Stakeholder Engagement Process: 6 Steps Explained

The stakeholder engagement process is essential for maintaining strong relationships with primary and secondary stakeholders that can impact or are affected by a project. So in this article, we’ll explore 6 steps of the stakeholder engagement process.

What Is a Stakeholder?

A stakeholder is any individual, group, or organization that has an interest in, can affect, or is affected by the outcomes of a project. Furthermore, Stakeholders are directly involved in the project, impacted by it, or have the authority to influence its direction. They can be internal, such as project managers, team members, sponsors, functional managers, and executives, or external, such as suppliers, customers, inventors, and regulatory bodies. However, understanding and managing stakeholder relationships effectively is crucial, whether they are internal or external.

Stakeholders are a fundamental part of any project because their influence, expectations, and engagement can directly impact the success or failure of the project. By identifying stakeholders in the initial stage of the project, the project manager can understand their needs and keep them engaged through consistent communication and involvement. Furthermore, you can ensure that your projects meet both business objectives and stakeholder expectations.

Stakeholder Management VS Stakeholder Engagement

Stakeholder management is the process of identifying, analyzing, prioritizing, monitoring, and controlling stakeholders to meet project objectives. It mainly focuses on effectively managing relationships with stakeholders to ensure that their expectations and interests align with the project’s goals. Furthermore, stakeholder management involves strategies to influence stakeholders’ attitudes, reduce conflicts, and maintain positive relationships throughout the project life cycle.

Stakeholder engagement refers to managing stakeholders’ expectations. It mainly focuses on actively involving them and ensuring meaningful participation throughout the project. This involves regular communication, collaboration, feedback, and fostering trust. Therefore, the primary goal of stakeholder engagement is to create strong relationships where stakeholders feel valued and are motivated to contribute positively to the project.

In short, stakeholder management and stakeholder engagement are closely related, but they differ in focus and approach.

Stakeholder Engagement Process in Project Management

The stakeholder engagement process is essential for maintaining strong relationships with primary and secondary stakeholders that can impact or are affected by a project. It involves implementing strategies and actions to promote the productive involvement of stakeholders. Stakeholder engagement activities begin before or when the project starts and continue throughout the project lifecycle. Let’s explore the 6 steps of the stakeholder engagement process.

Identifying Stakeholders

This is the first step of the stakeholder engagement process. Stakeholders can be internal or external. Some stakeholders are easy to identify, such as the sponsor, customer, project team, and end users, however other stakeholders, such as suppliers can be difficult to address when they are not directly connected to the project. As a project manager, you’re responsible for identifying the right stakeholders to ensure that everyone with an interest or influence in the project is considered.

Here are some key activities of this step.

Stakeholder identification: Collect a list of individuals, groups, or organizations that may be affected by or have an impact on the project.
Stakeholder register: Create a stakeholder register that captures key information about each stakeholder, such as role, power, interest, influence, contact details, and other essential details.

Pro tip💡 As a project manager, you can use some tools and techniques during this step, such as brainstorming and organizational charts. As a technique, brainstorming will help you collaborate with the project team to identify stakeholders. As a tool, organizational charts will help you review internal and external organizational structures to uncover key stakeholders.

Understanding Stakeholders

This is the second step of the stakeholder engagement process. After identifying stakeholders, the project manager and team members should try to understand stakeholders’ feelings, emotions, and values. These characteristics can lead to additional threats and opportunities for the project and its outcomes. Remember💡 Understanding and analyzing stakeholders is an ongoing action.

Analyzing Stakeholders

This is the third step of the stakeholder engagement process. After understanding stakeholders, you need to analyze aspects of each stakeholder’s position and perspective of the project. Analyzing stakeholders considers several stakeholder aspects, such as power, interest, beliefs, attitudes, experiences, degrees of influence, interest in the project, etc. This analysis helps prioritize stakeholders and tailor engagement strategies according to their level of influence and needs.

Here are some key activities of this step.

Classify stakeholders: Categorize each stakeholder based on their interest and influence in the project. High-influence, High-interest stakeholders need more attention than Low-interest, Low-influence stakeholders.
Understand interests and expectations: Gain insights into stakeholders’ expectations, concerns, and how they measure project success.

Pro tip💡 As a project manager, you can use some tools and techniques during this step, such as a stakeholder analysis matrix and power-interest grid. The stakeholder analysis matrix can assess expectations, needs, and influence of stakeholders and guide the engagement strategy. As a tool, the power-interest grid helps categorize stakeholders into four groups: high power/high interest, high power/ low interest, and low power/low interest.

Prioritizing Stakeholders

This is the fourth step of the stakeholder engagement process. Every project often involves many stakeholders for the project team to engage directly and effectively with all of them. Based on stakeholder analysis, the project team can complete an initial prioritization of them. It is common to focus on stakeholders with the most interest and power as one way to prioritize engagement. However, the project team may need to reprioritize based on evolving changes or new stakeholders as required.

Pro tip💡 As a project manager, you can develop a stakeholder engagement plan to outline how you will communicate with and involve stakeholders throughout the project lifecycle. It defines the purpose, methods, and frequency of communication for each stakeholder group and specifies who will be responsible for stakeholder interactions.

Read More: RACI chart in project management

Engaging Stakeholders

This is the fifth step of the stakeholder engagement process. Stakeholder engagement involves working collaboratively with stakeholders to introduce the project, manage expectations, negotiate, resolve issues, problem-solve, and make decisions. However, to effectively engage with stakeholders, you should have soft skills, such as active listening, interpersonal skills, and conflict management.

As a project manager, you can communicate with stakeholders by using written or verbal communication, which can be formal or informal.

Communication methods include push, pull, and interactive communication, which helps project managers maintain better relationships with their stakeholders. However, with all forms of communication, quick feedback loops provide helpful information to:

Confirm the degree to which stakeholders heard the message and determine if stakeholders agree with the message
Gain helpful insights

Monitoring Stakeholders

This is the sixth step of the stakeholder engagement process. Stakeholder needs and attributes may change throughout the project. Therefore, it is essential to continuously monitor the effectiveness of stakeholder engagement and make adjustments as required. By regularly assessing stakeholder satisfaction project managers can refine their communication and engagement strategies to meet evolving expectations.

Here are some key activities of this step.

Monitor stakeholder reaction: Tracks stakeholder responses to project updates, communication, and decisions.
Identify issues proactively: Act quickly to resolve any issues or concerns raised by stakeholders to maintain their support.
Adjust engagement strategies: Modify the engagement approach, if stakeholder engagement efforts are not yielding the desired results.

As a project manager, you can use tools and techniques during this step, such as stakeholder satisfaction surveys, issue tracking, and change log.

Important💡 Defining and sharing a clear vision at the start of the project, project managers can enable good relationships and alignment throughout the project lifecycle. Establishing a clear vision that key stakeholders, such as the project sponsor, customers, team members, senior management, supplies, and vendors agree on can entail some challenging negotiation, especially with stakeholders who are not necessarily in favor of the project or its outcomes. The steps of the stakeholder engagement process will help you engage with them effectively.

Conclusion

The stakeholder engagement process is essential for maintaining strong relationships with primary and secondary stakeholders that can impact or are affected by a project. Identifying, understanding, analyzing, prioritizing, engaging, and monitoring stakeholders are steps of the stakeholder engagement process.