What is stakeholder engagement?

Definition

Stakeholder engagement is the systematic identification, analysis, planning and implementation of actions designed to influence stakeholders.

A stakeholder engagement strategy identifies the needs of key groups and the sponsor plays a vital role in ensuring those business needs are met.

Definition from APM Body of Knowledge 7^th edition

Stakeholder

Stakeholder is the term used in most instances to refer to individuals or groups who have an interest or role in the project, programme or portfolio, or are impacted by it.

Stakeholders typically exist both within and outside the organisation that is investing in the project, programme or portfolio.

It is usual for project professionals to identify stakeholders and then analyse the degree to which they may become a help or hindrance by considering a number of criteria, including

• the relative power of the stakeholder to change how things are done;
• the degree of interest that the stakeholder is likely to demonstrate actively;
• the likelihood of the stakeholder to support the project.

These are encompassed in the 10 Key Principles and are those practices needed to

• gain stakeholder approval and support
• minimise their opposition and satisfy their needs as far as possible
• anticipate what human risks and opportunities might arise
• enable plans to be laid and managed.

Watch: What is stakeholder engagement?

Stakeholder analysis

Stakeholder analysis is of great value when it is used to shape how the work is planned, delivered and governed. Effective stakeholder engagement requires the project professional to focus on understanding different perspectives and to address these in order to achieve the intended outcomes.

Stakeholders who support the project can be used to influence stakeholders who do not. Engagement and influence of stakeholders must be coordinated across projects within programmes and portfolios.

A particular stakeholder may only be concerned with one project within a programme, but the influence of the stakeholder on that project may have programme consequences.

Why should I engage stakeholders?

Benefits of doing it

1. Increased trust and confidence across the project community
2. Increased certainty and pace of progress
3. Clearer understanding of remaining resistance
4. More robust risk management: "If we don't do it, or we can't operate". (e.g. Shell in Nigeria or BP in Indonesia)
5. Increased 360° awareness of organisational circumstances.  For example:

• Sustainability compliance management: "If we don't do it, we won't be successful" (e.g. Sustainable coffee sourcing at Nestlé, supply chain engagement at Adidas)
• Market development: "If we do it, we can access new markets" (e.g. Danone with its base of the pyramid model)
• Innovation: "If we do it, we will be up to speed with our products"
• Strategy: "If we want to grow, we have to do it. It will not only save us money, but make us better" (Few companies engage for strategic purposes, although Unilever has made some strides).

Risks of not doing it

1. Uncertainty of outcome
2. Likelihood of reactive planning
3. Emotional ineptness
4. Diversion and distraction of resources
5. Silo thinking, factions and division amongst all levels: individual, group, organisational
6. Unprofessional and unethical behaviours

Stakeholder engagement vs stakeholder management

Stakeholder engagement differs from stakeholder management and there are many interpretations and definitions. Communities of practitioners in different sectors, cultures and locations have developed their valid descriptions as to what it is and how it is successfully practised.

Stakeholder management has become a frequently used term which implies that stakeholder behaviours and actions can, indeed, be managed, i.e. predicted, planned and controlled. It’s a process that examines the what and who.

Stakeholder engagement looks at how this is achieved and focuses on building relationships. It is the practice of influencing a variety of outcomes through consultation, communication, negotiation, compromise, and relationship building.

They are both vital throughout the project lifecycle and enable successful project delivery.

Who are stakeholders?

The term ‘stakeholder’ is comparatively new and the specific nature of what a stakeholder is remains contested. In general terms, Stakeholders are individuals or groups with an interest in the project, programme or portfolio because they are involved in the work or affected by the outcomes.

Stakeholders might be individuals, groups or organisations being affected by the outcome of the project, or in a position to affect that outcome.

Source: Engaging Stakeholders on projects: How to harness people power

Related resources

10 key principles of stakeholder engagement 

Why you should engage people, not manage them

Stakeholder Engagement Focus Group (SEFG)

The People Interest Network has a vision of ‘Inspired and inspiring project managers’ and a mission to raise awareness, inspire thinking and influence opinion around people and project management.

Engaging stakeholders on projects - How to harness people power

An in-depth examination of the topic covered in the APM Body of Knowledge 7^th edition.

It gives project professionals detailed tips, tools and practical steps to help improve ways of working and shows how harnessing the power of people is key to improving project success.

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APM Body of Knowledge 7^th edition

The APM Body of Knowledge 7^th edition is a foundational resource providing the concepts, functions and activities that make up professional project management. It reflects the developing profession, recognising project-based working at all levels, and across all sectors for influencers, decision makers, project professionals and their teams.