When it comes to running a project, one skill all managers need to develop is the way the deal with stakeholders. John McManus examines areas that will help to make a project successful.

Project managers are frequently called upon to manage and deliver many different types of projects. While the specifics of these projects may vary, one constant remains. This is that the manner in which a project is first communicated and addressed to its stakeholders will greatly influence the likelihood of its success or failure.

In practice the management of software development projects is a less straightforward activity than is usually assumed in the literature. This management is less a following of a project plan, and more the handling of continuous action, some ordered, some not.

In the case of complex projects, such as the design and build of an entirely new software system, stakeholder management must be at the forefront of a project managers thinking. A recurring theme in project management is that success is closely related to how people behave towards one another and how they interact.


Many advances in software methodologies, such as the dynamic systems development method, rational unified process, and lightweight approaches such as extreme programming, Crystal and SCRUM place significant currency on user participation and stakeholder involvement during the development phase.

Taken together, the current methodologies offer a wide range of choices to meet the particular needs of many software projects. One of the most important reasons for undertaking software projects is to improve the way a business process is performed. Identifying people with the right technical and management skills for the project is a key challenge for many project managers.

Selecting people to fill key roles in projects is not always easy, especially when multiple projects are on the go or when the organisation is contracting. Whilst no single selection process is guaranteed to deliver the people you are looking for, the project manager should try to minimise the risk by having a multiple selection process.

Most software projects require people to work together in small groups for intensive periods of time. To do this effectively it is useful to understand something about the how both the project team, and their stakeholders, may behave towards each other and within the project in different situations.

The big picture

One characteristic a project manager must possess is the ability to see the big picture. Successful project managers recognise that many factors affect the outcome of a project. Project managers must consider not only the technical aspects but also the economic, social, and legal aspects of their projects.

Their perspective must be broad, seeing the whole picture, requires taking a holistic approach. It is observed that many project managers lack this characteristic. They often fall into the trap of emphasising the technical aspects of projects while neglecting other important business and social facets such as stakeholder management.

As a result, relations with stakeholders often deteriorate and this often leads to legal complications rising due to lack of compliance and trust.

Identifying your stakeholders

Stakeholders are numerous and sometimes difficult to identify. A quick and easy method for identifying project stakeholders is to draw-up a list from the original product initiation document (PID).

Each potential stakeholder is then interviewed and asked to identify another person who will have different perceptions on the project than their own. The process of interviewing and identifying new or potential stakeholders with contrasting views is repeated until several main issues or themes emerge.

These themes each represent a stakeholder group. This approach enables the identification of stakeholder groups with conflicting or different values without asking direct questions that may be socially unacceptable to answer. The bigger and more complex the project, the more likely it is to involve a wider array of stakeholders.

As a result, more assumptions are needed. It is characteristic and fundamental feature of complex projects that not everything of basic importance can be known prior to starting the project.

Motivation and commitment

In many instances the real project requirements often only emerge with time and only as a direct result of our working on them in the early stages of the project. In such circumstances both the stakeholders' motivation, and opportunity to act, are particularly sensitive to specific project issues.

The motivation of stakeholders can vary considerably. For example, the customer would like to introduce requirement changes with maximum benefit, the project manager wants to successfully complete the project with the appropriate resources, and within budget.

Stakeholders have various possibilities to influence the outcome of the project. During the requirements phase stakeholders, can and do manipulate the requirements specification to articulate their own interests.

Stakeholders tend to rate current information higher than less recent information, they base their judgement on information available, and are particularly influenced by recent events and draw unwarranted conclusions from small incidents or a small number of occurrences.

The importance of stakeholders during the project lifecycle is based on the premise that their activities in the development phases largely determine the quality of the finished product itself and as such stakeholders yield power and influence over the project manager.

Common sense would suggest that project managers need to gain trust and commitment from stakeholders. Project managers sometimes use their reputations to create trust with stakeholders. Reputation involves an estimation of one's character, skills and reliability, and other attributes important to the exchanges and is important under exchange conditions of uncertainty.

As uncertainty within a project increases, exchanges between stakeholders tend to become more focused with information about their own and others repudiation. Reputation can reduce behavioural uncertainty by providing information about the reliability and good will of others.

Reputations do have limitations in their use and so project managers must be able to legitimise their actions in the eyes of those stakeholders who are affected, or who can affect, the project's outcomes.


It is relatively easy to tell when a project manager is behaving in a way that will reduce credibility and cause damage to the team or project. Trust breaking behaviours often kill hope of consensus or negotiation.

This is not generally the fault of the stakeholders. Instead it is the failing of those who use this approach in the mistaken belief that it is effective or will somehow avoid having to deal with issues and questions. In essence project managers need to establish credibility and engender trust.

Some practical advice on how to achieve trusting affiliations are:

  • establishing client and personal relationships with key stakeholder groups, remember expertise alone does not inspire trust and credibility,
  • illustrating that actions are being driven by the needs of the stakeholders, and that their needs and requirements are being considered seriously,
  • using the recommendations of stakeholders or established formal methodologies to support the project,
  • involving stakeholders as project champions to lend the project authority.


Both internal and external communication is a critical function of project management, and effective communication involves receiving, as well as sending, messages. Hence, to understand stakeholder interests and to integrate various stakeholder groups into an effective wealth-creating team, managers must engage in dialogue.

A commitment to engage in dialogue, however, does not constitute a commitment to collective decision-making. There are obvious limits as to the amount and content of information (particularly information about strategic options under consideration) that can be appropriately shared with particular stakeholder groups.

Nevertheless, the more open managers can be about critical decisions and their consequences, and the more clearly managers understand and appreciate the perspectives and concerns of affected parties, the more likely it is that problematic situations can be satisfactorily resolved.

Open communication and dialogue are, in themselves, stakeholder benefits, and responsible project managers will recognise this, and will therefore accept and encourage organisational practices intended to manage communication within the business. Project managers gain credibility when they establish procedures to monitor their own way of doing things.

Credibility matters when project managers ask other stakeholders to align their interests with those of the project, and to act responsibly rather than opportunistically. Without mutual credibility, stakeholder trust diminishes and the collaborative character of the organisation may be jeopardized.

In medium-large projects where numerous stakeholders are involved, it is perhaps true to acknowledge that it is highly unlikely that all stakeholders' expectations will be met. Therefore, the project manager must, somehow, ascertain which stakeholders should be satisfied.

Since stakeholders have the ability to positively or negatively influence the project, integrating and satisfying the right people is essential. Specific organisational and project strategies used to integrate stakeholders will differ, depending on the issue and the group’s potential to co-operate or threaten the organisations performance.

In developing strategy, the project manager needs to consider that each stakeholder has the ability to both threaten and co-operate, the objective of the game is to reduce the threatening element and increase the co-operative behaviour of the stakeholder.

It is important to realise that the stakeholder’s potential to act and their willingness to act are not directly related. Therefore, when looking at strategies, it is important to examine not only strategies addressing stakeholders who are positively disposed towards a project but those who are negatively disposed towards a project as well.

Some strategies may only be appropriate for a stakeholder with a specific disposition towards the project, that is, positive or negative. In other cases a given strategy may be appropriate for either type of stakeholder, if not both. Strategies should not be mutually exclusive, some are appropriate for more than one type of stakeholder.