Understanding stakeholder management

Working in project management means collaborating with a broad range of individuals and groups, each with their own goals, influence, and interests. Whether you’re overseeing a large infrastructure build, leading a digital transformation, or rolling out new HR systems, you’ll encounter both internal and external stakeholders. Managing these relationships well is not only expected, but it’s also essential for success.

What is stakeholder management?

Stakeholder management is the systematic approach to identifying, analysing, and working with people or organisations that could affect, or be affected by, your project or business operations. These groups, called stakeholders, may include clients, employees, suppliers, regulatory bodies, and the broader community.

Effective stakeholder management means understanding stakeholder expectations and using the right management strategies to achieve your project’s goals while respecting diverse perspectives.

The role of stakeholder management in project success

The role of stakeholder management extends beyond ticking boxes. It’s about building long-term, positive relationships and making sure the right voices are heard throughout the life of a project. When led proactively, it can strengthen community trust, foster innovation, and help ensure key project messages land with the people who matter most.

Advantages of a strong stakeholder management process

Adopting a robust stakeholder management process benefits projects at every scale, from major public works to smaller not-for-profit initiatives. Here are some ways effective stakeholder management can help you reach your objectives:

Preventing risks before they escalate: Identifying stakeholders early through thorough stakeholder analysis and stakeholder mapping highlights potential objections, cultural sensitivities, and emerging risks across diverse stakeholder groups.
Consistent communication: A well-defined stakeholder management plan includes a communication strategy tailored to both internal stakeholders (team members, leadership) and external stakeholders (contractors, community groups), ensuring relevant people are kept informed throughout the process.
Greater alignment and resource efficiency: When expectations are clear, resources can be aligned with strategic objectives, and efforts focus on the most appropriate stakeholders.
Enhanced reputation and community trust: Strong stakeholder relationships, underpinned by effective stakeholder engagement activities, reinforce your credibility as a project manager and reflect positively on your organisation within the wider community.

Stakeholder management vs stakeholder engagement: What's the difference?

Although the terms are closely linked, it’s important to clarify the difference between stakeholder management and stakeholder engagement.

Stakeholder management covers the planning and strategy side: it involves analysis, mapping, and developing a defined stakeholder management plan. This blueprint guides how you approach and interact with your key stakeholders and forms part of your broader project strategies.
Stakeholder engagement puts the plan into action. It encompasses the stakeholder engagement strategy, relationship management, and the ongoing activities that ensure key individuals have meaningful opportunities to interact with your project.

Building your stakeholder management framework

Projects thrive on transparency and collaboration. Discover the key components of a successful strategy.

Identifying stakeholders early

Start with comprehensive mapping. Identify stakeholders who are directly or indirectly involved, and use tools such as the power/interest grid to visualise influence and interest. This may involve creating an analysis matrix or representative stakeholder lists to ensure no group is overlooked.

Understanding and prioritising stakeholder needs

Invest time in understanding stakeholder interests, priorities, and concerns. Recognise where their needs and influence intersect with the project’s goals and use these insights to develop tailored management strategies.

Communication and engagement

Develop a robust communication strategy that addresses not just internal and external stakeholders, but also wider community groups who may become important as the project develops. Use clear, two-way communication channels to keep dialogue open and show that feedback from all stakeholder interactions is valued.

Building and maintaining relationships

Positive relationships stem from active listening, involving stakeholders in key decisions, and being transparent about how their input shapes the project.

Flexibility and responsiveness

Account for shifting power relationships as the project evolves. Adapt approaches to meet new expectations or address emerging issues as they arise, always working towards increased stakeholder support and alignment with objectives.

Monitoring and continuous improvement

Evaluate how well your stakeholder engagement plan and wider strategies are working. This might involve tracking participation in activities, gauging satisfaction, and measuring alignment between expectations and project delivery. Be open to feedback and ready to refine your approach.

Using the right tools

Consider stakeholder management software that supports specific needs, such as broader community relations activities, thorough analysis, and effective data management processes. The right tools keep information organised, streamlining interactions, and enabling consistent engagement across multiple projects.

Measuring stakeholder relationship management success

To ensure your efforts are delivering, set up clear ways to track your progress. Here are practical metrics for project managers:

Stakeholder engagement and feedback: Track attendance at meetings and workshops, and collect feedback to spot trends in engagement and satisfaction.
Alignment to strategic objectives: Use stakeholder mapping values and the analysis matrix to monitor whether interests align with your project’s aims.
Conflict resolution: Monitor how quickly stakeholder concerns are addressed and resolved, as this is a key signal of healthy relationships.
Collaboration and repeat involvement: Positive stakeholder relationships often translate into future collaboration, so look out for signs of ongoing engagement.
Project outcomes: At the end of a project, reflect on whether expectations were met, especially in areas where your stakeholder engagement strategy played a significant role.