Stakeholder management​

Background

Here at SME Water, one of our core values is ‘Partner’, which we define as ‘We develop lasting partnerships with clients and face challenges together.’

Our partnerships are based on the personal relationships we build with our clients, but ensuring we have the processes in place is integral to the long term success of our projects. With a diverse portfolio of projects, it is vital that we have a standard approach to stakeholder engagement, that we understand best practices, and that we plan and implement our stakeholder engagement activities effectively.

This post provides a summary of the process we use to ensure we get our client engagement right, to continue building partnerships and being the driving force for change in the water industry.

Stakeholder management at SME Water

Stakeholder management is a critical component to the successful delivery of any project. To ensure we get this right for our clients we have developed a 4-step process:

Figure 1 The four steps of stakeholder management 

As highlighted in the figure above, Stakeholder identification, categorisation and engagement planning make up the steps to conduct a stakeholder analysis. Our practice is to conduct a thorough stakeholder analysis at the start of each project to help answer the following key questions:

• Who will be impacted?
• How will they be affected?
• What are their needs?
• How should the project engage with them?

Effective stakeholder analysis at this point ensures that there is consistent awareness and understanding throughout the team about the nature of the stakeholders related to the project. This enables them to focus their efforts on the most critical relationships and allows project managers to tailor their communications and activities appropriately. A good stakeholder analysis can be beneficial in the long term as it can be reused for future projects.

In the absence of a thoroughly conducted stakeholder analysis, there is a significant risk that important project requirements may be missed and project communications can become highly reactive rather than proactive. This inevitably results in anxious stakeholders and reduces their confidence in both the success of the project and delivery team.

Stakeholder identification

According to ISO 215000:2012 Guidance on Project management:

“A stakeholder is an individual, group, or organization who may affect, be affected by, or perceive itself to be affected

by a decision, activity, or outcome of a project.”

We always begin our projects by making a list of stakeholders. We tend to use the following sources to do this:

• Existing project documentation e.g. project proposals, business cases, RACI/RASCI etc.
• Organisation documentation e.g. organisation charts, user lists, process maps, UI diagrams etc.
• Stakeholder identification interviews with project managers, project sponsors, SMEs etc.

In our experience, stakeholder interviews can be highly effective and it’s worth taking the time to be systematic and thorough at this stage. This involves asking the following broad questions:

• What teams in your business will be impacted by the project?
• What do they already know about the project?
• Are they currently supportive of the change?
• What is the best way to communicate with these stakeholders?
• What do these stakeholders need to ensure this project is a success?
• Are there any key influencers who need to be engaged?

The following stakeholders are often overlooked on projects, so we take extra care to identify and include them:

• Management (especially middle management)
• Governance groups
• Business support teams (usually internal teams e.g. GIS or IS teams)
• Suppliers
• Relevant external bodies
• Once we have identified our stakeholders, the next step is to categorise them.

Stakeholder categorisation

Mendelow’s Matrix is a tool that we use to consider the attitude of our stakeholders. We analyse our identified stakeholders based on their:

• Power – the ability to influence project outcomes and resources, and
• Interest – how interested they are in the project succeeding.

In order to do this, we categorise each stakeholder as either high or low for each measure:

Power

Interest

Once we have assigned a power and interest category to each stakeholder, we can then place them on a quadrant (as shown in the figure below) on Mendelow’s Matrix and then begin thinking about how we may engage with each group. 

Figure 2 Mendelow’s matrix – used to categorise stakeholders with examples 

Stakeholder engagement planning 

Once we have identified and categorised our project stakeholders, we are now able to begin creating a strategy and plan for engaging with them. We begin the engagement planning phase by using the following broad engagement strategies assigned to each quadrant: 

Figure 3 Engagement strategy for each stakeholder category 

 We then consider the following points to formulate a detailed engagement plan for each of our stakeholders: 

• Stakeholder participation – How much engagement is required? 
• Stakeholder management – How should their concerns be prioritised? 
• Communications – How frequently and to what level of detail should they communicate? 
• Project impact – What impact will the project have on their day-to-day job?
• Training – What level of training, if any, will they require? 
• Business readiness and support – How can they assist and support the project to land successfully within the business?

The table below provides an example of an engagement strategy for a project for each stakeholder category: 

Figure 4 Stakeholder engagement strategy for each category 

 The detailed strategy above allows us to determine how often each stakeholder should be engaged, for example, who should be included in meeting minutes, who needs to be trained, who needs to stay informed etc. Going into this level of detail early on in the project ensures we get our communications strategy right and that we understand the priorities in addressing concerns when they occur. 

This concludes the steps required to conduct a stakeholder analysis. Once the project begins, it is essential to hold periodic reviews to ensure the stakeholder analysis remains up to date. The stakeholder analysis is a live document throughout the life of a project and is one of our key indexes used to measure project performance and project success. 

Summary 

We have been through the general approach we take to conduct a stakeholder analysis at the start of a project. This approach is especially useful on projects which involve some form of business change as it allows the project team to monitor changing attitudes throughout the life of the project. 

We are a big advocate of instilling standard processes and systems to ensure best practices. We have incorporated our stakeholder engagement approach, summarised above, into our standard project management process to ensure we maximise our chances for success on each project. We are confident that this allows us to continue developing lasting partnerships with our clients to face the current and future challenges in the water industry together.