Visualizing stakeholder influence--two Australian examples

overcoming the effort-boxing constraint

DEREK H.T. WALKER, Professor of Project Management and Program Director, RMIT University

(ABSTRACT)

This paper introduces and illustrates a tool, the Stakeholder Circle™, for measuring and visualizing stakeholder influence on managing projects drawing upon two case study examples. Development of the tool was based upon stakeholder and project management theory and it extends our appreciation of the potential impact that stakeholders may exert that unearths vital risk management and customer relationship implications for the project management profession.

Using a case study and action learning approach, this paper draws upon emerging project management and wider strands of management decision-making literature. The paper is exploratory in nature and the case studies used provide a useful vehicle for reflection and sense making.

Keywords: management styles; stakeholders; project management; risk management

©2006 by the Project Management Institute Vol. 37, No. 1, 5-21, ISSN 8756-9728/03

Introduction

Stakeholders and the influence that they can exert upon project management teams are variable and poorly understood. For example, it is easy to see how a major stakeholder such as the paying client or customer can make or break project success through positive supportive or negative reactionary behavior. It is less easy to visualize the way in which this level of behavior can influence operational management of delivering projects. At the less visible end of the stakeholder continuum are hidden stakeholders with little apparent influence, but strong connections that turn innocuous power into a real threat or strong support. For example, the favorite daughter of a powerful politician on the planning committee of a local council has a house close to where a proposed entertainment complex is to be built. This one individual, through unseen power and influential links, is capable of causing major disruption to the development if she has concerns about its impact upon her and other residents.

Previous papers (Bourne & Walker, 2003; Bourne & Walker, 2005) have explained in more depth how stakeholders might influence the outcome of projects and illustrated how they can be identified and their power and influence measured. In these papers, the authors argued that project managers are required to develop robust relationships with project stakeholders to ensure successful delivery of project outcomes. This requirement calls for a set of skills beyond managing and leading that enables the project manager to work within the cultural and political environment of the organization to ensure greater organizational support for project success.

This paper describes the results of two case studies undertaken as part of a Doctor of Project Management research project. These case studies examine a construction project and an information and communications technology (ICT) business project undertaken within the same organization and affecting the working environment of a common group of people. The results of the research suggest that the “correct” approach to engaging stakeholders is different for every project, even when the stakeholders are the same.

The case studies used the Stakeholder Circle™ to identify, prioritize, and visualize the relative influence of each stakeholder. This tool implements a straightforward methodology that allows any project team to make a meaningful assessment of its stakeholders and understand their relative power and influence. An interpretation of these results in the project environmental and organizational context also provides some interesting insights into the relative importance of the same stakeholders in each project, the project team's view of their influence, and the difference between the behaviors of the stakeholder community.

This paper describes the methodology that underpins research into the nature of relationship management in projects. The paper is organized in the following way: first, a brief rationale for the research is presented, followed by a discussion of stakeholder theory. This is followed by a section that defines the methodological framework of identification and prioritization of project stakeholders leading to development of the Stakeholder Circle™. The next two sections describe the case studies—both the organization itself and the two projects that formed part of the research in that organization. This is followed by discussion of the case study in terms of the visualization tool. The next section is focused on the implications for the theories of stakeholder identification and engagement that arise from the findings of the research. Finally, conclusions are presented that summarize core issues.

Why Study Stakeholder Influence?

Organizations change constantly; a project's stakeholder set will change as stakeholders change roles within the organization, move into different roles, or leave the organization to take up roles in other organizations. For whatever reason, the ability of individual stakeholders to influence the project may increase or decrease. Most project management methodologies define ways to identify project stakeholders, and then base their entire communications strategies on this initial, and only, identification. Many projects fail because stakeholders do not continue to support the vision or objectives of the project. In many cases, this is because the team does not recognize changes in the relative power or position of key stakeholders and fails to make appropriate adjustments in its stakeholder management activities.

The research reported upon in this paper is focused on support for project managers in building and maintaining relationships with project stakeholders. This is accomplished through using a practical methodology that allows the project team to identify and prioritize the project's stakeholders and then through understanding the reciprocal needs—the project's needs of the stakeholders and the stakeholders’ needs of the project—to develop an appropriate relationship management strategy.

The underlying assumption for this research is that stakeholder management is extremely difficult; the project manager and his or her project team members must identify, engage, and sustain relationships with a diverse set of groups and individuals (including themselves) that can impact the project in many ways. The research also investigated the effectiveness of a methodology and tool—the Stakeholder Circle™—in supporting the project manager and project team in managing the project's relationships. The Stakeholder Circle™ is described later in this paper as are the Stakeholder Circle™ visualizations developed for the two case study projects.

The research developed six case studies from five medium-sized organizations on IT and construction projects. This paper reports on two of these case studies. Further papers will report on the effectiveness of the Stakeholder Circle™ to other organizations participating in the research.

Stakeholder Theory

Stakeholders have been described variously as “the guy who holds the beef” (Dinsmore, 1999), those who have an interest (Boddy & Buchanan, 1999), as being essential in “people-oriented project cultures” (Vaupel, Schmolke, & Andreas, 1999), and as being essential at all points in the project from “initiation” to “closeout” (Cleland, 1995).

The methodology underpinning the Stakeholder Circle™ uses the idea of reciprocity and continual assessment to ensure that stakeholders’ expectations and needs are known, recognized, and incorporated into the management of the relationships. The aforementioned stakeholder theory authors have argued that relationships with an organization's entire network of stakeholders are essential for its long-term survival. While the focus of the research described in this paper is on the contribution of relationship management to project success for the life of the project, it is important to understand that relationships do not begin and end with the initiation and closure of a project, but are continuing aspects of the life of a professional project manager.

It may be necessary to consider what a stakeholder's stake actually is when trying to define what his or her needs or requirements are or how he or she could impact the project. According to Carroll and Buchholtz (2000, p. 65), a stake could be an interest, a right, or ownership. An interest is a circumstance in which “a person or group will be affected by a decision; it has an interest in that decision.” A right is either a “legal right when a person or group has a legal claim to be treated in a certain way or to have a particular right protected” or a “moral right.” ownership is a circumstance “when a person or group has a legal title to an asset or a property” (Carroll & Buchholtz, 2000, p. 65). Most project stakeholders will have an interest, many will have a right—people with a disability or citizens with a right to privacy, and some will have Ownership as in a worker's right to earn a living from his or her knowledge or shareholders in an organization.

The definition of stakeholder that will be the basis for research into relationships is: Stakeholders are individuals or groups who have an interest or some aspect of rights or ownership in the project, and can contribute to, or be impacted by, the outcomes of the project.

Understanding of the different types of stake, and thus expectations, that stakeholders may hold, is reflected in the different perspectives offered by stakeholder theory (Bourne & Walker, 2005). Social science stakeholder theory tends to focus around concepts of justice, equity, and social rights having a major impact on the way that stakeholders exert moral suasion over project development or change initiatives (Gibson, 2000). Instrumental stakeholder theory holds that stakeholders and managers interact and the relationship is contingent upon the nature, quality, and characteristics of their interaction (Donaldson & Preston, 1995). This view implies a need for negotiation, and expects reactions ranging from standoff to mutual adjustment, depending on such intermediate variables as trust and commitment, or motivational forces (being harmonized or in conflict). Jones and Wicks (1999) offer a convergent stakeholder theory that explains stakeholder actions and reaction to change in these terms, much of which leads to a need for project managers to strive to develop mutual trusting and cooperative relationships with stakeholders and that their actions should be morally based on ethical standards.

What becomes clear, whatever philosophy one holds regarding stakeholder theory, is that “legitimate and valid” stakeholders need to be identified and their power and influence understood so that their potential impact on the project can be better managed. Appropriate strategies can then be formulated and enacted to maximize a stakeholder's positive influence and minimize any negative influence. This becomes a key leadership and risk management issue for project managers. Failure to appreciate this has led to countless project failures as has been detailed in the literature, for example in Morris and Hough (1993) and Drummond (1998).

Briner, Hastings, and Geddes (1996) identified four sets of stakeholders: client; project leader's organization; outside services; and invisible team members. Figure 1 provides a generic stakeholder model that helps visualize where stakeholders may emerge from (Walker, 2003, p. 261).

Table 1 summarizes a small (and random) selection of methodologies developed by individuals, companies, universities, and government bodies for stakeholder identification and management.

Generic stakeholder model (Walker, 2003, p. 261)

Figure 1: Generic stakeholder model (Walker, 2003, p. 261)

As a first step in assessing the potential impact of a stakeholder's interest in terms of contributing to project success, the product of an interest-strength and its influence-impact potential (as used in risk management assessments) may provide a useful form for visualizing these two dimensions of stakeholder interest. This simple idea is illustrated in Table 2. From the stakeholder perspective they have a vested interest in the project's success that varies in intensity from very low to very high. Also the impact of that interest can be assessed in terms ranging from very high to very low.

This provides one means by which a stakeholder interest intensity map can be developed. It can also be segmented as seen in Table 2 and can be applied to a subset of stakeholders. This stakeholder interest intensity map illustrates a facilities management system development. This could be useful in designing strategies for commitment to a policy of sustainable development for example, or help in developing a knowledge management system. The “impact” part of the index relates to the power that these individuals may have to exert influence. Their influence is bounded by their source of power.

The Importance of Stakeholder Engagement for Project Success

The critical importance of stakeholder engagement and alignment of stakeholder goals and vision has been well established (Christensen & Walker, 2003; Cooke-Davies, 2000). By providing more project managers with a methodology and a tool to better visualize potential stakeholder impact, it is possible to ensure a greater set of potential responses of project managers to the environment they need to operate in (Cooke-Davies, 2000, p. 211).

Stakeholder engagement is a formal process of relationship management through which companies, industries, or projects engage with a set of stakeholders in an effort to align their mutual interests, to reduce risk and to advance the organization's economic advantage.

Project relationships can be best defined by the relationships between the project manager and the project stakeholders. These relationships are also defined as “lookings” by Briner, Hastings, and Geddes (1996) and as “directions of influence” by Bourne and Walker (2003), and they focus on how different stakeholders—including senior management, project team members, and users—have different expectations of the project and different definitions of success, and therefore require different methods of management. Briner et al. (1996, p. 12) have defined the role of “project leader” as a combination of management of stakeholders, management of the project life cycle, and management of the performance of individuals involved in the project. This concept has been further refined to become the project environment, a seven-element framework as the network or “sphere of influence and support” on which a project depends for its very existence (Bourne, 2004). It represents all the relationships within and around the project.

Methodology Individual, Group or Organization Comments
Stakeholder Identification and Management (without categorization) (Elliot, 2001), (Svendsen et al., 2004) http://www.cim.sfu.ca/ (Thomsett, 2002) The methodologies are robust and can be effective in an environment that supports performance management and planning
Definition of categories of stakeholders (Savage et al., 1991) Four generic types — supportive, mixed blessing, no-supportive, marginal
  (Mitchell et al., 1997) Eight-part stakeholder typology based on assessments of the strengths of three attributes, power, legitimacy, and urgency
Comprehensive stakeholder identification, assessment, and engagement (Cleland, 1999) Identify stakeholders and their interest, measure this interest, attempt to predict stakeholder's future behavior and its impact on the project and project team
  (Briner et al., 1996) Focus on communication as important part of stakeholder management
Focus on enhancing economic value and organizational wealth as well as recording what stakeholders require from the project (Fletcher et al., 2003) A process for mapping stakeholder expectations based on value hierarchies and key performance areas (KPA)
    An analysis of ways organizations can plan their stakeholder management strategies, rather than response strategies
  (Veil & Turner, 2002) A more holistic process of identification, assessment of awareness, support, influence, culminating in development of a stakeholder knowledge base
Stakeholder Circle™ visualization tool and methodology (Bourne & Walker, 2005) Continual process for identification, prioritization, engagement strategy for developing long-term relationships

Table 1: A selection of methodologies for identification and management of stakeholders

Figure 2 defines what a project manager must do to manage stakeholder relationships for project success. The project manager must manage the processes to develop the plans, schedules, reports, lessons learned, and forecasts that will serve as communication devices to everyone who has an interest. This is Dimension 1 looking forward and backward.

The project manager must also self-manage, from the point of view of personal discipline, but also from the point of view of having needs and wants that must also be met through successful completion of the project. This aspect of stakeholder management—looking inward—is often neglected. If the project manager's needs and wants have not been satisfactorily delivered, it cannot be termed a successful project, because all stakeholders have not had their interests fulfilled. Looking outward, managing the needs of clients, suppliers and users, requires a mix of management and leadership. Looking downward, requires considerable leadership skills to motivate followers and ensure all team members have their needs and wants satisfied. Looking sideward and upward, managing relationships with peers and senior management respectively, also require acute leadership skills. Looking inward, outward and downward, sideward and upward are Dimension 2 skills (Bourne & Walker, 2004, p. 228).

Dimension 3 in Figure 2 focuses on satisfying the needs and wants of important project stakeholders that require skills beyond management and leadership. These Dimension 3 skills demand significant interpersonal skills that call upon flexible and appropriate responses to situations when these stakeholders threaten the success of the project. It requires the project manager and his or her team to operate within the organization's culture and “politics,” managing stakeholders’ needs and expectations in a creative way.

Understanding the power environment within the organization and the position of the actors within it for particular issues is crucial (Lovell, 1993). With experience, this understanding is developed through a combination of conscious and intuitive, almost instinctive, thought processes leading to action. It occurs through changing situations and adapting attitudes to be more in line with the project's goals (Block, 1983). This sounds deceptively simple, but requires knowledge of the environment and all the “players” in this process and what their drivers (needs and wants) are. The methodology described in the previous section shows who is important, what the relative importance of these stakeholders are, what their needs are, and what the project needs from these groups or individuals to be successful.

Stakeholder Interest Stakeholders Vested Interest Intensity Index (ViII) Value
For Developing a Facilities Management System 1 2 3 4 5 6 7 8 9 10
Develop team's skill base VH H N N L VL H VH L N
Sustainable development                    
Linkages to procurement data base of suppliers/contractors                    
Demonstrated lessons learned                    
Exemplar of better practice                    
High-profile/strategic project                    

Vested Interest (v) levels 5 = Very high, 4 = High, 3 = Neutral, 2 = Low, 1 = Very low

Influence impact levels (i) 5 = Very high, 4 = High, 3 = Neutral, 2 = Low, 1 = Very low

Vested interest-Impact Index (ViII) = √(v*i/25) e.g., if Vested Interest (v) level = 4 (high) and

Influence impact levels (i) then ViII = √(4*4/25) = √(16/25) = 0.80 = high

Table 2: Stakeholder interest intensity index (ViII)

Even when the project manager lacks formal power, he/she needs to be able to influence people and outcomes; through building and nurturing what power they have in optimizing “coali tions of support” (Boddy & Buchanan, 1999). Failure to understand and control the political process has led to the downfall of many projects (Lovell, 1993; Senge, 1990). To successfully manage within an organization's power structures, it is also necessary to understand the organization's formal structure (an organization chart will illustrate this), its informal structure, the social network discussed earlier in this paper (friendships, alliances, maintaining acquaintance with former work colleagues), and, third, its environment (each player's motivation, priorities, and values) (Block, 1983). Supporting the methodology are artifacts such as the project organization chart, the chart of the project environment with definitions of the “directions of influence” leading to the first spreadsheet— “stakeholder identification,” the definition of each stakeholder's relative influence—“stakeholder prioritization” and finally the “stakeholder engagement” chart that defines the who, what, when, and how of the communication strategy and action plan.

dimensions of project influence (bourne & walker, 2004, p. 228)

Figure 2: Dimensions of project influence (Bourne & Walker, 2004, p. 228)

French and Granrose (1995) define relationships in the following way:

  • Exploitation—One person uses another to achieve his or her own selfish objectives without considering any benefit to the other.
  • Reciprocity—Two persons are each using the other in a way that ensures each benefits. In this type of relationship there is a sense of stability and balance absent from exploitation relationships. These relationships are based on rewards and “give and take.”
  • Mutuality—This relationship is beyond exploitation and reciprocity. The two parties treat each other not as means but as themselves, by taking an interest in the other's goals and needs.

Mutuality is the superior of the three relationships. Whether they are organizations working to form partnerships or organizations dealing with employees, each party must have mutuality as their goal. The concept of organizations working with their employees or with other organizations in less than superior exploitation relationships is one where it will be more likely to breech ethical bounds because of the idea of mutual benefit is ignored or not understood. The minimal that any stakeholder engagement strategy must aim for is reciprocity, but by the definitions of mutuality will ensure the building and maintenance of robust and successful project relationships (French & Granrose, 1995).

The Stakeholder Circle Visualization Tool

While Table 2 provides a useful visual representation, it can be made more informative by employing a greater degree of graphical imagery such as an influence map or social network map based on an organization's formal structure and showing who has strong or weak influence in the project environment. Project stakeholders may have deep (extensive) or shallow (limited) influence in terms of their network of others that may be proxies for their interest. For example, an individual with weak influence on the project driving power force may have very deep and strong influence on another individual or group that may in turn have a very strong influence on the project power source. Information about these relationships may come through interviews, formal and informal documentation, or the “grapevine.” Astute project managers keep their antennae active constantly, and know when and how to use such influence maps to achieve success through others who may be able to influence the outcomes.

Following from the use of techniques previously discussed to map stakeholders and their influence patterns, a visualization of stakeholder power and impact can now be constructed. Figure 3 illustrates the concept (referred to as the Stakeholder Circle™) that one of the authors has developed (Weaver & Bourne, 2002).

Key elements of the Stakeholder Circle™ are: concentric circle lines that indicate distance of stakeholders from the project or project delivery entity; patterns of stakeholder entities that indicate their homogeneity—for example, a solid shade indicates solidarity while shading or patterning can indicate heterogeneity in presenting an interest; the size of the block, its relative area, indicates the scale and scope of influence; and the radial depth can indicate the degree of impact (Bourne & Walker, 2005). This tool can be very useful for project managers trying to understand and remain alert to the nature of stakeholder impact. The model has been tested through research conducted by one of the authors, and presented at Project Management Institute (PMI) chapter meetings and conferences (Weaver & Bourne, 2002) on several continents—in each case the presenter received many interesting questions and comments that indicated its resonance with practicing project managers.

It is important to the success of a project for the project team to identify the potential project stakeholder set or the project manager's networks, and to analyze and assess these potential stakeholders to understand what must be done to recruit them for project success.

Step 1—Identifying Stakeholders

The Stakeholder Circle™ methodology consists of three parts. The first part is the identification of project stakeholders in the categories described as part of the project environment earlier in this paper, including a definition of what each individual or group requires from the project as well as a definition of the significance to the project of these individuals or groups. This concept is based on the idea of mutuality as discussed earlier in this paper. This exercise is conducted by workshops with individuals who are familiar with the project deliverables and constraints, and with the organizational structure (and the organizational politics).

the stakeholder circle ™

Figure 3: The Stakeholder Circle

Step 2—Prioritizing Stakeholders

The second part of the methodology is the prioritization of these stakeholders. Considering three factors can assess the relative importance of stakeholders:

  • Proximity—Are they closely associated or relatively remote from the project?
  • Power—Is their power to influence significant or relatively limited?
  • Urgency—Are they prepared to go to any lengths to achieve their outcomes

Proximity as used in this methodology is self-explanatory. The team must rate the stakeholders on a scale of 1 – 4, where 4 is “directly working in the project (team members working on the project most of the time)”; and 1 is “relatively remote form the project (does not have direct involvement with the project processes).”

The simple definition of power used in the prioritization workshops is the relative power to kill the project and is rated by the workshop participants on a scale of 1–4, where 4 is “high capacity to formally instruct change (can have the project stopped)”; and 1 is “relatively low levels of power (cannot generally cause much change).”

Urgency is based on the concept described in Mitchell, Agle, and Wood (1997, p. 867), whose theory defined two conditions to be met from an urgency perspective: “(1) When a relationship or claim is of a time-sensitive nature, and (2) what that relationship or claim is important or critical to the stakeholder.” They view urgency as having two attributes: time sensitivity and criticality. Based on these conditions, the methodology requires workshop participants to rate stakeholders on a scale of 1–5, where 5 is “immediate action is warranted, irrespective of other work commitments’ and 1 is “there is little need for action outside of routine communications.”

There is scope for an extra set of weightings offered by the ability to change the relative weightings of the full set through changing values of power, proximity, and urgency to independent values of 1–9, depending on which aspect of the prioritization the organization deems more important for that project. The Stakeholder Circle™ visualization chart can then be developed using the tool from this data.

Step 3—Developing a Stakeholder Engagement Strategy

The third part of the Stakeholder Circle™ tool methodology is centered on identifying, particularly for the top 15 stakeholders (previously prioritized), engagement approaches tailored to the expectations and needs of these individuals or groups. After all, they have been defined as the most important and influential of the project relationships, so it is important to regard this part of building the relationships as an essential part of the planning process. This will provide essential data on the role of the stakeholder, what the project needs from that relationship, and what that particular stakeholder, individual, or group will gain from supporting a successful project.

Examples of the “what's in it for me (WIIFM)” aspect include enhancement of personal or organizational reputation, and satisfaction of a measure in an individual's key performance indicator (KPI) set, perhaps for delivery of project benefits. Understand this mutuality will enable the team to identify the levels of support and interest that these stakeholders have in supporting the outcomes of the project.

The first set of analysis is around identifying the level of interest of the stakeholder(s) at five levels: from committed, through ambivalent, to antagonistic. Next step is to analyze the stakeholder level of support at five levels: from active support, through noncommittal, to active opposition. If an important stakeholder is both antagonistic and actively opposed, he or she will need to have a different engagement approach from stakeholder(s) who are highly interested and highly supportive.

The next step is to define how the message—any message—will be delivered—written, oral, formal, and/or informal, and who should deliver it and at what frequency. It does not need to be just the project manager; other members of the project team may be more appropriate to deliver the message and sometimes the project manager may have to brief another person who has more influence with the target of the message. The frequency and regularity of delivery of these messages will vary with the interests and level of support of the stakeholder as well as the stage of the project.

Finally, it is important to define the content of the message itself. Often the message will be regular project updates or notification of issues and their resolutions. But care must also be taken to ensure that the content and tenor of the message is in accord with what has been defined as what the stakeholder “requires from the project”—the WIIFM.

The next section of this paper describes data from the research, the analysis of which will help in understanding of relationship management in projects. Some examples are how the same person can have different roles and different importance depending on the type of project, and the project team's assessment of the impact of the stakeholder on the project as well as the impact of the project on the stakeholder. The descriptions of the case studies are based on Martin's (2002) cultural measurement approach. The stakeholder circles were developed from meetings with members of the project team and stepping through the mechanics of gathering data from them as previously described.

Case Study 1—IT Project—Council 1

Council 1 is a local government body serving an Australian inner city constituency with a very diverse set of residents and ratepayers—from wealthy professionals to single parents and the unemployed; from long-term residents to transients. This organization has been undergoing a culture change program over the last two years to develop an organization characterized by open communication, mutual trust, respect, and recognition. This culture change and the organization so developed are based on the work of Wheatley (1999) who uses precepts of the chaos theory to provide a template for different organizational behaviors and different organizations based on an emphasis on values, vision, and ethics. She proposes change events where the “whole system is involved” (Wheatley, 1999, p. 67), from all parts of the organization and including external stakeholders, thus creating a sense of ownership and personal connection not only to the results of the coming together but also to the organization itself. The objective is the development of a culture where trust and cooperation have replaced competition and control.

The culture of Council 1 is characterized by content themes observed through extensive interviews that one of the authors conducted with Council 1 staff, secondary documentation, and direct observations:

  • History—Through amalgamations, one single entity has been formed from three distinct town councils. Some staff have worked their entire lives here, some have recently joined (often from other councils—of the five team members that the researcher worked closely with, four had joined within the last three years from other councils). The “old guard” being conservative, have generally been resistant to changes being introduced both through new technology and the culture change program.
  • The formal hierarchy is headed by the CEO reporting directly to the Councilors—the elected representatives of the ratepayers and residents of Council 1. This formal hierarchical structure is a five-layered traditional structure (Mintzberg, 1979).
  • Politics takes on a number of forms:

    - The external politics due to fixed terms of the elected representatives and their needs to satisfy their constituencies

    - Internal politics of competing demands for funding, resources, influence, and power.

  • Through the influence of the culture change program, the recognition of matrix structures, flexibility, and open communication were constant themes in my discussions with the five research participants.

Formal Council 1 practices were exemplified by the procedures of services acquisition through a long, involved but ultimately, fair process, and the participation of staff members in projects or tasks outside their normal work responsibilities. Other practices include:

  • Financial controls of the lengthy and complex tender process, and the need to gain council approval for expenditures over a certain level
  • Technology support through new IT solutions to enable and ensure compliance with rules and procedures for managing council assets and services
  • Informal structures based on influence, getting things done informally, and forming alliances.

Cultural forms include:

  • Stories—“Folklore”
  • Rituals—Coffee meetings at the café across the road (not in the Council cafeteria), a practice used by all three managers who participated in the research
  • Jargon—Folklore as the term for stories, promises, and doubtful information, and acronyms for many external bodies and internal divisions
  • Physical arrangements:

    - Aging and shabby surroundings—The building is about to undergo a major refurbishment as part of the redevelopment of the Town Hall, which houses staff both administrative and professional and enquiry functions, Council chambers, and areas for public use

    - Open plan general accommodation, with offices for directors (reporting to CEO) and the next layer of management

    - Few meeting rooms

    - Examples of the Council's valuable art collection are displayed in the staff accommodation, both on the walls of offices and in the general areas

    - The staff areas have reasonable security. The researcher was issued a visitor pass and escorted in and out of the building for every visit.

One IT project was studied as part of the doctoral research project reported upon in this paper was an asset management system. This system assisted Council 1 in complying with government requirements and in ensuring greater efficiency in managing Council 1's assets, which included roads, curbing, buildings, and drains.

The phase of the IT project under study was the selection of company to provide asset management software and implementation support (through a complex tender process), as well as the planning and implementation phase. The IT project funding had been approved, but the selection process was taking much longer than expected. The original, aggressive plan for implementation included having a significant part of the solution delivered within six months of the time the research began. The organization did not appear to have many project management capabilities and underestimated the effort involved in gathering requirements, developing databases and processes, and integrating a number of existing systems.

The asset management system's project manager was an experienced functional manager, with significant background and experience in property management in local government, and therefore, in the asset management aspects of the project, but little experience in managing projects such as this one. The project team would be relying on the successful tenderer to take the lead in the project management activities. The asset management team was involved in the identification, prioritization, and engagement management processes developed to support the Stakeholder Circle™ visualization tool. They were very politically aware and were able to grasp the requirements of the tool quickly. Their evaluation of the methodology and the tool was very positive.

The sponsor for the project was the director who had accountability for the asset management group. This sponsor understood his role as being responsible for the funds and realization of benefits and also for ensuring roadblocks to project success are removed. He was very supportive of both the project and the project manager. He played an active role in this project; the project manager communicated daily on issues and updates and regularly sought his advice on matters of politics within the organization.

The stakeholders identified by the project team through the methodology are shown in the Stakeholder Circle™ in Figure 4.

The top 15 stakeholders identified and prioritized through the methodology were, in order of priority with their direction of influence in parenthesis:

  • The Sponsor (Upward—managing up)
  • Project team members (staff) (Downward—part of the team)
  • Chief Executive Officer (Upward—managing up)
  • Senior Leadership Team (Upward—managing up)
  • Core team for Stage 1 comprising managers of those areas where the asset management solution would be implemented first, along with some individuals, either managers or specialists who would be essential to the success of the total project implementation (Downward — part of the team)
  • IT specialists assigned to the project (Downward—part of the team)
  • Manager of one of the functional groups in the organization (#1) (Sideward)
  • Information Management Group (Upward—managing up)
  • Contractors provided from the successful tenderer of the asset management solution who will be working as part of the project team. Included in this group will be individuals responsible for setting and maintaining a schedule and other project administration tasks throughout the implementation of the solution. (Downward—part of the team)
  • Members of each of the areas to be implemented in Stage 1 who will act as specialists and business analysts as well as represent their area's needs for implementation and training. (Downward—part of the team)
  • Members of each of the areas to be implemented in subsequent stages, Stages 2 – 5, who will act as specialists and business analysts as well as represent their areas’ needs for implementation and training. (Downward—part of the team)
  • Auditors (Outward)
  • Software vendor (Downward)
  • Manager of one of the Functional groups in the Council (#2) (Sideward)
  • Councilors (Upward)

In this Stakeholder Circle™ the instances of team are the same as the instances of manager, while instances of managing outward or sideward (contractors or peers) is quite low—two for peers and one for contractors. Only managers have the power to “kill” the project, the sponsor and the CEO have equal power and influence, and there is very little “white space” in this Stakeholder Circle™. This Stakeholder Circle™ was quite different form the other five that were developed as part of the research. This difference was that the instances of “team” were significantly greater than in other projects. When the team reviewed their project's Stakeholder Circle™, they attributed this focus on the team as a result of the organizational change program being introduced into Council 1.

The second part of the research methodology was about developing an engagement strategy based on the requirements of the project on the stakeholders and the stakeholders’ requirements of the project. The project manager of the IT project understood the need to develop strong, regular, and effective communications plans and to use the influence of others (either peers or managers) when she felt she was unable to influence individuals herself. However, in this instance there was no such communication plan, so the project team was very keen to map out a strategy which covers the how, what, when and who of communication to these prioritized stakeholders, as well as all others identified in the process.

the stakeholder circle™ for council 1

Figure 4: The Stakeholder Circle™ for council 1

Case Study 2—Construction Project—Builder

Builder is a private business infrastructure solutions company offering both management services and development services in the areas of projects and property. Builder has been selected to manage the Town Hall re-development project for Council 1, providing project management services in the form of managing the architect group, engineering specialists, and is responsible for project administration of schedules, budgets, and issue and risk management.

Content themes:

  • History—Builder is a family company that has been in the construction and infrastructure services industry for many years. It has a strategy of moving to a more commercial culture.
  • Led by the Managing Director (MD), it has a very flat structure—the MD is also the project director for the construction project. The MD, recently appointed, has described himself as a “man with a mission” to increase the company's effectiveness through introducing contemporary project management skills, sustainable profitability and global expansion beyond Australia. To this end, he has introduced regular meetings of the full team and encouraged all members to attend.
  • He also has espoused a strategy of “growing” the younger members of his team through pairing them with more experienced project managers and then “throwing them in at the deep end” with support from the more experienced members of the company.

Practices:

  • The MD is planning to make procedures more efficient through the purchase of a project management toolset that supports bidding, client management, and automated workflows.
  • Informal structures are based on influence, getting things done informally, and forming alliances.

Cultural forms:

  • Physical arrangements:

    – Modern, functional reception area, with an area for visitors to wait, a staff kitchen partitioned off from the main reception area, and some meeting rooms, named after some of the services offered by Builder.

    – As a visitor, the researcher (one of the authors) has only seen the project meeting rooms and has not visited the site office or head office accommodation to judge what cultural artifacts they may reveal.

The project was one of many of Builder's projects, where Builder's role was of contracted project management, managing all the professional service providers as well as the overall program. The MD of the company was the project director, assisted by the project manager, who had progressed his career through the construction ranks from contract administrator to construction manager and project manager roles. The project manager convened regular meetings with the architects, engineers, and other specialists, managing issues, maintaining the schedule (program), and at the time the researcher was working with this project, he was trying to tie down the design, and therefore the scope and budget for the project. There were separate meetings with the staff from Council. While the project manager was responsible for much of the communication with clients and professional service providers, the project director managed communications and relationship management with the senior managers of Council 1.

the stakeholder circle™ for builder

Figure 5: The Stakeholder Circle™ for builder

The sponsor for this project was the client CEO. The accommodation project was well supported by the CEO as affecting both staff and residents and was seen to reflect the reputation of the Council and the Councilors. Because this project was of such a high profile, the CEO took a personal interest in the development of the design and managing the budget at the time of data collection.

The stakeholders identified by the project team through the methodology are shown in the Stakeholder Circle™ in Figure 5.

The top 15 stakeholders identified and prioritized through the methodology, in order of priority were:

  • Project Implementation Group (Upward—managing up)
  • Client Chief Executive Officer (Upward—managing up)
  • Client Project Manager (Sideward—peers of project management)
  • Building Surveyor (Outward)
  • Project Steering Committee (Upward—managing up)
  • Builder MD/Project Director (Upward—managing up)
  • Town Planner (Outward)
  • Architect (Outward)
  • Contractors (Downward—part of the team)
  • Technical Advisors (Outward)
  • Unions—Building Trade (Outward)
  • Engineers and Specialist Consultants (Outward)
  • Councilors (Upward—managing up)
  • Local Residents (near Town Hall) (Outward)
  • Quantity Surveyor (Sideward—peers of project management)

In this Stakeholder Circle™, the instances of managing outward or sideward (contractors or peers) are highest, with only one instance for “team” and five instances of “managing up.” Only managers (the client CEO the sponsor, and the Councilors of the client organization have the power to kill the project, the sponsor and the project steering committee have equal power and influence while the Councilors have less influence although as much power. There is over 50% for white space around the external perimeter of the Stakeholder Circle™, and no white space at all around the internal perimeter.

There was no stakeholder engagement strategy developed for this project. Although Builder's MD and project manager thought that the use of stakeholder identification and prioritization methodology added value to their organization, they had already developed communication processes that they could apply to the prioritized stakeholder list that they considered sufficiently useful to their purposes.

Discussion and Analysis of Case Studies 1 and 2

In this section of the paper we provide initial observations from the data. The scope of this discussion is limited by paper word-limits and so we acknowledge that we cannot provide as full and detailed a discussion that we would prefer. However, we feel that valuable insights can be drawn from using the Stakeholder Circle™ to map stakeholders, and the primary purpose of this paper is to illustrate how this tool can be used, rather than provide a full analysis of these interesting case studies. We first outline the similarities and differences apparent from the visualization, and then we discuss how this illuminates the processes of developing and maintaining relationships, and how stakeholders were engaged, and how this might affect risk management. This will lead us into our conclusions in terms of project management implications on how to manage power relationships with stakeholders, leadership, and how to maintain engagement.

Similarities and Differences

The output of each of the two Circles is summarized in Table 3. This provides some indication of the “what” and “who” of the stakeholder visualization output in terms of the directions of management attention required.

There is a similar degree of managing upward and sideward for both projects. However, as the Council 1 project team was a hybrid of mostly internal staff and close collaboration with a vendor, there appears to be more downward managing within the Council 1 team and limited outward management with the vendor's staff than was the case for the Builder case study. As stated previously in this paper, the high instance of “team” shown in Council 1's Circle is unusual and could indicate that the two-year organizational change program was having an effect. This correlation is the subject of further research. For Builder, the construction project was procured with a wide array of suppliers and subcontractors (as is normal for this segment of the construction industry); so for this type of project, the need is for substantial outward management with members of the supply chain.

Although both projects will provide deliverables to the same organization—Council 1—there are some factors that have caused the Stakeholder Circle™ developed for each to be significantly different in appearance. Managing upward was conducted in a similar way for both projects.

  Council 1 Builder
Managing Upward 6 (40%) 5 (33%)
Managing Downward (part of the team) 6 (40%) 1 (7%)
Sideward (peers) 1 (7%) 1 (7%)
Outward 2 (13%) 8 (53%)
Inner perimeter white space 7 segments (22%) 0 segments
Outer perimeter white space 1 segment (3%) 18 segments (56%)
Power to kill project 3 managers — 1, 2 and 4 on the priority list 3 managers — 1, 2 and 5 on the priority list

Table 3: Results of circles summarized

The most obvious differences are:

  • The asset management system is an IT project, managed by Council staff, and whose team is primarily also Council staff. Contractors will be provided from the vendor of the asset management package that will be customized to the Council's requirements.
  • The Town Hall redevelopment is a construction project managed by Builder, a commercial project management and services organization, with a project manager provided by Builder and a client project manager provided by Council to work with the team provided and managed by Builder.
  • Council has the same number of prioritized stakeholders in the project implementation “team” as in “management.” This can be explained by the hierarchical nature of the Council organization; the sponsor, the CEO, the senior leadership team, and the information management group are all essential to protect the project from other competing priorities. Two possible explanations for the relatively large number of individuals and groups in the team are the inclusive management>It is clear from a preliminary view of the results of the identification and prioritization of the two projects that it is not possible to predict who the most important stakeholders will be and what mix of management techniques is most appropriate. Having determined the what and who stakeholder identification through using the visualization tool, we turn our attention to the how issues. This leads to the third part of the Stakeholder Circle™ methodology—stakeholder engagement and the way the development and maintenance of project relationships can be achieved.

Project Management Implications for Improved Stakeholder Relationships Using the Stakeholder Circle™ Tool

Implications for improved stakeholder relationship lie primarily in risk management, communication, and project leadership, so each of these will be discussed.

The issues with any methodology and supporting tools are maintenance of the processes, timely review of the stakeholders, and a forum for measurement and monitoring of the engagement strategies defined as part of the methodology. This can be accomplished effectively through ensuring that the engagement plan is reported at each risk review and at regular project meetings to ensure that the prioritized stakeholder list is current and that each stakeholder or stakeholder group is being appropriately engaged.

This paper will now explore three concepts in relation to the Stakeholder Circle™ methodology and toolset, together with observation and open dialogue, evidence, and reference to the wider literature:

  1. The idea of stakeholders to be managed or engaged as part of the risk management process
  2. An exploration of power in terms of how stakeholders may wield power, and how the project manager recognizes a stakeholder's power and wielding of it, and how the project manager with little personal authority can ensure that stakeholders defined as essential to the project can be managed to maintain their commitment to the success of the project
  3. An exploration of leadership and how the project manager can exercise this important attribute for project success, and how the project manager can direct the leadership potential of project stakeholder's for project success.

Risk Management

It is important to recognize that management of the engagement process of prioritized stakeholders is an essential part of a risk management plan for the project. Consider the impact on a project if a stakeholder's lack of interest or lack of cooperation causes a crisis, or exacerbates an issue. It is far more difficult to save an issue caused by a stakeholder and then to turn the negative impact of this stakeholder on the project into a positive one going forward. This has been the philosophy of Builder—that it is important to ensure risk is managed at all phases of the project, even to the extent of facilitating a day-long conference of all those impacted by or involved in the—Town Hall redevelopment project.

The process identified in the PMBOK® Guide (PMI, 2004, Chap. 11) for the identification, registration, ranking, and management of risks is similar to the early part of the Stakeholder Circle™ methodology: brainstorm a list of all stakeholders, rank them according to perceived importance, categorize, register, and manage according to an agreed plan with regular monitoring and review.

The risk responses defined by the PMBOK® Guide (PMI, 2004) can be useful as a guide for managing the risk aspect of relationships. Avoidance (eliminating the threat posed) can be managed through improved communication with stakeholders. Transference (the negative impact of the threat) can be managed through ensuring that the team member who engages a particular stakeholder is one who has empathy with him or her. Transfer is not just about insurance premiums, and may not involve payment of any sort when dealing with stakeholders. When the difficult stakeholder is “outward”—for instance, a contractor delivering services to the project (Bourne & Walker, 2003)—transference as a strategy can mean the development of a contract to balance (or shift) the risk. Transference can also take the form of “performance bonds, warranties, and guarantees” (PMI, 2004, p. 262). Mitigation is about reducing the probability or impact of the risk related to the actions (or lack of action) of an important stakeholder, possible through early action, or through the Stakeholder Circle™ identification, prioritization methodology, and subsequent engagement planning.

Communication as part of stakeholder risk management is vital for project managers for relationships with not only close, supportive tame stakeholders, but also those that may be hostile to their priorities of project goals and vision. These power structures are complex and constantly changing, requiring a high level of maintenance. Maintenance in the form of active communication systems with appropriate stakeholders will also provide early warning systems (Briner et al., 1996). Inevitably, rogue stakeholders (supporting one of the warring parties in the project team, or seeking to establish ascendancy over tame stakeholders, or with other hidden agendas) will incite conflict or cause trouble for the project manager and seek to cancel the project. Even worse, they could seek to change some aspect of the project: scope, technical direction, reduce the funding, or require additional or different reporting. If project managers can established a credible foundation of understanding stakeholder influence and its intensity, then they can engage influential stakeholders in active communication, and disaster may be averted in problematic situations. Conversely, stakeholder influence can be used as a subtle positive driver for project success.

A project manager must also be able to recognize the danger signals, the warnings of possible trouble, particularly with senior stakeholders. Boddy and Buchanan (1999) list these danger signals as:

  • Interfering without consultation
  • Not providing support when needed
  • Poor communication links—too many reporting levels between the project manager and the senior stakeholder
  • Unfounded promises or commitments.

Only a project manager who has built credibility and knows how to tap into the power structures of his or her organization (through deep knowledge of stakeholders and their potential influence) can recognize these signs, and defuse potential crises before disaster strikes. We argue that the qualities and actions that make a good leader will support a project manager working successfully within the power structure of an organization to maintain the objectives illustrated in the project vision and mission.

Risk is not just about negative occurrences. The positive aspects of risk, opportunity, are often neglected, but are essential to consider in any plan to manage and engage a project's stakeholders. The three response suggested by the PMBOK® Guide are exploit, share, or enhance (PMI, 2004, p. 262). These three responses are the essential elements in the engagement strategy that is part of the Stakeholder Circle™ methodology.

Opportunity exploitation is appropriate for risks with potential positive impacts, and is focused on making an opportunity happen. Directly exploiting responses for relationship management include assigning the most appropriate person to engage stakeholders, to ensure that that stakeholders needs and wants are delivered. Sharing a positive risk involves “allocating ownership to a third party who is best able to capture the opportunity for the benefit of the project” such as the formation of partnerships or joint ventures. Enhancement “increases the probability and/or positive impacts by identifying and maximizing key drivers of these positive-impact risks” (PMI, 2004, p. 262).

The stakeholder engagement plan should be regarded as being an important aspect of the risk management plan, while being recognized that stakeholder management is not risk management. A thorough knowledge of each important stakeholder's risk tolerance, and indications of triggers or early warning systems that may indicate a stakeholder's loss of interest or support for the project, can be managed through the reporting and monitoring aspects of the stakeholder engagement strategy in the same way that risk must be managed.

The case study of the reasons for the Challenger disaster (Vaughan, 1996) describes how senior management “bullied” the engineers opposing the launch at that time into acquiescing, how economic and political pressure caused tradeoffs with safety, and how the whole design was compromised by NASA's pact with the military to carry military payloads to its specifications but without appropriate funding contributions. Vaughan's thesis was that it was entrenched organizational culture and management behavior that was behind the technical and management failures that were blamed for the Challenger disaster. It is this organizational culture and behavior that is important to manage for project success—understanding the culture and being able to manage within the environment; the project manager must understand the power relationships and be able to manage them without authority.

Power and Authority

It is necessary to define more clearly what is meant by power in the project context. Yukl (1998) defines three source groups of power and describes their characteristics.

  1. Position power derived from statutory or organizational authority: formal authority; control over rewards; control over punishments; control over information; and ecological (physical/social environment, technology and organization) control.
  2. Personal power derived from human relationship influences or traits: expertise; friendship/loyalty; and charisma.
  3. Political power derived from formally vested or conveniently transient concurrence of objective and means to achieve these: control over decision processes; coalitions; cooption; and institutionalization.

There are many other definitions of power, for example Greiner and Schein (1988), and Greene and Elfrers (1999). The foregoing is offered for its simplicity and usefulness in the context of this paper.

The project manager must know how to work within the organization's cultural and political environment. Projects are affected by the both hidden agendas and the overt actions of people or groups referred to earlier in this paper as being project stakeholders. In large complex organizations, understanding the power structures and using them to benefit project outcomes is often understood as politics.

Crawford and Da Ros (2002) conducted quantitative and qualitative research into the impacts of organizational politics on the outcomes of projects and the importance of the development of political skills for project personnel, particularly the project manager. The starting point was that project success depends on the positive perceptions of project outcomes of key people as well as on positive schedule and budget performance. This, then, leads to the conclusion that “the concept of project success … appears to be, of itself, inherently political” (Crawford & Da Ros, 2002, p. 20). Their research was designed to investigate the relationship between organizational politics and the perceived outcomes of projects. The study focused on projects conducted within and between large organizations. Using quantitative (questionnaire) data and case studies (interviews), the findings supported the following:

  • There is strong correlation between organizational politics and acquisition of project resources
  • The ability of the project manager to make effective use of organization politics contributed significantly to project success
  • The qualitative survey revealed difficulties in assessing how political influences affect the perceived outcomes of projects, due to inconsistencies of definition of clear measures of project success.

The contribution that Pinto (2000) made was to focus on behaviors and tasks that project managers can use to make organizational politics work for project success. “Political behavior, sometimes defined as any process by which individual and groups seek, acquire and maintain power, is pervasive in modern corporations” (Pinto, 2000, p. 86). This behavior is important for a project manager to understand because:

  • Project managers do not always have a “stable base of power” but must “cultivate other methods of influence” to secure the resources necessary for their project to succeed
  • These projects often exist outside the “traditional line (functional) structure.” Resources (financial, human, material, and informational) must be negotiated.

Project managers are not assigned the authority or status to manage their team members who will still be organizationally attached to functional groups elsewhere in the organization. At best, these members will be loaned to the project and may have roles on multiple projects. Ensuring the best performance from these team members is, therefore, based on leadership qualities and the ability to manage conflict and the competing claims on project resources.

Developing networks is something that the successful project manager does in the course of his or her daily activities. It is sometimes important to consider types of networks and their values for supporting project success. Social networks are an important part of the project manager's skills and knowledge set. They are often the best way to get things done. Both the project manager of the Council project and the project director of the construction project understood this approach well and constantly sought to use and expand their networks for the benefit of their projects and organizations. Some useful ways of thinking about social networks are in terms of their function (Krackhardte & Hanson, 1993):

  • Advice network—who in the organization can help solve problems and provide specialized information (technical, accounting);
  • Trust network—who can the project manager share delicate information with;
  • Communication network—who can the project manager regularly talk to about work-related matters. Such informal networks can be used for good to remove roadblocks, understand hidden agendas, or can sabotage company initiatives through opposition to change.

Leadership

Effective leadership style depends on a follower's ability (and willingness) to follow a leader (Hersey, Blanchard, … Johnson, 1996). Leadership of project team members is not the subject of this paper, but is important to raise in the context of an effective leadership style depending upon the perceived and apparent power base of the leader as well as the power relationships between leader and led. It should not be assumed that project leadership only applies to the project manager's team. Qualities of leadership must be present and utilized constantly and flexibly in all aspects of relationship management.

Hersey et al. (1996) defined forms of leadership power and influence as shown in Table 4.

This theory of how power relationships affect leadership effectiveness is useful at a high level, because it provides a useful guideline for establishing the framework for understanding and managing organization power structures. However, it is important to note “The power base of the individual [project manager] depends on the status of the particular project as well as his or her reputation and influencing skills…. Knowing which>Table 4: Forms of power influencing leadership>Kotter (1990, p. 3) wrote that leadership is an age-old art, whereas management is a more recently established craft. Kotter also defined management as “coping with complexity” and leadership as “coping with change.”

This theory of how power relationships affect leadership effectiveness is useful at a high level, because it provides a useful guideline for establishing the framework for understanding and managing organization power structures. However, it is important to note “The power base of the individual [project manager] depends on the status of the particular project as well as his or her reputation and influencing skills…. Knowing which styles of persuasion to use and when depends to large extent to the political skills and courage of the particular [project manager]” (Lovell, 1993).

Coercive Based on fear. Failure to comply results in punishment.
Connection Based on connections to networks or people with influential or important persons inside or outside organizations.
Reward Based on ability to provide rewards through incentives to comply. Is expected that suggestions be followed.
Legitimate Based on organizational or hierarchical position.
Referent Based on personality traits such as likeable, admired etc., thus able to influence.
Information Based on possession to or access to information perceived as valuable.
Expert Based on expertise, skill, knowledge which through respect influences others.

Table 4: Forms of power influencing leadership styles and effects on followers

Kotter (1990, p. 3) wrote that leadership is an age-old art, whereas management is a more recently established craft. Kotter also defined management as “coping with complexity” and leadership as “coping with change.”

Projects are about change, and the managers of these projects should be considered as agents of change, particularly projects in the non-traditional, non-construction areas such as IT or business process change. There are times throughout the life of the project when the project manager has to decide whether to “pull—inspire or persuade” or “push—direct or control” (Bennis & Nanus 1997, p. 20). The experienced project manager knows when to push and when to pull; and how he or she does this depends on the style of the project manager. Some aspects of style can be learned but others are personal traits and can either be modified or enhanced to be effective.

The idea of “the ‘leader and the led’ in organizations is not monolithic, but is composed of varying levels of relationships, contact and situations” (Popper & Zakkai, 1994). This statement holds even within the most rigid hierarchical organizational structures, such as the mature bureaucratic organization of large corporations (Mintzberg, 1989). According to Popper and Zakkai (1994), response to leadership can be emotional, as defined by Bennis and Nanus (1997), or give and take relationships as defined by Hersey et al. (1996). Leadership is about the “effect of the leader on people, individually or collectively, in relation to their environment” (Hersey et al.). In this context, leadership has three forms; inspirational leadership is “heart leadership”; strategic leadership is “head leadership;” and supervisory leadership is “hands leadership” (Hersey et al.). According to Bass (1985), there are also three major types of leadership: transactional based on expectation of reward, charismatic central to transformational leadership, and transformational leaders intellectually stimulating followers. Transformational leaders recognize existing needs in followers but tend to go further, seeking to arouse and engage the full person of the follower, this is where the skills of applying tools like the Stakeholder Circle™ and similar variants can be more effectively deployed.

The methodology of identifying, prioritizing, and engaging project stakeholders cannot be a once-only event. Stakeholders change as they move within the organization or leave it, and their relative importance to the project and power and influence changes. As the project moves through the project lifecycle or implementation stages, different stakeholders may have more or less impact on the project. The process may have to be repeated in whole or in part many times.

The strategy of who, what, when, and how of delivering the tailored messages defined for the important stakeholders must be converted into action through being part of the project schedule and being reported through team meetings and regular reports. In addition, it is essential to regard stakeholder management as an important part of a risk management plan. Although stakeholder management or even communication management is not part of risk management, it contributes to the integrated whole that is successful project management. Uncertainty and risk management aspects of relationship management will be dealt with in another paper.

Only a very small number of managers are good at anticipating, identifying, and knowing how to dilute disasters caused through unequal power relationships. “Generally, managers who have survived over the years have the skills… Project managers who have delivered successful major systems have by necessity become politically skilled” (Block, 1983). Block has also defined project politics as “Actions and interactions between project team members and people outside the team that have impact on the success of the project, its system, the project team, and the project manager” (Block, 1983, p. 21).

According to Briner et al. (1996), every organization has its own dynamics—distinctive patterns of action and reaction. An effective project manager is one who can read the relationships and adapt to those relationships that can be unique for every single relationship (Briner et al., 1996).

Conclusion

Project management does not occur in a vacuum. It requires an infusion of enthusiasm and commitment powered by the full range of project stakeholder energy sources, particularly from project management colleagues, that can be tapped much like connecting to an energy grid. The key is for project managers to know how and when to connect to this organizational grid and identifying who the key connectors (stakeholders) should be. Without attention to the needs and expectations of a diverse range of project stakeholders, a project will probably not be regarded as successful even if the project manager was able to stay within the original time, budget, and scope. This paper brings together stakeholder and elements of risk management and leadership theory. It shows how a tool for identifying and visualizing stakeholder influence can help project managers shape a strategy for providing transformational leadership through a greater understanding of stakeholders’ power and influence. It also indicates how this can be used for undertaking risk mitigation strategies in terms of stakeholder influence.

The two case studies outlined in this paper illustrate the point that every project is unique and so are its stakeholders—in fact, the stakeholders may be unique to each part of the project from feasibility, through planning to execution. Ignoring this point will place project success at risk.

The purpose of the paper was to use two case studies that provide a useful vehicle for showing how a stakeholder visualization tool such as the Stakeholder Circle™ may be fruitfully used. The conclusions to be drawn from these case studies include:

  • Using a standardized methodology (such as the Stakeholder Circle™) contributes to the effectiveness of the analysis process
  • Undertaking a formal stakeholder analysis assists in delivering successful projects
  • The same person can exhibit significant differences in his or her characteristics as a stakeholder when impacted by projects of a different type
  • There are many similarities and synergies between stakeholder and risk management
  • There are demonstrable differences in the behaviors of the stakeholder community between ICT and construction projects
  • These differences change the demands placed on the project management process to deliver successful outcomes.

This paper highlights the critical need for project managers to fully understand the politics of projects and for them to be able to not only make sense of the array of forces that stakeholders can influence, but also have the insight and capability to develop strategies to align stakeholder interests and the project vision in a manner that reduces the potential and strong risk represented by stakeholders and those they can influence.

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DR. LYNDA BOURNE

DR. LYNDA BOURNE is the Director of Training for Mosaic Project Services – an Australian company that specializes in project management training and consultancy. She is a recognized international speaker on the topic of stakeholder management and the dynamics of the interaction between project teams and their key stakeholders. Lynda has developed a project relationship management methodology and visualization tool – the “Stakeholder Circle” to facilitate these processes. She has presented at conferences and seminars in Europe, Russia, Asia, New Zealand and Australia to audiences of project managers in the IT, construction, defence and mining industries, and runs courses and workshops on project management and project relationship management.

Lynda was the inaugural (2003) winner of PMI Australia's “Project Manager of the Year” award. Her career has combined practical project experience with business management roles and academic research to deliver successful projects that meet stakeholders’ expectations.

She has published papers on project relationship management, developing project managers, mentoring coaching and apprenticeship programs, and the Stakeholder Circle™ (a comprehensive methodology for identifying key stakeholders and maintaining their support). The papers have been published in international project management and business journals in the USA, Europe, India and Australia.

DR. DEREK WALKER

DR. DEREK WALKER is Professor of Project Management and Program Director of the Doctor of Project Management at the Graduate School of Business, RMIT University. He worked in various project management roles in the U.K., Canada, and Australia for 16 years before commencing his academic career in 1986. He obtained a Master of Science from the University of Aston (Birmingham) in 1978, and a PhD in 1995 from RMIT University (Melbourne). He has written over 120 peer-reviewed papers and book chapters. His research interests center on innovation diffusion of information and communication technologies, knowledge management, project management and project procurement systems.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

AUGUST 2006 | PROJECT MANAGEMENT JOURNAL

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