5th Edition PMBOK® Guide—Chapter 13: Process 13.1 Identify Stakeholders


1.  Introduction

The first out of four stakeholder management-related project management processes is in the Initiating Process group, and is the process which identifies the stakeholders on the project even before the detailed planning stage of the project.  It not only identifies the stakeholders, but analyzes the relationships with them and what their level of engagement or interest in the project is and what their level of influence on the project is.  Both of these factors together determine what strategy to use when engaging them throughout the course of the project.

2.  Identifying Stakeholders

stakeholder is an individual, group or organization which may affect or be affected by the outcome of a project.   One way to identify stakeholders is consider three categories of stakeholders.    The first category of stakeholders to be considered are those within the project, i.e., the project team. The second category of stakeholders are those outside of the project, but within the organization. This group includes the sponsor, functional managers, and organizational groups. Then there is the third category that are outside of the organization. This group includes business partners, sellers or suppliers, customers or users, government regulators and possibly other entities as well.

So stakeholders may not necessarily be involved in the project, but their interests may be affected by the project either positively or negatively. It is important to take the negative stakeholders into account on a project. A local environmental group could be considered a negative stakeholder for a new refinery project for example, because they could protest against the project. A government regulatory authority might also be a negative stakeholder if the new project is found not to conform to governmental regulations.

Now there is a diagram of all the stakeholders in the 5th edition PMBOK® Guide page 31. The diagram was complete in that it listed all of the categories of stakeholders; however, it was a bit confusing because it lumped together all of the stakeholders that were external to the project itself, whether they were within the company or outside of it.

I think my way of dividing the stakeholders into three groups, internal to the project, internal to the organization, and external to the organization, is perhaps a bit better in helping understand how the various stakeholders can affect a project.

3.  Stakeholder Groups–expanded view

For an expanded view of these three groups, take a look at the following diagram representing categories of stakeholders on a project. The center circle in purple represents those stakeholders internal to the project that are actually working on the project itself. Those three circles outside of that in various shades of blue represent those stakeholders outside of the project, but within the organization; these include the sponsor, the program/portfolio managers, the functional managers and the managers of ongoing operations at an organization. The third category comprises the outer two circles in different shades of green which represent those stakeholders that are outside the organization: sellers, business partners, customers/users, and then regulatory agencies. There is a detailed explanation of each circle of stakeholders below the diagram.

Fig. 1. Categories of Stakeholders on a Project

  1. The innermost circle is that of the people actually working on the project, namely the Project Manager, the Project Management Team (the other members of the team that assist with the management of the project), and the Project Team members who actually do the work.
  2. The second circle is that of the Sponsor, the person or group that provides the financial resources for the project and the one who champions the project within the organization when it is first conceived. The Sponsor acts as a spokesperson to higher levels of management within the organization, which is why I placed the Sponsor in the second circle.
  3. The third circle contains those higher-level organizers of projects, such as the program manager, who manages related projects in a coordinated way, and a portfolio manager, who manages a collection of projects or programs which may not be related in content, but which all serve the business model of the organization at large. I put them in this circle because they monitor the performance of the project and can even terminate it if the business case for the project no longer holds.
  4. The next circle is still within the organization, but rather than the three inner circles that deal with project work, this circle represents the interests of the ongoing operational work, with the functional managers in charge of areas such as human resources, finance, accounting, and procurement. Depending on the type of organization, project managers will have to negotiate with them to allow their staff with expertise that would assist the project to work on that project for its duration. The operations management people will have to be consulted during the course of the project, because the project when completed is often handed off to them on account of the fact that they take care of normal operations and will provide long term support for the result of the project.
  5. Now we get to the circle which is outside of the organization, but one in which there is a business relationship between the organization and that stakeholder, such as business partners that may have a financial interest in the project, sellers/suppliers in the case of a B2B relationship, customers/users in the case of a B2C relationship
  6. The last circle consists of elements of society that may not have any formal relationship to the organization, but which may contain groups that are affected by the project or that can influence the project. The PMBOK® Guide labels this group generically as “Other Stakeholders”, but I have put an example of “Regulatory Agencies” as just one type of entity that could be considered a stakeholder. A non-governmental organization such as an environmental awareness group that is an NGO would also be an example of a stakeholder at this level.

These concentric circles, I believe, show a little more of the different kinds of stakeholders and why some of them have more influence than others. I found this diagram helpful for our group to gain awareness of the different types of stakeholders, and I hope that it is helpful for those studying for the PMP exam as well.

4.  Inputs of 13.1 Identify Stakeholders

The inputs come from the project charter, which can identify some of the parties related to the project, as well as procurement documents, since suppliers are one category of stakeholders.    EEFs can draw upon experience in the industry at large, and OPAs can draw upon the company’s own past experience on previous projects.

13.1  IDENTIFY STAKEHOLDERS
INPUTS
1. Project Charter Provides information on internal and external parties related with the project and affected by the result.
2. Procurement Documents If the project is itself a procurement for another organization, then the buyer is a stakeholder.  If the project requires procurements from other organizations to be completed, then the supplier or seller is a stakeholder.
3. EEFs
  • Organizational culture (what management positions are stakeholders?)
  • Government and industry associations (identifies promulgators or regulations or industry guidelines as stakeholders)
  • Global, regional, local trends (guides identification of stakeholders)
4. OPAs
  • Stakeholder register templates
  • Stakeholder register from previous, similar projects
  • Lessons learned from previous projects
TOOLS & TECHNIQUES
1. Stakeholder Analysis Determines interests and influence of stakeholders on the project.  Identifies stakeholder relationships that may be influenced.
2. Expert Judgment Complete identification of stakeholders can be assisted by the following experts:

  • Upper management
  • Other organizational units (in functional organization)
  • Other project managers or PMO (in projectized or matrix organization)
  • Subject Matter Experts (SMEs) in business or project area
  • Industry groups or consultants
  • Professional and technical associations
  • Regulatory bodies, non-governmental organizations (NGOs)
3. Meetings Profile analysis meetings are used to develop understanding of major project stakeholders.
OUTPUTS
1. Stakeholder Register Contains details concerning stakeholders, including:

  • Identification information
  • Assessment information
  • Stakeholder classification (internal/external, etc.)

5.   Tools & Techniques of 13.1 Identify Stakeholders

Once the main categories of stakeholders are identified by the inputs (from project charter and stakeholder documents, in addition to stakeholder registers from previous, similar projects), the complete list of stakeholders can be rounded out by means of expert judgement from various sources internal to the organization (e.g., upper management) and external to the organization (e.g., industry associations, consultants, or SMEs in the project application area).

Once a complete list of stakeholder is obtained, the main tool of stakeholder analysis is used to figure out how much power or influence each stakeholder has on the outcome of the project, and also their interest in the outcome of the project.   In general terms, each stakeholder will have relatively high or low power, and high or low interest in the project.    The intersection of these two factors yields the matrix below.

Those stakeholders with low power, and low interest are put on a watch list, to see if they change during the course of the project.   Those with low interest, but high power are kept informed; those with high interest, and low power are kept satisfied; those with high power AND high interest are managed or engaged closely throughout the project.

This matrix has some visual affinity with the risk matrix, with certain events having low or high impact, and low or high probability.    There is also some conceptual affinity, because in a way a stakeholder can also impact a project in the same way that an event can, both in potentially positive AND negative ways.   The first level of stakeholder analysis then is to give a broad qualitative analysis of the stakeholder’s power and interest so that the broad strategy of engagement can be determined.

6.   Outputs of 13.1 Identify Stakeholders

The identification of stakeholders goes into the Stakeholder Register, which then includes the classification of the stakeholder (see paragraph 3 above with the concentric categories of stakeholders described), and then the assessment of the stakeholder which is the results of the stakeholder analysis done in the project.    Analogous to the way that the risk register is elaborated in subsequent risk management processes, the stakeholder register is elaborated in subsequent stakeholder management processes.

The next post goes into the first detailed planning process involving stakeholder management, process 13.2 Plan Stakeholder Management which has, as its objective, the production of the Stakeholder Management Plan.   

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