Managing Stakeholder

Stakeholders are those who have a "stake" in a project. They can range from sponsors to employees who need a feature to be ready in order to continue their tasks. The first step is to identify those by asking direct questions (interests, motivations, risk, power, etc.) and document their responses. It’s important to understand their role in the project, their expectations, and their decision-making power within the organization, as this will help us determine what level of communication is needed with each party.

In project management, different matrix are used to manage communication needs, such as the popular RACI matrix and the Power Grid. Let’s focus on the latter. The power grid generally uses four quadrants: an “X” axis representing the level of interest, and a “Y” axis representing the level of decision-making power. Although all stakeholders are important, each one has different needs in each project and influences it in various ways:

• Quadrant A: Stakeholders who have the highest decision-making power and the highest interest in the project. These need to be managed closely and constantly. They are usually the ones who have the most opinions and make changes to the project. A Product Owner is a key figure who represents the business stakeholders' interests. They have a high level of interest because the product directly impacts business goals, and they wield influence in prioritizing features and decisions related to the product’s development.
• Quadrant B: Stakeholders who have little decision-making power but are highly interested in general project information. The recommended strategy here is to keep them informed. Example: A Front Desk Employee who interacts with customers and needs to be updated on project progress to ensure customer satisfaction but has no decision-making power.
• Quadrant C: Stakeholders who have significant decision-making power but are less impacted by day-to-day operations. For them, communication should focus on keeping them satisfied and providing updates less frequently. Example: Executive Board have high power to influence the organization’s strategy or direction but may not always have a deep personal interest in the details of specific projects, especially if they are managing a large portfolio of initiatives, the idea here is to keep them happy.
• Quadrant D: Stakeholders with the least interest and decision-making power in the project. Communication with them is mainly for monitoring, and they generally require the least effort. Example: A HR Representative who may be interested in high-level project updates but does not influence project decisions or day-to-day execution.

Identifying stakeholders’ power and interest, you can tailor your communication strategy to ensure that each group receives the appropriate level of attention and information. This guarantee that key stakeholders are engaged appropriately, minimizing potential risks and enhancing project efficiency.

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