Project Manager: importance of handling stakeholders
There are many books on project management, and they are often good at describing how one ideally should act as a project manager. In theory, everyone works together in the same direction and follows the same rules. But reality is rarely that simple.
Many projects fail—in fact, the Project Management Institute (PMI) estimates that up to 70% of all projects do not meet their goals. Most projects could be technically feasible if enough resources, time, and budget are allocated. The technology is often known and based on previous experiences, with only a few elements needing innovation. Therefore, technical challenges are rarely the reason projects fail. Often, the problems lie in human factors.
Typical causes of project failure include:
- Poor planning: Lack of thorough planning and clear goals.
- Lack of commitment: Relevant stakeholders are not motivated.
- Insufficient resources: There is not enough time, budget, or personnel.
- Scope creep: Uncontrolled changes or additions to the project scope.
- Ineffective risk management: Potential risks are not identified or managed.
- Poor communication: Poor communication among team members.
- Inexperienced team: Lack of necessary skills or experience.
Human factors are largely about how the workplace operates. Competition influences the market, and not everyone follows the rules or works in the same direction. This applies to projects as well.
In some project teams, there are employees who want to become project managers or who feel they are too skilled for their current role. Salespeople may have oversold a project to secure a sale. Leaders might push the project forward without reason or avoid taking responsibility by changing the project’s requirements. On the client side, there may be stakeholders pursuing objectives different from those of the project.
When a project manager begins a project, they must understand the project’s goals and scope, but it is equally important to understand the stakeholders’ attitudes toward the project. Is there agreement on the project’s goals and milestones, and have the budget and timeline been approved by all parties? Does the project have the resources the project manager has requested?
The project manager’s task is to ensure the project is completed within the agreed time and budget. The project may have a tight schedule and/or budget, which in itself can be a significant challenge. But the greatest risk in a project is scope creep. Most creeps arise due to disagreements among stakeholders.
Stakeholder Disagreements
Any disagreement among stakeholders can potentially affect the project’s success. Stakeholders who are either overly engaged or completely disengaged pose a risk to the project. Additionally, stakeholders with personal agendas that do not align with the project’s goals can also create challenges.
An engaged stakeholder who disagrees with the project’s goals or scope and believes something is missing can be a source of scope creep—that is, changes to the project’s scope. If this stakeholder is persistent, it can lead to changes in the project’s goals, timeline, budget, and tasks, which can impact the project’s success.
On the other hand, a disengaged stakeholder with significant influence can also be a risk. Such a person often avoids taking responsibility and has limited understanding of the project, making them susceptible to the opinions of others. In conflict situations, they are likely to support the loudest voice rather than take responsibility.
The project’s steering committee can also be a risk factor if they alter a realistic project proposal to fit their own preferences. For example, this could involve removing essential budget items or reducing estimated work hours, which may create financial challenges and place unnecessary pressure on the team.
When the timeline and budget are strained, it can negatively affect team morale and commitment. Additionally, scope creep can create frustration when the team has to revise tasks they have already completed.
Stakeholder Analysis
To increase the likelihood of a successful project, the project manager should conduct a stakeholder analysis that considers:
- The stakeholder’s influence on the project
- The stakeholder’s interest in the project
- The level of engagement
- When the stakeholder will be active
- Any potential risk factors associated with the stakeholder
- How best to manage the stakeholder
If there is an imbalance between a stakeholder’s influence, interest, and engagement, it can pose a risk to the project. A stakeholder with high influence but low interest and engagement may respond too slowly, and their opinions may introduce unforeseen changes.
A stakeholder with high engagement and interest but little influence can also create challenges. This type of stakeholder may have many suggestions, which may not be implemented, potentially leading to unnecessary discussions and delaying the project’s progress.
It is essential that each stakeholder is assessed individually, as they can affect the project in different ways. The challenge is to find the right balance in the stakeholder’s involvement so they do not feel either overlooked or overly involved.
Each stakeholder has their own focus within the project: some are most interested in finances, others prioritize the concept, and some are focused on details. This means that the project manager must communicate differently with each stakeholder. The project manager achieves the best collaboration by focusing on the aspects that each stakeholder cares most about.
Stakeholder Involvement
A project is successful when its goals are achieved. Therefore, stakeholders should only be involved when their input is relevant to reaching these goals. Projects typically consist of various issues that vary in complexity: most issues are of medium complexity, some are simple, and others require specialized expertise.
C. Northcote Parkinson developed the “Law of Triviality” which can help determine when stakeholders should be involved. The law states that “The time spent on an agenda item is inversely proportional to its financial significance.” In other words, small decisions often receive more attention than big ones—though not for the most trivial matters.
One explanation is that during the decision-making process, people assess whether they have enough information to make a decision. When faced with large, complex decisions, they may feel overwhelmed and often stop gathering information prematurely. Major decisions require extensive information and a deep understanding of the consequences, increasing the risk of errors along the way. Conversely, people may dwell too long on minor decisions with fewer consequences and more clarity, where they actually should act more quickly.
When the project manager reviews the project scope, they can observe when stakeholders want to be involved. Often, very simple and very complex issues pass easily, while medium-complexity issues attract the most comments and input from stakeholders. This allows the project manager to identify where the risk of scope creep—unwanted changes to the project scope—is greatest.
By identifying which issues carry the highest risk of scope creep and having a stakeholder analysis, the project manager can plan a strategy for how best to involve stakeholders. This reduces the likelihood of unwanted changes and increases the chances of a successful project.
Managing Scope Creeps
The project manager can prevent many scope creeps by conducting a thorough stakeholder analysis and developing a clear communication strategy. When the project team works on details, they often uncover things that were overlooked, errors, or choices that could have been better. These adjustments are normal and help the project reach its goals.
When the project manager and the team create the project plan, a Work Breakdown Structure (WBS) is often used to define tasks, time requirements, and budget. However, once tasks are planned, it can be difficult to see the connection between the overall concept and the individual tasks—the link between the idea and specific tasks can get lost in the process.
As a result, the consequences of project changes can be difficult to assess if scope creep occurs. Changes may be described at both the conceptual and task levels. Adjusting the project can take unnecessary time if it is unclear which tasks need updating.
A method that creates a stronger link between concept and tasks is Proglar Project Modeling. This approach is similar to WBS but models the entire project concept, which can then be broken down into specific tasks. If scope creeps occur, one can quickly see how a change affects other tasks. The connection between concept and tasks will be clear and visible.
For example: In a car project, a late decision is made to change the wheel size for a better design. The wheel change must not impact the car’s acceleration, speed, or safety. This seemingly minor change can affect the car’s chassis, fenders, axles, brakes, etc. The faster the project manager can identify all areas impacted by the change, the quicker it can be implemented. Missing anything can lead to errors and delays in the project.
Summary
The project manager’s main task is to ensure the project’s goals are achieved within the set time and budget. To accomplish this, the project manager must have a clear overview of the project goals and understand how the various stakeholders view them.
Disagreements among stakeholders are best handled through a thorough analysis that describes each stakeholder’s stance on the project. By regularly following up with each stakeholder, the project manager can limit the number of scope creeps, increasing the likelihood of meeting the project’s objectives.
Additionally, the project manager should use a method that clearly links the project’s overall concept with individual tasks, such as Proglar Project Modeling. Such a method will make it easier to manage any changes along the way, ensuring the project proceeds with fewer errors and reduced time consumption.