Stakeholders: who they are (Part 1)

Stakeholders are those who are actively involved in a project or business, whose interests may be influenced by the success or failure of the project, as well as those who due to their position or authority can influence the project themselves. All these people should be identified and an individual approach should be developed for each of them. Project Manager should learn how to manage stakeholders, influencing them so that the project flourish and doesn’t meet any opposition.

Surely, that’s not easy. To take into account the views of different parties, including those that obviously not expressed, to reconcile diametrically opposed interests not forgetting about the goals of the project itself — this is top of the line. Besides, don’t forget these people occupy much higher positions inside and outside the project and have much more influence than the manager.

Internal and external, primary and secondary stakeholders

Who are the primary and secondary stakeholders? The primary ones are the closest circle of the project: founders, investors, team, partners and support-group. These people have a direct impact on the project.

Secondary stakeholders are the second most important environment of the project. However, there may be very powerful forces: representatives of the authorities, the media, civil societies, private activists. For instance, a municipal official may have never heard about your project and be indifferent to it, but one of his resolutions may cut off your oxygen whereas one successful publication in a large media can cause a wave of interest in your product.

Internal stakeholders are the team, top-managers, the board of directors, and shareholders. Their interests may not coincide on closer examination and that complicates the whole picture. An employee wants more money, the manager wants to reduce spending, and the shareholder wants more controls.

External stakeholders have the most “egoistic” interest — how the company affects the community or a part of the community. The act for their own purposes, somehow influencing the project fate.

Why do we need to take into account stakeholders specific interests?

• To avoid any occasional problems
• To know who to bet on in the development of the project
• To know where to take precaution
• To have a list of people to contact in case of an attack from “powerful opponents” of the project.
• To have a personnel reserve from a loyal group.

Typical stakeholder groups

Owners, shareholders and investors

The main and most influenceable stakeholder of the project is the shareholder (business owner). Shareholders buy a share in the project and want the company to develop and bring them more and more income. These are supporters of the project.

Project-managers and employees

Top-managers are interested in the prosperity and growth of the company. To implement their plans they take responsibility, get power and authority. Employees, in contrast, are people that are more passive because the growth of the company promises them stress, changes and overworking. With a position at a respectable company and a decent salary, employees will be loyal and wont “hurt” the process.

Suppliers of goods and services for the project

Suppliers of raw materials, spare parts, consumables root are also rooting for us, because obviously we bring them money. The same situation is with creditors — it is important for them that everything is good with the project.

Buyers

A product (or a project) has a so-called final stakeholder, a buyer. In B2C it’s just a person who likes a product or service. In B2B, these are dealers, partners and retail. In general, these are loyal allies too, but with varying degrees of influence.

Government and public institutions

The authorities are also formally interested in product growth because business supplements the budget, gives jobs and improves statistics. Everything is more difficult with public organizations.

Their principle is gathering against something while business principle is gathering for something. Here we are. An unavoidable conflict of interests. That’s why it is necessary to consider the public opinion to interact with them, even with spontaneous ones.