at project stakeholders primarily from a corporate and business perspective. Project primary stakeholders typically include the project sponsor, the project manager and project team, the organization‘s senior management, functional managers,project suppliers and contractors, project customers and users, and various state entities.

8. Project Primary & Secondary Stakeholders: An Alternative Definition Development Financing and Implementing Insti-tutions have a different perception as to who constitutes a project’s primary and secondary stakeholders. Example: According to the African Development Bank’s Handbook on Stakeholder Consultation and Participation in ADB Operations, Stakeholders are people/communities who may - directly or indirectly, positively or negatively – affect or be affected by the outcomes of projects or programmes, whereby:

9. Project Primary & Secondary Stakeholders: An Alternative Definition Primary Stakeholders are the beneficiaries of a development intervention or those directly affected (positively or negatively) by it. They include local populations (individuals and community based organizations) in the project/program area, in particular, poor and marginalized groups who have traditionally been excluded from participating in development efforts, and … Secondary Stakeholders are those who influence a develop-ment intervention or are indirectly affected by it. They include the borrowing government, line ministry and project staff, im-plementing agencies, local governments, civil society organiza-tions, private sector firms, the Bank and its shareholders and other development agencies.

10. Primary Stakeholders Project Primary Stakeholders: Examples Project Team Corporate Shareholders Senior Management Project Partners Project Sponsor Project Customers & Users Project Steering Committee Project Input Suppliers & Vendors (ext.) Project Contractors / Subcontractors Project Management Office Primary Stakeholders can be internal or external to the Project-implementing organization Managing all these stake- holders is challenging but routine for the project manager and project team Chief Project Officer / Programme Manager Project Consultants Project Financers (ext.) Functional / Resource Managers Local, State and Federal Government Entities Project Manager

11. Secondary Stakeholders Project Secondary Stakeholders: Examples Competitors Intervenor Groups Consumer Interest Groups Environmentalists Civic and Professional Organizations Local Communities Political Organizations Private Individuals Local, State and Federal Government Entities Tourists Secondary Stakeholders are external to the project organization Managing secondary stakeholders can be especially challenging for the project manager and project team Media The General Population Academia & Researchers Countries, Regions, World Community

12. The Project Stakeholders – (Primary Stakeholders (2)) Project Primary Stakeholders are typically entrusted with: • Providing leadership to the project team • Allocating resources to be used in the design, development and production of project results • Building and maintaining relationships with all stakeholders • Managing the decision context in the design and execution of strategies to commit project resources • Motivating the project team members • Assessing the project‘s progress and initiate corrective measures, if and when necessary • Periodically assessing the project team‘s effectiveness and efficiency

13. Primary Stakeholders: Senior Management Without the interest, encouragement and active support of senior management, projects cannot contribute their full potential to the organization. Senior managers must create a „culture“ in the organization which clearly acknowledges the im-portance of projects as essential building blocks in the implementation of the organization‘s strategy. Senior managers are personally responsible for selecting projects of major significance for the organization, and for ensuring that the requisite resources and infrastructure is made available for the realization of these projects. Senior managers must periodically monitor the progress of projects in their organization‘s project portfolio and, if necessary, in the ex-treme case order the termination of projects if they are adding no value to the organization. Senior Management is ultimately responsible for their organization’s per-formance. As projects are the “building blocks” in an organizations strategy towards achieving its goals, objectives and mission, Senior Managers must keep a close eye on them.

14. Primary Stakeholders: The Project Sponsor The project sponsor advocates the project to senior management. His or her contribution includes initia-ting the project by proposing or selecting a project manager, ensuring that the project is consistent with the strategic direction, mission, objectives and goals of the organization and that its benefits exceed its costs, providing overall direction to the project, and ensuring that the project team has the requisite resources to succesfully complete the project. The project sponsor obtains committment from the resource and functional managers to support the project, periodically reviews the project status reports and project progress with the project manager, helps eliminate obstacles that cannot be overcome by the project team or project manager, and coaches and mentors the project manager. A bad project can blot the sponsor‘s reputation. Trans-fer or retirement of the Project Sponsor while the pro-ject is on-going can spell trouble for the project. Sometimes called the “Project Champion”, the project sponsor performs a bridging function on projects

15. Primary Stakeholders: Steering Committee A project steering committee usually comprises 6–10 members (inc. the Project Manager) and is chaired by the Project Sponsor or another senior official of the implementing organization(s). Committee members would be project stakeholders from diverse areas, some of whom possess considerable relevant specialist knowledge and expertise. Typical functions of a steering committee include assuming responsiblity for the successful achievement of the project goal and outcomes, ensuring alignment of the project with the objectives and goals of the im-plementing and consuming organization(s) or entities, authorizing significant changes to the project scope, cost and schedule, periodical project monitoring, pro-viding guidance to the project manager and team and resolving problems, conflicts and issues beyond their control, liaising when necessary with stakeholders and reporting on the project‘s progress to the higher auth-ority. Potential Pitfalls: Bureacratic, tendency to micro-manage, and focus on politics instead of the project. Steering Committees are recommended on projects which are characterized by a relatively high degree of complexity, visibility, and risk, and entail high cost and duration, i.e., as are usually medium to large projects.

16. Primary Stakeholders: Resource & Functional Managers The functional or resource managers primarily serve as resource suppliers for the project. Their typical functions include providing staff and resources from their respective departments to work full- or part-time on the project, reviewing and approving the parts of the project plan which are relevant for their specific areas, and providing direction to the project team members represen-ting their respective departments. Functional or resource managers also ensure that the project team members from the department are equipped with the requisite skill and expertise profile and are given time to complete their segment of the project as laid down in the project plan. They are expected to be cooperative and elimi-nate obstacles for the project team. Functional / Resource Managers exert great influence over projects, especially in a matrix environment. Dealing with them often requires good negotia-tion and interpersonal skills on the Project Manager’s part.

17. Primary Stakeholders: Project Leader / Manager The project manager is the key person who provides direction to the project team. The Project Manager leads the project team through the creation and implementation of the project plan, obtains formal approval for it, monitors and reports on the progress of the project in relation to the project plan and initiates action to ensure that the project stays on track, and responds for requests for changes to the project plan. The project manager faciliates the team process and team cohesion, removes obstacles facing the team and manages team conflict, calls and manages team meetings, liaises with key project stakeholders, and issues the final project report. The Project Leader / Manager is (Usually) Ultimately Respon-sible for the Project‘s Success or Failure!

18. Primary Stakeholders: The Project Team The project team is right in the front-line of the project‘s planning and implementation. Project teams can be of the cross-functional, self-managed and virtual type. The individual project team members partici-pate in the project planning process and provide technical expertise, ideas, input and motivational support that can help the entire team create quality deliverables within the allocated budget and according to schedule. They also ensures that project issues are communicated timely to the project manager, interact with the the suppliers of project inputs for their respective areas of work and with other project stakeholders, help keep the project on track and provide updates to the project manager on the pro-ject status. Project teams can be cross-functional, self-managed and virtual. Through team effort and collaboration, syner-gy is evolved which is the driving force behind the project.

19. WEEKLY ASSIGNMENT #01 How does your organization categorize its “project stakeholders”? Does it have a checklist of project stakeholders? What are the functions of each type of project stakeholder? If your organization does not formally categorize and classify its stakeholders, develop your own system based on your experience working on projects. Use one or two projects you previously worked on, or are presently working on as examples.