Stakeholder Management: Guide to Processes, Tools & Best Practices

When you’re managing a project, working with multiple stakeholders can end up being your biggest challenge.

With lots of personalities to handle, and plenty of demands to juggle, it can be difficult to stay focused and manage everyone’s expectations effectively.

What is Stakeholder Management?

Stakeholder management is identifying and engaging with the individual needs of specific people or groups with a controlling position on a project.

To ensure the correct approach and safeguard project progress, many businesses will employ stakeholder management plans.

These strategies focus on analysing the needs of each individual, drafting a set of expectations, and implementing various ways to engage and communicate with them along the project timeline.

But it’s also crucial to understand that stakeholders can take numerous forms. From business owners and investors to customers and suppliers.

With this in mind, it’s clear that stakeholder management is an imperative skill for project management professionals.

Why is Stakeholder Management Important?

As we just highlighted, managing stakeholders and improving communication in the workplace are incredibly important parts of project management, as they help set the project’s tone.

Communication is a crucial element of any stakeholder management strategy. Team Leader responsibilities may include speaking with key stakeholders to help them understand their roles and responsibilities within the project landscape.

But the clarity afforded by stakeholder management can also set expectations in several core areas:

• Budget
• Resources
• Objectives
• Timescales
• Risk management
• On-going communication

Who Are Stakeholders, and How to Identify Them

Stakeholders are people from around the business who have an interest in the project you’re working on. When you’re involved in stakeholder management, you need to set clear expectations and communicate openly with the people around the table, so everyone is on the same page.

Roles and Responsibilities of Stakeholders

Internal stakeholders could have all sorts of different roles across many departments within the business. They may be from varying levels of seniority and include anyone from heads of departments to junior designers, or account executives.

If they have an interest in the project or are working on it, they’ll be a stakeholder.

There could even be external stakeholders too, who have an interest in a company project and are focused on its success, such as investors, agencies, or other companies you might be working with.

Internal vs. External Stakeholders

Internal stakeholders, also known as primary stakeholders, are those directly invested in the company. Some examples of internal stakeholders include people like investors, owners, directors, managers, and employees.

Whereas external stakeholders refer to those who have an interest in the company or project, but are not directly involved in business-centric decision-making or project performance. Some examples of external stakeholders include customers, the local community, suppliers, or the Government.

Critical Steps for an Effective Stakeholder Management Process

Dealing with stakeholders can be daunting, especially when you have a large project to deliver. However, one core stakeholder management skill is getting your approach right. 

This doesn’t have to be a complicated and extensive plan. You can ace your strategy through four simple steps:

1. Identify: Define who the project stakeholders are.
2. Analyse: Research each individual to determine which area of the business they cover and how the project will affect them. Use a robust stakeholder analysis matrix to establish and help manage their expectations.
3. Engage: Meet with the stakeholders to outline your project plans and build trust. Communicate how the project is going to progress and lead with empathy to reiterate your support for their area.
4. Manage: Throughout the project, keep stakeholders updated regularly with progress reports. But remember, clarity and transparency are key.

How to Manage Stakeholder Expectations

Managing stakeholder expectations can be a daunting task. However, by breaking down your approach into three core areas, you can help clarify your position and deliver value: 

#1. Be Organised

When you’re leading a team, you’ll need to be juggling lots of priorities and expectations from plenty of stakeholders. To start with, you’ll need to be extremely clear about what’s expected from each individual.

You’ll need to use your project management skills to map out how long certain tasks are going to take, and the expected outcome at the end. You could do this using a management tool, such as Trello, that all of your team have access to, so you can report on progress quickly and easily.

#2. Communicate Clearly

Be clear with your communication to stakeholders in terms of managing expectations. Over-promising is setting your team up for a fall, just to appease senior stakeholders.

Managing stakeholders isn’t always easy, especially when you may have people with different opinions in the room. For that reason, you’ll need to be focused on stakeholder engagement, identifying each person’s communication style, and how they prefer to hear about any updates.

#3. Be Understanding

Empathy can really help you to work closely with key stakeholders and direct reports too. Understanding what’s important to each one and what’s frustrating them can make it easier for you to deliver the results they’re hoping for.

Taking the opportunity to have regular check-ins with your team can help you understand any blockers that might be holding them back, and can also give you the opportunity to identify any areas where processes can be streamlined.

Common Challenges in Stakeholder Management

As we have showcased, working with stakeholders is a huge part of project management and wider business development. However, as with any communication-led task, there are often challenges to overcome.

Some common examples of stakeholder management challenges include:

• Conflicting expectations: Different stakeholders will value different outcomes, whether because they are from different backgrounds (e.g., internal vs. external stakeholders) or because they operate in different departments. This is where thorough stakeholder analysis and engagement are vital.
• Lack of involvement: Another challenge of managing stakeholders is a lack of buy-in. Some individuals may be too busy, distant, or disinterested in the project. However, it’s important to remember that, similar to building a positive workplace culture, results improve when you have buy-in from the very top.
• Difficult stakeholders: One of the most common challenges is managing difficult people or opposing parties. Stakeholder resistance can develop from a lack of confidence, fear of change, or conflict of interest. Overcoming this challenge means leveraging emotional intelligence and conflict resolution skills to tackle each case proactively and constructively.
• Communication breakdowns: As we mentioned in the “Engage” and “Manage” steps of the stakeholder management plan, having clear communication lines before and throughout the project is crucial for stakeholder buy-in. It’s also imperative to keep the project running smoothly, within budget, and on schedule.
• Software uptake: PMI’s Talent Gap report highlighted that over 2.3 million people annually are needed to fill project management tasks, but only 23% of businesses leverage management software. Let’s explore that point around management software and tools in more depth now.

Best Stakeholder Management Tools to Enhance Your Strategy

Following on from that previous statistic, it’s clear that stakeholder management software is becoming more critical than ever. Some top stakeholder mapping tools can help with tasks like stakeholder identification and analysis. 

Let’s look at some notable tools:

• Canva: Far from being a tool for beautifying presentations or creating social media content more appealing, Canva also offers a personalisable stakeholder mapping function to help you identify and organise stakeholder needs.
• Tractivity: Tractivity is an intuitive tool that allows you to score your stakeholders based on project-sensitive attributes like interest, influence, relationship, sentiment, reputation, and relevance. You can then monitor and track any changes. 

Project planning is another crucial element of management. It can also help make the job of stakeholder management easier. However, recent statistics show that 78% of projects either go over budget or experience timeline delays.

Thankfully, tools like Click-Up, Asana, or Trello can play a vital part in delivering project success. By managing your schedule and mapping projects efficiently, you offer transparency to stakeholders and clear deadlines.

Stakeholder Management Best Practices

If you’re looking for ways to earn more respect while managing stakeholders, we’ve rounded up ten tips to help you get on the right track:

#1. Determine Your Stakeholders’ Communication Style

As we’ve already mentioned, knowing your stakeholders’ communication style is key. Once you know whether they prefer face to face meetings with a lot of discussion about the project, or a direct, succinct update via email, lean in to what they’re all about.

Many managers won’t always make this clear straightaway, so asking them outright can help steer you in the right direction.

#2. Use Their Language

When you develop empathy with your stakeholders, you understand their motivations and the reasoning behind their decision making. You also start to get a clear idea of the language they use when they’re talking about the project.

If you can, try to use this when you’re speaking to them, rather than sticking to acronyms your team uses that might not make sense to someone else. This is especially true for external stakeholders who may use different terminology, and who might become confused if you continue to use words that mean nothing to them.

#3. Set Expectations

It’s vital you establish clear expectations from the get-go, and don’t promise something that you can’t deliver. If there are hold-ups, keep everyone updated so it’s not a shock when the work isn’t delivered.

#4. Know What Goals the Team is Aiming For

If you’re not aligned with the goals of the entire team, you can’t guarantee project success. The aims they have in mind may be completely different, so it’s always good to get on board with this straight away.

Your stakeholder analysis should cover this too, when you’re considering who should be notified about the project you’re working on.

#5. Be Proactive

If you’re managing stakeholders, being proactive will get you noticed and set everything in motion. Instead of waiting for your colleagues to come to you, be proactive in setting up meetings, and getting the right people in the room.

#6. Shout About Your Contributions

We don’t seem to shout about our contributions very much, but if we don’t let people know the work we’ve put in, how will they find out?

Let people know the work you’re doing, and the effort that’s gone into it, so others are aware of the value you’re adding to the business.

#7. Take Things Off Other People’s Plates

Got some spare time? Ask your manager if you can take anything off their plate, and add it to your to-do list. Sometimes, people won’t ask for help, or delegate tasks they think they must do themselves.

However, if you’re willing and able to help, you might have the opportunity to expand your skillset, and work on new projects. It may well be that you’re more suited to the task, than your manager.

#8. Come With Solutions, Not Problems

Although it’s tempting to flag a problem as soon as it arises, a senior leadership team will hold more value in someone who can approach them with a solution instead.

Before you bring the problem up, have a quick brainstorming session to see if there are ways around it, so you can show that you’ve really thought things through.

#9. Limit Surprises

As much as you can, limit unwanted surprises and give regular updates so everyone is aware of any potential issues before they become bigger problems.

#10. Disagree With Good Reason

Disagreeing with your colleagues can always be a little daunting, but when you have good reasoning to back yourself up, it can be worth doing it for the good of the business. Lots of people are grateful for constructive feedback, rather than criticism.

How Stakeholder Management Training Can Benefit Organisations

Stakeholder management courses and training sessions can help sharpen the core skills required for identifying, researching, and communicating with stakeholders.

In addition to those core areas, there are some bonus benefits to completing training, including:

• Self-evaluation: Strengthening management skills requires periods of deep self-evaluation and recognition of personal weaknesses. Having the ability to step back and objectively review performance and project progress will put you in a better position to pass these learnings on to stakeholders and make necessary improvements.
• Develop risk management skills: Enhancing risk perception skills allows you to manage a project while negotiating the pitfalls of similar projects.
• Improved decision-making: Discovering and studying decision-making tools and theories can give managers a better understanding of how to respond to challenges with business performance in mind.
• Gain the upper hand: Many businesses often neglect stakeholder management when embarking on new projects. This training can help you stay ahead of the game.

Our tailored customer service training course focuses on all the core areas needed to drive improvements in your team’s stakeholder management skills.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions about stakeholder management. 

Stakeholder Management vs. Stakeholder Engagement – What’s the Difference?

Many believe that stakeholder management and engagement are the same thing and are regularly used interchangeably. However, they are subtly different. 

Stakeholder management refers to the process of identifying, researching, and communicating with internal and external stakeholders to establish and address their expectations and concerns. 

Stakeholder engagement focuses more specifically on the role and importance of communicating with stakeholders. 

How Do You Measure the Success of Stakeholder Management?

Customer service training courses highlight that feedback taken from rounds of stakeholder engagement and research can help identify and track meaningful project success. 

Strategic Marketing Leader Nikhil Jain states:

“Metrics such as awareness, engagement, satisfaction, advocacy, and influence can reflect the performance and impact of your stakeholder management strategy.”

How Do You Manage Conflicting Stakeholder Interests?

Conflicting interests is one of the core challenges of stakeholder management. But here are the best ways to navigate these choppy project management waters:

• Identify key stakeholder and research their areas of expertise
• Utilise stakeholder engagement skills to define core metrics
• Promote a culture of communication
• Leverage objective data for decision-making
• Empathise with opposing parties
• Use emotional intelligence in conflict resolution

Conclusion

Stakeholder management is imperative to your business’s continued success and growth. Not only can it ensure timely project delivery, but it can also help instill a positive culture in your company built on communication and mutual understanding.

But you don’t need to invest in complex, lengthy courses to bring these skills into your business.

Whether your team regularly encounters internal or external stakeholders, our one-day bespoke customer service training courses work with your team and industry to sharpen all the skills required in stakeholder management.