Stakeholders are important to every project. They are impacted by the project, be they investor or customer. But what is a stakeholder? There’s more than one answer to that question. Let’s take some time to define what a stakeholder is, examples of stakeholders and free stakeholder templates that can help with stakeholder management. What Is a Stakeholder? A stakeholder is either an individual, group or organization who is impacted by the outcome of a project or a business venture. They have an interest in the success of the project, and can be within or outside the organization that is sponsoring the project. Stakeholders are very important because they can have a positive or negative influence on the project with their decisions. There are also critical or key stakeholders, whose support is needed for the project to exist. A stakeholder is a person, like any other member of the project, and some will be easier to manage than others. You’re going to have to learn to use stakeholder maps to identify who your key stakeholders are and make sure you meet their requirements. The stakeholder has a vest interest in the project. That means you’ll want to keep them updated regularly. ProjectManager is a cloud-based work and project management software that has real-time dashboards that monitor six project metrics. Dashboards require no setup, automatically show progress and performance in colorful graphs and charts. They can easily be shared to manage your stakeholders expectations. Get started with ProjectManager today for free. Stakeholder vs Shareholder Stakeholders are not the same thing as shareholders. A stakeholder can be a wide variety of people impacted or invested in the project. For example, a stakeholder can be the owner or even the shareholder. But stakeholders can also be the employees, bondholders, customers, suppliers and vendors, too. A shareholder can be a stakeholder. A shareholder, though, is someone who has invested in a corporation. That corporation might initiate projects that the shareholder is a stakeholder in too, as shareholders are also stakeholders, but stakeholders are not always shareholders. That’s because a shareholder owns a part of a public company through the purchase of stocks. A stakeholder has an interest in the corporation’s performance, not stock performance. A shareholder can be a person, but they can also be a company or an institution. They have a financial interest in the corporation’s profitability. Shareholders, as owners of the corporation’s stock, are able to vote and impact the management of a company. While they are part-owners of the company, they are not liable for the company’s debt. In fact, stakeholders and shareholders can have competing interests. Pro tip: The terms stakeholder and shareholder are commonly confused. If you want more information on this, you can dive into stakeholder theory and shareholder theory, two similar yet different approaches. Types of Stakeholders While every project has stakeholders and those stakeholders can be anyone with influence or that can be influenced by the project. We have already seen that there can be many stakeholders and that will be further discussed soon. But all stakeholders can be broken into two groups: internal stakeholders and external stakeholders. Let’s take a look at both. Internal Stakeholders Internal stakeholders are those who are within the organization. The project directly impacts them as they serve and are employed by the organization managing it. These can include employees, owners, the board of directors, project managers, investors and more. External Stakeholders External stakeholders are those people who are outside of the organzation and are indirectly impacted by the project. They are, however, influenced by the organization’s work but are not employees of the organization. These people can be suppliers, customers, creditors, clients, intermediaries, competitors, society, government and more. Stakeholder Examples As we mentioned, there are many different types of stakeholders. There are internal stakeholders and external stakeholders, and there are many stakeholder examples that fall under one or the other category. Let’s take a look at some of the more common stakeholder examples. Investors: These are stakeholders looking for a financial return. They can be shareholders and debtholders. They have invested capital in the business and want a return on that investment. Employees: These stakeholders rely on their employment and job security. They have a direct stake in the organization as it supports them and provides them with benefits Customers: These stakeholders want the product or service that the project delivers and they expect it to be of quality and contain value for themselves. Suppliers and Vendors: These stakeholders have their revenue tied up with the project as they sell goods and services to the business managing the project. Project success means more business for them. Communities: These stakeholders want the project not to negatively impact their health, safety or economic development. The organizations that are housed in their communities or working on projects in their communities can impact job creation, spending and much more. Government: These stakeholders get taxes and gross domestic product from a project. They are major stakeholders as they collect taxes from both the company on a corporate level and individually from those it employs. A stakeholder is a person, like any other member of the project, and some will be easier to manage than others. You’re going to have to learn to deal with a variety of personalities and make sure you’re having a productive dialogue with them to know the project goals you’ve been hired to meet. But first, who is the stakeholder? How to Manage Project Stakeholders Managing stakeholders can be easy if you follow the right stakeholder management steps. Here are the steps that any project manager should follow when managing stakeholder relations. 1. Stakeholder Identification Identifying who the stakeholders are in your project is key. The project’s success depends on it. If your stakeholder isn’t happy, then the project is not a complete success. So, you want to start this process as soon as the project charter has been created. Related: Free Project Charter Template A good place to start figuring out who your stakeholders are is by reviewing the project charter, which documents the reason for the project and appoints the project manager. Among the information about objects, budget, schedule, assumptions and constraints, project sponsor and top management, you can discern the stakeholders. Also, review the contracts, as stakeholders might be mentioned in these documents. Are there environmental factors or other organizations with key ties to the project? Look those over too, as they might supply you with the names of stakeholders. For example, if there are environmental factors dictated by the government, then the government is a stakeholder. Review their regulations and standards to stay in good terms with them. 2. Stakeholder Analysis Once you identify your project stakeholders, it’s time for the stakeholder analysis phase, where you’ll need to gather information and requirements from them. You’ll also need to begin estimating their level of involvement and influence in your project to get ready to create stakeholder communication strategies and prioritize them. 3. Stakeholder Prioritization A key question for anyone managing a project is how should you manage a stakeholder on the project? To complicate matters, there might be many stakeholders in your project. You should treat them like you would any other task on your to-do list: by prioritizing them. Over the course of a project, one stakeholder might be more valuable in terms of the project objections than another, whereas some stakeholders might demand more attention than others. So, you want to define who those people are and at what point in the project phase you might need to attend to them more, and build that into your schedule. 4. Stakeholder Engagement Now we’ve come to the second part of our question, which we’ve already started answering in the above paragraph. When we talk of stakeholder management what we mean is creating a positive relationship with your stakeholders by meeting their expectations and whatever objectives they agreed to in the project. This relationship isn’t just granted, however. It must be earned. You can earn the trust and build a positive relationship with stakeholders through proactive communication and by listening to their needs. One way to do this is by interviewing the project stakeholders—not all of them, but certainly the most important ones. You might need to speak to experts to get the background you need for particular fields or groups, so when you do have one-on-one conversations with the stakeholders, you’re well-informed and ready to get the most out of that time together. There is a process for this like there is a process for everything in project management: Document Stakeholder Communications. Do this formally by creating a stakeholder communication plan. Note their names and their roles in the organization they represent. Document every conversation you have with these key project partners, both to record their interests and requests, but also to be able to review their information later for accuracy. If you’re conducting interviews, ask the stakeholders if you can record those conversations, as any record of interaction is important to document. Enforce Process. Next, you want to keep to a process of communications with stakeholders and make sure that process is transparent, so everyone knows what to expect. This includes project requests or feedback, and how you will document and respond to those requests needs to be subject to a formal process of review and approval. This lets the stakeholders know that requests are subject to review and that you have a process that you adhere to for those formal requests. This protects both parties from scope changes and miscommunications that can impact the project. Provide Frequent Status Reports. Providing regular and timely status reports that are appropriate for the stakeholders is crucial. You can go into details with team members, while executives are going to want more of an overview. So, tailor the reports to the audience. Don’t forget to follow up with stakeholders as well, asking questions to see if they have any feedback. That way you’re managing them, and you’re communicating with them proactively, to know if there’s discontent or some decision has been made that will impact the project. Dashboards in ProjectManager, provide real-time data so you’re stakeholders are always aware of the latest action. Dispel Myths. Your stakeholder might be working on multiple projects, which means they’re not going to have the same closeness to the project as you. But that doesn’t mean they’re not getting other information about your project from other sources. You don’t want them to be subject to gossip or get incorrect information that might sway their opinions in the project. If they do make an assumption or get misinformation, you have to nip that poison in the bud and provide them with the truth. Sometimes they might not want to hear that truth, but better it comes from you, so you can control and manage it. Stakeholder Management Templates Managing stakeholders and their expectations is an important part of project management. You need to keep stakeholders updated but you don’t want them interrupting the important work of managing the project or risk disaster. ProjectManager can help with software or, if you’re not ready to upgrade, with free templates. We have free templates for every stage of your project. Here are a few that deal with stakeholder management. Stakeholder Analysis Template Before you can manage your stakeholders you have to understand them in the context of your project. Our free stakeholder analysis template for Excel helps you to identify the stakeholders in your project with a stakeholder analysis matrix. You can collect the key stakeholders by group and determine their level of participation, interest and power. Stakeholder Map Template Our free stakeholder map template for Excel helps you see each stakeholders’ level of interest and level of influence. By where they land you can know if they must be managed closely, kept satisfied, kept informed or monitored. There is also a color key to make it easy to read, such as green if they’re supportive, yellow if they’re neutral and red if they’re a blocker. Communication Plan Template Finally, once you understand your stakeholders it’s time to set up a way to keep them informed. Our free communication plan template for Word is the ideal tool to define your objectives and define the channels and regularity by which your stakeholders expect to be kept up-to-date. The free communication plan template works for all your communication needs in a project, not only for communicating with stakeholders. Use ProjectManager for Stakeholder Management You know what a stakeholder is and why it’s important to keep them in the loop during the life cycle of your project. ProjectManager is cloud-based work and project management software that can help you manage their expectations and keep them updated with real-time data. Real-Time Dashboard for High-Level View Stakeholders want data, but they don’t want to get lost in the weeds of a project. Those deep dives are crucial for project managers and their teams, but stakeholders only want the broad strokes. Our real-time dashboard collects information as it’s reported. Those numbers are automatically crunched and displayed in easy-to-read charts and graphs that track six project metrics to keep stakeholders informed on progress. Detailed Reports for Stakeholder Presentations While the dashboard gives the big picture, stakeholders often want to get further details. With one click you can generate the reports stakeholders want to see, whether that’s project status, time or cost. If they have questions, no problem. Every report can be filtered to show cost management or just the data they want. They can be easily shared, too, so stakeholders can get the reports how they want them. Create Transparency With Shared Plans The project plan is the roadmap that charts the direction of the project. It’s a critical document and one that is changing throughout the project. Stakeholders will need the project plan to keep the project’s progress in context. Therefore, project managers want an easy-to-share project plan. You can import and export project plans and share them with anyone. As the project plan changes, just send an updated one to your stakeholders and keep them in the loop. Our tool can automate a lot of your busywork. For example, you can automate email notifications, so stakeholders are kept updated on status reports. We give stakeholders the transparency they want to feel informed, which gives the project manager and project team the room they need to complete the project on time, within budget and to stakeholder’s quality expectations. When you’re reporting to stakeholders you want to make sure the process is both streamlined and accurate. ProjectManager makes sharing reports easy as a click of a button. Our cloud-based project management software updates in real time, so you always have the most accurate, up-to-date project data for yourself and your stakeholders. Try our award-winning software today with this 30-day free trial. Sample Project Plan For Your Next Project 4 Must-Have Project Dashboard Tools Project Management for Startups & Entrepreneurs: A Quick Start Guide