Unit 11: Stakeholder Management (PMBOK Guide, Chapter 13)

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1 (PMBOK Guide, Chapter 13) Stakeholder management identifies people, groups, and organizations that could impact or be impacted by the project. The topic has increased in importance with each new edition of the PMBOK Guide. See course slide #11-1 for an overview of stakeholder management. Major Processes 13.1 Identify Stakeholders (identifying the interests, involvement, and impact of people or organizations impacted by the project) 13.2 Plan Stakeholder Management (developing appropriate management strategies for engaging stakeholders throughout the project) 13.3 Manage Stakeholder Engagement (communicating and working with stakeholders to meet needs and addressing issues as they occur) 13.4 Control Stakeholder Engagement (monitoring stakeholder relationships and adjusting strategies as needed) The PMBOK Guide states that some stakeholders are likely to impact the project in a positive way while others are more likely to impact the project in a negative way. It is also true that some stakeholders have significantly more influence and power than others. The ability of project managers to effectively manage stakeholders may literally make the difference between success and failure. The following activities are part of stakeholder management: Identify all potential stakeholders Assess the potential interest, influence, and power of each stakeholder Understand stakeholder needs and expectations Develop appropriate management strategies for various stakeholders Effectively manage issues and conflicts as they arise Continuously communicate with stakeholders 13.1 Identify Stakeholders (PMBOK Guide, p. 393) This process identifies people and organizations that may be impacted by the project and determines their level of interest, involvement, and potential impact on project success. It is vital to identify stakeholders early and devise strategies for maximizing positive influences and minimizing negative impacts. Considering the limitations on a project manager s time and the potentially large number of stakeholders, it is also necessary to prioritize the relative importance of each stakeholder. CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

2 Identify Stakeholders Inputs Tools Outputs 1. Project charter 2. Procurement documents 3. Enterprise environmental factors 4. Organizational process assets 1. Stakeholder analysis 2. Expert judgment 3. Meetings 1. Stakeholder register Four Key Inputs for Identify Stakeholders (PMBOK Guide, p. 394): 1. Project Charter: The charter usually provides information about stakeholders such as customers, the sponsor(s), and people participating in the project (team members, project manager, departments, and external organizations). 2. Procurement Documents: If a project involves outsourcing and a contract exists, the parties in the contract are stakeholders. 3. Enterprise Environmental Factors: Factors potentially relevant to stakeholder identification include: Organizational culture and structure Governmental or organizational regulations or standards Geographical (global, regional, local) trends, practices, or habits 4. Organizational Process Assets: Factors potentially relevant to stakeholder identification include: Templates for stakeholder registers Lessons learned from previous projects Stakeholder registers from previous projects Three Key Tools for Identify Stakeholders (PMBOK Guide, p. 395): 1. Stakeholder Analysis: Stakeholders with sufficient influence should be managed carefully and partnerships or coalitions may be formed to maximize project success. PMI identifies the following three steps for stakeholder analysis: Step 1: Identify stakeholders and their roles, expectations, and levels of influence PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

3 Step 2: Analyze the potential impact of each stakeholder and classify them using various models such as: Power vs. interest grid Power vs. influence grid Influence vs. impact grid Salience model (considers power, urgency, and legitimacy) Note: PMBOK Guide, Figure 13-4, p. 397 displays an example. See course slide #11-2 for a Power vs. Interest Grid Step 3: Assess likely stakeholder responses and plan how to influence them for their support. 2. Expert Judgment: Used to assist in the identification and analysis of stakeholders. Expertise can be obtained through individual meetings, interviews, surveys, and focus groups. 3. Meetings: Used to exchange information about each stakeholder. One Key Output for Identify Stakeholders (PMBOK Guide, p. 398): 1. Stakeholder Register: Contains all the information on identified stakeholders including: Identification (name, position, location, role, contact information) Assessment (expectations, potential influence) Classification (internal or external, supporter or antagonist) 13.2 Plan Stakeholder Management (PMBOK Guide, p. 399) Stakeholder planning involves developing strategies for effectively engaging key stakeholders throughout the entire project life cycle. Key activities include: Identify stakeholders expectations so that they can be managed. Manage and improve communications. Create and maintain relationships between the project team and other stakeholders. Review and, if necessary, adjust the level of stakeholder engagement as the project progresses. Stakeholder management must be continuous and iterative. CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

4 Plan Stakeholder Management Inputs Tools Outputs 1. Project management plan 2. Stakeholder register 3. Enterprise environmental factors 4. Organizational process assets 1. Expert judgment 2. Meetings 3. Analytical techniques 1. Stakeholder management plan 2. Project documents updates Four Key Inputs for Plan Stakeholder Management (PMBOK Guide, p. 400): 1. Project Management Plan: Information relevant for developing the stakeholder management plan includes: Techniques for communication among stakeholders Human resources requirements: how roles, responsibilities, reporting, and staffing management will be accomplished Change management plan Which processes are applied to each project phase How work will be executed to accomplish objectives 2. Stakeholder Register: An output of the previous process, the register identifies potentially important stakeholders. 3. Enterprise Environmental Factors: All the factors described in PMBOK Guide, Section are potentially relevant to stakeholder planning. 4. Organizational Process Assets: All Organizational Process Assets are relevant to stakeholder planning, but lessons learned and historical information from similar projects are of particular importance. Three Key Tools for Plan Stakeholder Management (PMBOK Guide, p. 401): 1. Expert Judgment: Helps determine the level of stakeholder engagement needed for project success at each stage of the project. For example, the involvement of senior stakeholders such as the sponsor may be much more important near the beginning of the project PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

5 2. Meetings: Provide a forum for the project team and other experts to discuss the required level of stakeholder engagement needed for success. 3. Analytical Techniques: Provides a way to compare planned engagement levels to current, actual levels of engagement using the following classification scheme in which stakeholders may be: Unaware: Unaware of project and potential impacts. Resistant: Aware of project and potential impacts but resistant to change. Neutral: Aware of project yet neither supportive nor resistant. Supportive: Aware of project and potential impacts and supportive of change. Leading: Aware of project and potential impacts and actively engaged in ensuring the project is successful. Note: See course slide #11-3 for an example of this classification model. Two Key Outputs for Plan Stakeholder Management (PMBOK Guide, p. 403): 1. Stakeholder Management Plan: Identifies management strategies required for effectively engaging stakeholders. The plan may document the following: Desired engagement level Stakeholder interrelationships and potential overlaps Stakeholder communication requirements Information to be distributed and expected impact on stakeholder engagement Time frame and frequency for distribution of required information Method for updating/refining the stakeholder management plan 2. Project Documents Updates: May include: Project schedule Stakeholder register 13.3 Manage Stakeholder Engagement (PMBOK Guide, p. 404) Managing stakeholders involves identifying and satisfying their needs, handling issues as they occur, and maintaining stakeholder engagement throughout the project life cycle. The intent is to increase support and reduce resistance by effectively managing CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

6 both positive and negative stakeholders. Project managers must be aware that stakeholder influence is at its greatest potential early in the project life cycle and decreases as the project proceeds. Effective stakeholder management decreases risk and increases the chances of project success. The project manager is usually responsible for managing stakeholders. Manage Stakeholder Engagement Inputs Tools Outputs 1. Stakeholder management plan 2. Communications management plan 3. Change log 4. Organizational process assets 1. Communication methods 2. Interpersonal skills 3. Management skills 1. Issue log 2. Change requests 3. Project management plan updates 4. Project documents updates 5. OPA updates Four Key Inputs for Manage Stakeholder Engagement (PMBOK Guide, p. 406): 1. Stakeholder Management Plan: Addresses the following: Methods and technologies for stakeholder communication The appropriate level of interaction for various stakeholders Strategies for involving stakeholders in the best possible way 2. Communications Management Plan: Described in Section , provides guidance on managing stakeholder expectations by addressing: Communication requirements Information to be communicated and who needs to receive the information Escalation process 3. Change Log: A change log documents all changes that occur during a project and records the expected impact on the triple constraint. This information must be shared with stakeholders so that there are no surprises PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

7 4. Organizational Process Assets: Organizational Process Assets that may influence stakeholder management include: Organizational communication requirements Issue management procedures Change control procedures Historical information on previous projects Three Key Tools for Manage Stakeholder Engagement (PMBOK Guide, p. 407): 1. Communication Methods: Historically, PMI has stated that face-to-face meetings are the preferred means for handling stakeholder issues. Described in Section (Plan Communications Management), communication methods include interactive, push, and pull approaches. During stakeholder engagement, these methods are used as appropriate. 2. Interpersonal Skills: Skills useful for managing stakeholders include the following: Building trust Resolving conflict Active listening Overcoming resistance to change 3. Management Skills: Management skills used by a project manager with stakeholders may include: Facilitate consensus on project objectives Build support through influencing skills Negotiate agreements to meet project needs Gain organizational acceptance of project outcomes Five Key Outputs for Manage Stakeholder Engagement (PMBOK Guide, p. 408): 1. Issue Log: Used to record new issues and resolution of previously existing issues. 2. Change Requests: Some stakeholder issues lead to approved changes, corrective actions, and preventive actions. CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

8 3. Project Management Plan Updates: Used to document changing stakeholder requirements, ineffective communication methods that are being replaced, and actions involving stakeholder concerns/issues. 4. Project Documents Updates: The primary document that may be updated at this point is the stakeholder register, especially if new stakeholders are identified or a stakeholder is no longer involved. 5. Organizational Process Assets Updates: Organizational Process Assets that may be updated include: Stakeholder notifications Project records, reports, and presentations Feedback from stakeholders Lessons learned from managing stakeholders 13.4 Control Stakeholder Engagement (PMBOK Guide, p. 409) Control Stakeholder Engagement is the process of monitoring stakeholder relationships and adjusting strategies as necessary. Control Stakeholder Engagement Inputs Tools Outputs 1. Project management plan 2. Issue log 3. Work performance data 4. Project documents 1. Information management systems 2. Expert judgment 3. Meetings 1. Work performance information 2. Change requests 3. Project management plan updates 4. Project documents updates 5. OPA updates 11-8 PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

9 Four Key Inputs for Control Stakeholder Engagement (PMBOK Guide, p. 411): 1. Project Management Plan: Contains the stakeholder management plan which must now be monitored as it is used to manage stakeholders (Section ). The following information may be used to control stakeholder engagement: Techniques for communication among stakeholders Human resources requirements: how roles, responsibilities, reporting, and staffing management will be accomplished Change management plan Which processes are applied to each project phase How work will be executed to accomplish objectives 2. Issue Log: As before, the issue log is updated if there are new issues and also whenever previous issues are resolved. 3. Work Performance Data: The initial measurements (raw data) of actual outcomes as work activities are accomplished. Data of interest to project teams may include: Actual durations and costs Actual start and finish dates Percentage of planned work actually completed Number of change requests Number of defects 4. Project Documents: Documents relevant to controlling stakeholder engagement include the: Project schedule Stakeholder register Issue and change logs Project communications CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

10 Three Key Tools for Control Stakeholder Engagement (PMBOK Guide, p. 412): 1. Information Management Systems: Provides standard tools for collecting, storing, and distributing information about costs, schedule, and performance to appropriate stakeholders. Examples of distribution formats include: Table reports Spreadsheet analysis Presentations Graphical, visual representations of performance data 2. Expert Judgment: Used to improve the identification of new stakeholders and to reassess relationships with current stakeholders. 3. Meetings: Used to exchange information about the status of stakeholder engagements. Five Key Outputs for Control Stakeholder Engagement (PMBOK Guide, p. 413): 1. Work Performance Information: The performance data previously collected through various control processes is now analyzed so that the actual status of the project may be accurately presented. Examples include: Cost and schedule status Status of change requests Status of deliverables Forecasted estimates for project completion 2. Change Requests: Analysis of performance may lead to change requests to deal with problems. Change requests should always be processed using integrated change control. Recommended corrective or preventive actions should be identified. 3. Project Management Plan Updates: As a result of interactions with stakeholders, almost any subsidiary management plan may be updated, including: Cost, schedule, and scope management plans Change management and communications management plans PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

11 Quality and requirements management plans Human resource, risk, and procurement management plans Stakeholder management plan 4. Project Documents Updates: Documents that may be updated include the stakeholder register and issue log. 5. Organizational Process Assets Updates: Organizational Process Assets that may be updated include: Stakeholder notifications Project records, reports, and presentations Feedback from stakeholders Lessons learned from managing stakeholders Other Topics: There are no other topics for this knowledge area. CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

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13 Self-Study Drill Practice: Stakeholder Management Question 1. List the processes for stakeholder management. 2. List six important stakeholder management activities. 3. What is the preferred method for communicating with stakeholders? 4. What is a method for classifying and ranking the importance of stakeholders? 5. What are the inputs and outputs for the process Identify Stakeholders? 6. Identify stakeholders is associated with which process group? 7. Name three advantages of involving stakeholders in project initiating steps. Answer 1. Identify stakeholders Plan stakeholder management Manage stakeholder engagement Control stakeholder engagement (p. 11-1) Note: All page numbers in this drill practice refer to the study guide unless otherwise indicated. 2. Identify potential stakeholders Assess interest, influence, and power Identify needs/expectations Develop management strategies Manage issues and conflicts Communicate (p. 11-1) 3. Face-to-face meetings (p. 11-7, tool #1, communication methods) 4. Power/Interest grid (p. 11-3) 5. Inputs: Project charter Procurement documents Enterprise environmental factors Organizational process assets Outputs: Stakeholder register (p. 11-2) 6. Initiating (p. 2-15) 7. a. Create a shared understanding of project success criteria b. Improve acceptance of deliverables c. Improve stakeholder satisfaction (PMBOK Guide, p. 55, paragraph #1) CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

14 8. What is a possible result of failure to deal with negative stakeholders? 9. Which process group aligns the expectations of stakeholders with the purpose of the project? Which stakeholder process is part of initiating? 10. Identify the inputs and outputs for Plan Stakeholder Management. 8. Increased chance of project failure (pp. 2-9, 11-1, 11-5/6). 9. Initiating; Identify Stakeholders is part of the initiating process group. (PMBOK Guide, p. 54; Study Guide, p. 2-15). 10. Inputs: Project management plan Stakeholder register Enterprise environmental factors Organizational process assets Outputs: Stakeholder management plan Project documents updates (pp. 11-4/5). 11. Identify the management response for each power/interest combination: a. High power/high interest b. High power/low interest c. Low power/high interest d. Low power/low interest 11. a. Manage closely b. Keep satisfied c. Keep informed d. Monitor (p. 11-3; course slide 11-2) 12. Distinguish customers from users. 12. Customers are the persons or organizations who will approve and manage the product, service, or result. Users are the persons or organizations who will use the product, service, or result. 13. Name the types of stakeholders the project team might identify. 14. As part of Plan Stakeholder Management, analytical techniques provide a way to compare planned levels of stakeholder engagement to actual levels. What five levels of engagement are possible? (PMBOK Guide, pp ) 13. Internal or external Positive or negative Performing or advising (PMBOK Guide, pp ). 14. Unaware Resistant Neutral Supportive Leading (p. 11-5; course slide 11-3) PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

15 15. What are the inputs and outputs for Manage Stakeholder Engagement? 16. Name four interpersonal skills useful for managing stakeholders. 17. Name four management skills useful for managing stakeholders. 15. Inputs: Stakeholder management plan Communications management plan Change log Organizational process assets Outputs: Issue log Change requests Project management plan updates Project documents updates OPA updates (pp to 11-8) 16. Building trust Resolving conflict Active listening Overcoming resistance to change (p. 11-7) 17. Facilitate consensus on project objectives Build support through influencing Negotiate agreements Gain acceptance of project outcomes (p. 11-7). 18. When is the potential for stakeholders to influence project outcomes at its greatest? 19. Match each stakeholder process to the appropriate process group: a. Identify Stakeholders b. Plan Stakeholder Management c. Manage Stakeholder Engagement d. Control Stakeholder Engagement 18. Early in the project life cycle. (p. 11-5). 19. a. Initiating b. Planning c. Executing d. Monitoring and controlling (p. 2-15). CMF Solutions and ESI July 2013 PMC:DJ4:EN:000 ver

16 20. What are the inputs and outputs for Control Stakeholder Engagement? 21. What is the primary purpose of Control Stakeholder Engagement? 20. Inputs: Project management plan Issue log Work performance data Project documents Outputs: Work performance information Change requests Project management plan updates Project documents updates OPA updates (p to 11-11) 21. Monitor stakeholder relationships and adjust strategies as necessary. (p. 11-8) PMC:DJ4:EN:000 ver.2.0 CMF Solutions and ESI July 2013

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