Building Stakeholder Relationships That Fuel Innovation and Growth

by Dharam CW2 | Aug 11, 2023 | General

A project manager or leader is much more than someone who develops a strategy and controls all operations within a project. These experts, for example, must be skilled in communication and connection-building because the work requires them to do it frequently. The capacity to develop long-term, trusted relationships with stakeholders is a critical component of project managers’ and leaders’ success. Whether they like it or not, diverse stakeholders directly impact the business. As a result, companies with managers who can foster a deep connection with their stakeholders have a substantial competitive edge in today’s interconnected business environment.

Stakeholders

Why Stakeholders are Important to a Project

A stakeholder is an individual, group, or organization whose interests are affected by the success of a business venture or project. As the name suggests, stakeholders are interested in a project’s success. They might be internal or external to the entity funding the initiative. Stakeholder relationships may positively or negatively impact the project’s life cycle. Therefore you’ll need to identify your key stakeholders and develop a stakeholder management plan to fulfill the requirements.

Every project you manage has stakeholders, whether internal or external. One of the most common reasons for project failure is that the deliverables differ from what the customer requested or did not meet the customer’s demands. To guarantee project success, one should be familiar with the project’s main stakeholders, how they communicate their needs, and what acceptable results are.

Engaging stakeholders throughout the project, especially at the start, will assist, reduce and discover hazards and boost overall “buy-in.” When stakeholders are fully engaged, their impact is amplified. Stakeholders are vital to a project in the following ways.

Importance Of Stakeholders In Project

1. Providing Expertise

Stakeholders are a source of information about current processes, historical data, and industry expertise. When gathering and documenting requirements, it is critical to include all essential stakeholders. Project managers and those in charge of deliverables may be experts on only a few projects. Key stakeholders can contribute to industry-specific needs or limitations that can be useful in identifying project constraints and risks.

2. Reducing and Uncovering Risk

The more one engages and involves stakeholders in the project, the more they will decrease and identify risks. For example, during discussions, stakeholders may raise concerns regarding satisfying original specifications, project demands, and limits. Identifying risks and developing a plan to manage them before issues arise will significantly improve your initiatives’ success.

3. Increasing Project Success

Stakeholders should be aware of the project scope, significant milestones, and when they will be asked to evaluate deliverables before final acceptance. Set expectations early in the project life cycle if the business must satisfy stakeholders’ demands due to competing needs or priorities. This move will assist in maintaining the relationship throughout the process.

4. Granting Project Acceptance

The more frequently you interact and include stakeholders from the beginning, the more likely you will have a successful project outcome. By the end of the project, team members should be aware of delivery expectations and risks and how to reduce those risks. The final acceptance is their last stamp of approval at the project completion phase.

Stakeholder Relationships are key

Building relationships with stakeholders leads to improved trust. People collaborate more readily and successfully when there is trust. Investing time and effort in discovering and cultivating stakeholder connections may boost project confidence, reduce uncertainty, and accelerate issue resolution and decision-making. This concept recommends making a deliberate decision to devote time, attention, and effort to stakeholder relationships. In addition, personal qualities such as self-awareness, mindfulness, respect for others, and courage may be essential to developing trustworthy, open, and honest relationships.

Ways To Approach Stakeholder Relationships

How could we approach it?

• Determine the stakeholder hierarchy.
• Create profiles for individual and group stakeholders.
• Create relationship maps.
• Determine who should interact with whom and when.
• Always maintain a professional and genuine demeanor.
• Build trust and confidence through controlling and satisfying expectations, acting with integrity, honoring commitments, and being trustworthy.
• Consider how you can assist your stakeholders rather than just how they can assist your project.

Risks of overlooking this concept include:

Risks Of Overlooking Into Stakeholders Relationship Concept

• Increased project risk in terms of time, cost, and quality.
• Greater known and unknown project opposition.
• Project management is shattered.
• Reduced team motivation.
• Low cohesiveness within the project community.
• Personal and corporate reputational damage, as well as recrimination.

The benefits of applying this concept include the following:

Benefits Of Building Stakeholder Relationship

• Mutual trust and confidence have grown.
• Stress reduction and a more pleasant working atmosphere.
• Improved problem-solving and decision-making.
• Increased bid value and increased possibilities of keeping clients and employees.
• Opportunities for personal development, maturity, and career progress.
• Sufficiently prepared to deal with challenging circumstances.
• Legacy to carry on with future endeavors.

Ways to build good relationships with Project Stakeholders

Stakeholders must be effectively taken care of for any firm to succeed. These include the customers, suppliers, partners, investors, workers, and the general public interested in your company. When a stakeholder is neglected, the organization can feel the consequences. Building great connections with stakeholders requires work, time, and a well-thought-out action plan.

Building trusted relationships with key stakeholders and maintaining communication throughout your project is essential. Through active engagement and speedy resolution, engaged stakeholders motivate individuals and keep the project on track.

Project managers establish trust and interact with important stakeholders at the outset. However, as the project progresses and the team size rises, we need to catch up on the importance of maintaining those connections. If unengaged, it usually results in communication failures, a mismatch of expectations, delayed decision-making, and, in extreme cases, misaligned project goals with company strategic objectives.

Here are six suggestions for developing and maintaining effective stakeholder relationships.

Ways To Build Good Relationships With Project Stakeholders

1. Identify the key stakeholders.

In every project or program, the project manager oversees the initiative and identifies all stakeholders involved in planning, status reporting, or managing the dependencies. However, the focus here is on how you engage your important stakeholders. Who are the most important stakeholders? It is determined by project type, organizational structure, industry, and internal and external relationships.

Key stakeholders in project engagement are:

• Persons who have decision-making authority.
• Influence.
• A vested interest in the project’s result.

They might be part of your project’s organizational structure (such as a project sponsor or business sponsor) or an extended stakeholder (like external customers or funding partners).

Identifying these important stakeholders early in the project allows the PM and team to build trusted relationships and understand their expectations of project deliverables, their role, and their level of engagement on an ongoing basis.

2. Analyze the individual stakeholders

Analyze the individual stakeholders identified at the previous stage to determine the amount of involvement and time required to create the connection. Historical data, team brainstorming sessions, focus groups, and interviews might provide the necessary knowledge for analysis. Next, each important stakeholder is examined to determine their attitude toward the initiative, level of support, influence, and acceptance of the change.

The project manager would decide on the amount of engagement based on their interest in the project and their ability to affect change. When there is more ambiguity about the program’s scope, objectives, and expected outcome, the PM’s role in managing expectations and relationships is more significant.

3. Plan on how to keep your stakeholders engaged in your project

Consider organizational culture and attitudes toward the project while developing an engagement plan. For example, understand the stakeholder’s level of support or resistance to team talks.

Define how you will assess when a stakeholder becomes disengaged as part of your strategy; the metric may be anything like the number of mandatory meetings missed by the stakeholder in a month. When a significant stakeholder consistently skips a needed meeting or fails to make timely decisions, it is a source of contention. If not handled, this disengagement will begin to undermine the project.

4. Keep all key stakeholders informed and updated

The project manager is responsible for keeping all key stakeholders informed and updated as frequently and as early as feasible during the project. Therefore, maintain a proactive approach in your discussions with them.

To build a standardized onboarding process, new stakeholders should become acquainted with a collection of standard artifacts (like the charter, communication plan, business case, and risk register). Also, take the chance to hear from current stakeholders. Feedback from stakeholders who no longer have a vested interest in your endeavor may help you adjust your path.

5. Maintain involvement

It is critical to maintain your involvement, especially in long-term initiatives. At the end of a project, we’ve seen project teams wear out, with stakeholders eager to move on to the next big thing. The project manager must keep the engagement going. The connections and reputation you build via this involvement can help you succeed in future efforts in large businesses. Maintain contact with your key stakeholders long after the project has been completed and delivered.

Project Management Trends That Will Shape the Future

Project management is crucial in deciding how businesses and organizations will fare in the marketplace. Projects might include implementing a corporate plan, running marketing efforts, or organizing business events. Teams work to interact, manage, and communicate as effectively as possible to complete tasks and meet deadlines.

Organizations flexibly responded to the pandemic’s disruption by developing new methods of operation. However, they were thrust into the era of digitization and had to reconsider their methods of operation. These top 6 project management trends in the future demonstrate the ongoing need for technical innovation and digital transformation regarding the function of project management software in the future by building great stakeholder relationships.

Future Project Management Trends

1. AI Automation and Implementation

The use and usage of artificial intelligence are the most obvious of the new current trends in project management. Knowing which initiatives are more successful enables teams to precisely determine which aspects are vital if the firm is to reduce costs and risks. As a result, organizations may increase transparency and productivity. The main factor driving the current increase in the adoption of such software is this characteristic of project management systems.

Let’s look at a few instances:

• A few businesses currently use automated and machine learning technologies to get alerts about potential issues the company could run into. For instance, suppliers might now get notifications about possible obstacles like bad weather and traffic.
• Building machine learning algorithms to support a project manager’s decision-making capabilities by evaluating data from several projects in the project portfolio is a promising study area.

2. Globalized Project Management

As working circumstances got more flexible due to the forced work from home caused by the worldwide pandemic, businesses and teams became even more globalized. It has long since established roots. Mercer estimates that 70% of businesses want to use the hybrid work model.

Although the remote work and hybrid model trend allows for the employment of creative and inventive individuals worldwide, project management has to keep up with it. Collaboration, for example, is challenging when team members are unavailable due to competing schedules created by different time zones.

Software for project management provides a tool that could address this issue. The platform enables all brainstorming sessions and discussions to take place in a single setting, allowing businesses to access talent worldwide.

3. Hybrid Project Management

The third new development in project management is the rising use of the hybrid approach, which refers to how project teams combine the Waterfall methodology, the systematic approach, with the Agile methodology, which is the quick-moving methodology. A hybrid approach aims to elevate teams to become aware of the specific project lifecycle while providing the ability to support them in changing the plan as necessary.

How do you know what will work for you, and how can you prepare for this trend?

PMs must learn about the most recent techniques, examine some of the fundamentals, and analyze how to use them correctly to obtain a greater understanding of the project situation and its aspects, such as the clients, the corporate objectives, and the purpose of the project, and the team’s attitude.

There is an increasing requirement to adapt your strategy and develop a project plan that enables you to lead projects unconventionally and comprehend different components of multiple techniques that cater to the demands of your team, perceived timeline, environment, end goals, etc.

4. Stakeholder-Centered design

The fourth most recent trend in project management is an emphasis on delivering transparency for the benefit of the company’s stakeholders and developing products centered on the human perspective. Project managers may communicate with, collaborate with, and inform stakeholders. This design makes it easy for investors and customers to support any project launched as part of a company’s business plan.

5. Soft Skills

Soft skills have become an essential component of project management. Project managers must interact with stakeholders, clients, and project teams. They will mitigate risks, resolve internal disagreements, and keep the project team engaged. Having a high level of emotional intelligence will also be useful in project management. Therefore, organizations should begin investing in tools and programs that assist employees in acquiring soft skills.

6. Predictive Data and Simulation-Based Analyses

The most difficult and demotivating aspect of managing several projects is when unanticipated repercussions jeopardize their success. Project managers seek a solution to give them the knowledge to account for the unexpected. Project teams with predictive and data analytics skills may fully use KPIs and benchmarks and execute them proactively by developing data-backed best practices.

Companies cannot afford to bear the repercussions of project failure, given the competitive environments of most markets. Therefore, projects must be started successfully to stand out from the competition. The most recent advancements in project management software demonstrate that technology will play a role in this element of corporate operations in the future. Suppose you want projects to succeed and businesses to thrive. In that case, you should consider introducing project management solutions to simplify your, your teams, and your stakeholders’ lives.

Final Thoughts

Stakeholder involvement will become essential to optimize success as knowing stakeholders becomes increasingly critical for firms. For example, stakeholder engagement may assess reactions, track public impressions of a company’s operations, and assure collaboration and partnership with all stakeholders. In addition, an organization’s long-term performance may be determined by its connections with stakeholders, which provide commitment and buy-in to future initiatives and difficulties. As a result, the company becomes more aware and responsive to the demands of all its users and stakeholders.

Stakeholder management must place a greater emphasis on involvement to move projects from installation to execution. Stakeholder management must be less hierarchically centered while considering companies’ changing political nature. Projects should begin by identifying diverse stakeholders, engaging with them consistently, and coordinating continuously to increase project success.

As a project proceeds, Stakeholder management processes need to account for the dynamic nature of stakeholders’ commitment to a project and the interactions between various stakeholders. As a result, project teams will get the competitive advantage they want by focusing not just on their stakeholder position but also on the other major stakeholders in a project and how they interact. To achieve more effective stakeholder involvement, follow these three steps:

• Create a stakeholder map and keep it updated as the project progresses.
• Prioritize essential stakeholders and regularly evaluate assumptions about commitment levels and impact.
• Create essential stakeholders and increase their commitment to the change.

Feel free to check out my discussion on this topic with Justin Buckwalter in YouTube

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