The VaporPoint

Stakeholder Investment

Posted by Matt - 12/03/10 at 09:03:23 am

Thanks to Andy Burns for triggering this idea for a post. At a PMI chapter meeting recently, Andy was talking about being aware of the investment a stakeholder had in an estimate that was clearly far, far below what was necessary for the expected scope. This made me think a bit more about the human/communication side of project leadership. I have another post in the works on communication, but I’m more excited about this topic…it will just have to wait (as will you).

Stakeholders

First, we are thinking in the context of stakeholders. The PMBOK Guide, 4th Edition, defines a stakeholder as follows: Stakeholders are persons or organizations (e.g., customers, sponsors, the performing organization, or the public), who are actively involved in the project or whose interests may be positively or negatively affected by the performance or completion of the project. This is a fine technical definition, but I like to think about it a little more broadly. If somebody can make my day a really good one, or a really bad one, in the context of a project I’m leading, then they are a stakeholder. I need to care about them, even if they don’t show up in a box in a project charter document.

Investment

By definition, all stakeholders have some investment in a project. This investment could be real capital, intellectual capital, or even pride/reputation (they fought hard for it, so it’s gonna happen!). In Andy’s example, a key stakeholder had been instrumental in providing the original estimate. They were invested in the project budget coming in at or near the number they had put forward. Simply raising the issue with them that the project was going to be over-budget from the get-go would likely get an interesting response. Not knowing of this stakeholder’s investment could lead to some interesting conversations, and real issues in making progress in the ultimate resolution.

Being a project leader means recognizing these investments, and implicitly managing them.

Implications

Understanding stakeholder investment will usually impact your effort when something deviates from plan. Investment will drive expectations, which will ultimately drive stakeholder behavior. The nature of their investment will determine how they react when you communicate with them, especially if it is escalation of an issue. Not only will you avoid ‘uncomfortable’ conversations, you will also likely see improvements in the velocity of decision-making from those individuals.

Take-aways

• In your stakeholder analysis, be sure to identify all stakeholders, and what their investment is
• Make sure your communication plan effectively addresses stakeholder investment
• At escalation points, use your knowledge of investments to effectively communicate, accounting for the stakeholders’ investment, and how that is impacted by what you are communicating

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