Stakeholder Management as the Underestimated Powerhouse of Project Success

At MVP Factory, we believe the key to successful product building lies not only in its tasks and timelines but fundamentally in the people involved and their engagement. In this article, we will highlight how we typically approach stakeholder management at MVP Factory in three steps. 

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The significance of an effective stakeholder management

Stakeholder management is deeply embedded in our approach, guiding our interactions and ensuring mutual understanding and respect at every level of engagement, especially when embarking on new projects or building new ventures.

‍It is a process that includes recognizing, comprehending, and actively involving individuals or groups affected by a project. By harmonizing their interests with the project's objectives, we are paving the way for successful results.

Understanding the diverse range of stakeholders is a lesson learned through hands-on experience over the years. Having worked on numerous projects, we've realized that every stakeholder, from project sponsors to end-users, brings a unique perspective and set of expectations that can significantly influence the project's direction. Overlooking any of these stakeholders can lead to unforeseen challenges and missed opportunities.

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Step 1: Uncovering the key players on the project

Before actively implementing a stakeholder management strategy in a project, it's essential to first identify the relevant stakeholders. To assist in this process, we consider the following four questions to help pinpoint the right individuals:

1. Who benefits or is impacted by the project?

It's fundamental to identify the primary consumers of your product, but it's equally important to consider who else might benefit from or be impacted by your project. Take, for instance, a project we worked on in the fashion industry, where we developed a tool providing insights on benchmarks and trends for buyers. The buyers were the main users, but we also found that the marketing team benefited greatly. They utilized the data to adjust their strategies according to the latest market trends, which in turn improved the business's overall alignment. Acknowledging and addressing the needs of both these groups was key to the project's success, ensuring the tool's wide-ranging relevance and utility.

2. Who holds influence or authority?

Reflecting on various projects, it's clear that this group can differ greatly. In a corporate environment, often executives or department heads hold significant authority over a project's direction and results. For example, at Stitch, an external regulatory body emerged as a major influencer, dictating the standards and guidelines we needed to adhere to. Understanding and engaging with such authorities was critical for navigating project challenges and ensuring compliance.

3. Who provides resources or expertise?

Identifying key resource and expertise providers is crucial in project management. In a project for a large FMCG company, we discovered that multiple departments held essential data vital for our product's development. These departments, each an owner of different sets of data, were instrumental in providing the information we needed to build a comprehensive and effective product. Their cooperation and input were fundamental to the project's success, highlighting the importance of recognizing and engaging with such internal resource providers.

4. Who might oppose or resist?

Recognizing those who may be resistant is also an important aspect of stakeholder analysis. During a digital transformation project we participated in, we encountered resistance from some long-standing employees who were hesitant about the new technology. Early identification of these concerns allowed us to engage with these employees more effectively, addressing their apprehensions and facilitating a smoother transition.

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Keep in mind that it's not always possible to identify every stakeholder at the beginning of a project. New stakeholders may emerge as the project progresses, ones that you couldn't have anticipated initially. It's important to conduct regular check-ins with your project team to reassess and possibly update the stakeholder list, ensuring that no critical players are overlooked as the project evolves.

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Step 2: Cluster stakeholders according to their engagement and influence level

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During a project, it is most of the time not feasible to track and involve each stakeholder individually. In our experience, the key to efficient management lies in strategically mapping stakeholders into specific clusters. This approach allows for the identification of tailored communication strategies for each cluster, ensuring a more organized and impactful engagement process. This framework is called a stakeholder matrix or map.

​​Stakeholder categorization typically involves understanding their level of engagement and influence:

Engagement Levels:

• Leading: Actively involved and deeply knowledgeable about the project's desired outcomes.
• Supportive: Understands the project's aims and supports its initiatives.
• Neutral: Aware of the project's goals but neither actively supports nor opposes them.
• Resistant: Comprehends the objectives but is resistant to changes.
• Uninformed: Lacks awareness or understanding of the project's goals.

Influence Levels:

• Highly Influential: Has significant power over crucial project decisions.
• Influential: Capable of influencing the actions of others within the project.
• Moderate: Regularly involved in the decision-making process.
• Minimal: Has a voice, but their opinions may not always carry weight.
• Least Influential: Participates at their discretion but has limited impact on decisions.

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By categorizing stakeholders into clusters, we can effectively tailor communication strategies to each group's unique characteristics and needs. Interviewing and assessing stakeholders, focusing on their influence and investment in the project, will help to sort them into meaningful clusters. When new to a company or working with a new client, initial stakeholder mapping might not be precise.

Try to engage stakeholders and team members with questions about their needs and challenges, and use your intuition as a starting point. Over time, you can refine your strategy through regular check-ins, adapting communication to better align with stakeholder needs. Maintaining transparency throughout this process fosters trust and is beneficial in the long run, ensuring that stakeholders are fully aware of and comfortable with their engagement.

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Step 3: Craft a communication strategy

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As the last step a communication strategy can be created for each stakeholder cluster:

Champion Stakeholders (High Influence + Leading/Supportive)

In our experience, these stakeholders are your project's foundation. They are often the primary endorsers or key customers. Engaging with them closely and regularly is crucial. At Nanell, frequent, in-depth discussions with champion stakeholders provided critical insights that shaped the project's direction.

Critical Stakeholders (High Influence + Uniformed/Resistant)

These stakeholders can be your project's toughest critics, yet their insights are invaluable. Aiming for understanding and appeasement is key. In one challenging project, we integrated feedback from critical stakeholders into our strategy, which greatly enhanced the project's outcomes and acceptance.

Supportive Stakeholders (Limited Influence + Leading/Supportive)

They might not have significant influence, but their support can be instrumental. Diverse communication channels, like email updates and regular meetings, work well for keeping them informed. Their positive outlook can be a source of motivation and advocacy within the wider organization.

Observer Stakeholders (Limited Influence + Uniformed/Resistant)

Regular updates to these stakeholders can help maintain harmony and might even pique their interest over time. In one of our projects, periodic newsletters and project summaries transformed observer stakeholders into active supporters.

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Developing a tailored communication framework involves several key aspects:

1. Allocating communication responsibilities: In one project, we assigned team members to specific stakeholder groups, ensuring consistent and personalized communication.
2. Determining optimal timing: Regular intervals for updates are crucial, but they must be balanced to avoid overwhelming stakeholders.
3. Choosing appropriate mediums: The communication medium, whether emails, meetings, or presentations, should match the stakeholder group's preferences.
4. Defining content granularity: The level of detail provided varies based on the stakeholder's involvement and interest. High-impact stakeholders often require more detailed updates than those less involved.
5. Purpose of communication: Aligning the intent of communication with stakeholders' priorities ensures that each interaction adds value and addresses their concerns or interests.

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Effective stakeholder management unlocks maximum project growth

In general individualized approaches yield the best results with high-impact stakeholders, whereas group strategies are more effective for wider audiences. It's important to remember that stakeholder communication is a team effort and should not rely solely on one individual.

As a team, regularly revisit and adjust your approach and strategy. While it may seem like a significant effort initially, remember that this investment pays back over time. Regular, brief check-ins allow for easy adjustments to your stakeholder clusters and communication plans. Utilize tools like Excel or engaging project planning tools for documenting and planning your communication strategies. 

Effective and well-planned stakeholder communication leads to happier stakeholders and, ultimately, a more successful project. Remember: Happy stakeholders = happy project work!

If you'd like to read more on how companies can tap into effective product building strategies to maximum results, check out our in-depth research on five catalysts for delivering a successful MVP.