Topic 2.6: Prioritising stakeholders

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Given that projects have a limited amount of time and resources available to them, we cannot realistically expect to service and satisfy every single stakeholder (even if that is what they want).

We therefore need to prioritise our stakeholders in a way that will meaningfully guide us on how to manage them.

Many project managers use a simple classification model that groups stakeholders by their level of real or potential authority or power over the project and their corresponding level of interest in it.

Put simplistically, each stakeholder can be said to have a high or low level of power over a project; in the same way, they could be said to have a high or low level of interest in the project, its outputs and outcomes.

Importantly, these value are independent of each other.

In that case, Australia would totally win

Just because a person has a high level of power over a project doesn’t mean they have a low or high level of interest in it – in fact, their interest could be at any level.

Similarly, high or low interest says nothing about a person’s level of influence or authority.

After all, just because I am interested in the Football World Cup, doesn’t mean I get a say in its delivery!

Note, though, that power and interest should not be confused with awareness.

For example, I might not be aware that the government is planning on building a nuclear waste dump next to my house, but you can guarantee that if I did discover this fact, I would be very, very interested!

Similarly, even though your boss might not know what you are planning, they still retain the power to completely change things when they find out.

Therefore, when analysing a person’s power and interest we should act as if they are aware, even if they do not know about our project just yet (and even if we do not plan on informing them, which comes with its own set of risks).

Stakeholder power refers to their level of authority or influence over a project

Stakeholders with ‘high‘ power can direct significant changes to your project’s time, cost and/or scope; whereas, stakeholders with ‘low‘ power have minimal influence at best.

The following table defines power across five dimensions, from very high to very low.

As a rule, we prioritise the needs of high power stakeholders over the needs of their low power peers.

Definitions like these are usually mandated in the methodology of an organisation to facilitate a common understanding across projects, programs and portfolios of work.

Although you are free to use these definitions in your own organisation, they are not doctrine – you should modify them if appropriate to align with the unique contingencies of your project and organisational environments.

Stakeholders can have high or low interest in a project, but that interest can also be positive or negative

Positively interested stakeholders generally feel good about the project, its potential outcomes and the impact it will have on their person and/or community.

Negatively interested stakeholders are opposed to the project.

This negative interest is rooted in their belief that the potential outcomes and the impacts they will have will ultimately harm them and/or their community.

Assuming someone is fully informed and aware of the project, if they genuinely have no interest in the project and/or its outcomes then they are not a stakeholder.

Stakeholders are prioritised by their level of interest in a project, regardless of whether that interest is positive or negative.

For example, a stakeholder with a very high positive interest will be prioritised over a stakeholder with only a moderate, negative interest.

Similarly, the stakeholder with the moderate negative interest will be prioritised over a stakeholder with a low, positive interest.

The state of positive or negative interest is only used to signal what the project manager can expect from their interactions with the stakeholder.

Once again, be sure to adopt definitions such as these in your methodology at the organisational level, modifying them as appropriate to realise optimal value.

Because power and interest are independent stakeholder attributes, we can combine their classifications to give an overall priority rating.

We do this by multiplying their ‘power’ by their ‘interest’.

In the previous topic, you may have noted that the definition tables each had a score assigned to them from +1 to +5 for power and -5 to +5 for interest.

Let’s look how at multiplying these scores gives us new insight into stakeholder priority.

So which stakeholder deserves the highest priority?

Our assessment reveals the following stakeholder hierarchy:

1. Project team member (+20)

2. Supplier (+9)

3. Concerned resident (-4)

Importantly, a stakeholder’s positive / negative interest in our project does not influence the priority we place on them.

After all, should we devote the same amount of time and energy on our low power resident – even though they might be making a lot of noise – as we do on our project team?

The answer is no; however, this does not give us licence to ignore the resident. As we shall see, it just means we take a different approach.

Positive / negative indicators are a useful third dimension to our matrix, telling us at a glance what we can expect from each relationship.

Get off my lawn!

So what if all our stakeholders come back with a high score?

These are the questions we should ask…

Have we overstated their power and/or interest?

It is easy (and often wrong) to assume that because something is very close to us, it matters just as much to everyone else.

Have we missed some less obvious stakeholders?

When identifying stakeholders, it is usually the highly powerful and interested that immediately come to mind. Don't forget to spend extra time identifying and prioritising the rest.

Is more detailed categorisation required?

When classifying stakeholder groups, we often assign a 'worst case' rating. In reality, only a small percentage may be highly powerful and/or interested, while the rest are much more neutral.

Will we need extra time and resources to manage our stakeholders?

Some projects - especially those with a prominent community and media profile - will inevitably attract more highly powerful and interested stakeholders. Be sure to allow for this in all stages of the project's life.

Some of you may recognise this prioritisation approach: what we have done here is a risk assessment of each using stakeholder-specific criteria.

And in the same way risk prioritisation points to a treatment strategy, our stakeholder priority ranking will lead us to a preferred method of engagement.