CHAPTER 6

When Stakeholders Really Matter

More and more organizations are using projects to achieve their goals. As discussed in Chapter 1 there has been a shift in emphasis on what makes a project successful. Nowadays it is much more about having the right impact, creating value, and realizing sustainable value, which means paying attention to factors that are far removed from just making the appropriate allocation of resources to well-defined tasks. The focus on outcomes rather than on the delivery of outputs is achieved by attending to the combination of CSFs and constraints.

This may account for why, and to our mind very belatedly, the ­project management community has woken up to the importance placed on ­satisfying stakeholders, and the need to ensure that the outputs from a project are adopted and used. It is only as recently as 2013 that the ­various bodies of knowledge (PMBOK and APM BOK) even ­recognized the significance of stakeholder engagement as part of the project ­managers’ armory. The project manager can no longer be confident of success by ­following a technically well-executed schedule. They are dependent on ­others, ­collaborating with stakeholders, working with the sponsor, ­making sure that what the project does deliver is made valuable in the context of the business. You can no longer succeed alone!

Given this re-alignment of management attention, how does the planning process respond? Rather than just ask, ‘How much can I spend?,’ ‘How long have I got?,’ and ‘What do you want?’ The questions need a little more sophistication to surface the satisfaction criteria. Perhaps ­questions like these:

• What does success look like? A surprisingly difficult question to answer for some sponsors—but persevere—because if they don’t know, it is unlikely you will come up with the right answer.
• How do you know when the project is completed? ­Stopping the project just because you’ve reached the end-date is rarely a successful ploy, so how do you know when enough is enough? This is fundamental planning information.
• How will the project be measured/judged? This is a curiously overlooked question. People respond to what is being measured. In a study repeated many times, a research group deliberately let slip they were recording the number of smiles seen in a library. Without any further communication, the number of smiles rose and stayed high until the group left. The incidence of smiles gradually returned to its original level. (This was known because, of course, the researchers hadn’t gone, they just became secretive!) Whatever the project is thought to be measured on, will be the factor that gets most management attention.

Success factors for a project set out those things that we must focus on in our planning and delivery. CSFs are, as their name implies, not important, they are critical—that is they are concerns that should they not be achieved, the project will be seen to have failed. In this way, they are similar to constraints. The project client defines and owns the CSFs, and the project must be planned and delivered to ensure their achievement. However, they can be difficult to tease out from stakeholders.

Clients will often lead you to believe it is all about the money, or it is all about the end-date, but when close attention is paid to the ­decisions made, it becomes clear that other factors—the critical success factors—are the ones that really dictate their choices and their reactions of ­disappointment or delight.

A project that demonstrates this point was the construction of the Scottish Parliament Building. This was funded by taxpayers’ money and had a widely debated and publicized budget and end-date. It was ­delivered three years late—twice the original three-year estimate. It was 1,000 ­percent over budget—the original estimate was between £10m to £40m, and yet the actual cost was £414m. Why? How? A review of every decision taken by the stakeholders made it quite clear, when it came to making choices, they were much more interested in making a prestige building with high aesthetic values, with spring water flushing the toilets, than staying within budget or finishing on schedule. This was the real CSF—the real constraint—not the money and not the time.

Characterizing Stakeholder-Intensive Projects

This chapter looks specifically at how planning changes on stakeholder sensitive and stakeholder-led projects. In these types of projects, the ­fundamental driver for success, the critical success factors, are the way in which the stakeholders behave. If you are on a project where the most important outcome is positive engagement by groups of stakeholders, where the project can only succeed if the stakeholders allow it to, then you are involved in a stakeholder-sensitive project. If you are on a ­project (or more likely a program) where what you deliver, and how, is dictated by the agendas of influential external stakeholders, then you may be ­managing a stakeholder-led project.

Role and Agenda-Based Stakeholders

In planning for stakeholder-intensive projects, we suggest you first distinguish between those stakeholders that are involved with your project because of their role; what we term role-based stakeholders and those whose interest and involvement arises from specific agendas they hold: agenda-based stakeholders (Worsley 2016).

Role-Based Stakeholders

Role-based stakeholders are those who have a specific responsibility in the project environment. These are identified during the planning stages as:

• Governance stakeholders: individuals and groups who are involved in authorization or approval decisions for the ­project, for example, sponsor, steering group, and so on.
• Internal stakeholders: some individuals and groups internal to the project may be best treated as role-based stakeholders. These include those that support the definition of requirements, and the implementation of the products, as well as those responsible for the operational changes, for example, product owners, users, and so on.

For all of these, it will be possible to define a particular role in the project. Where roles are unclear, or there are overlaps, then techniques such as responsibility charting can be useful.

Responsibility charting (often known by the acronym RACI—­responsible, accountable, consulted, informed) is a technique used to identify areas where there are process or decision making ambiguities. The aim is to bring out the differences of opinion and resolve them through consultation and debate. Underpinning the approach is the insight that any particular role has three perspectives—what the person thinks the role is, what other people believe the role is, and what the person actually does. It is worth observing that these are often poorly aligned, one with another.

RACI’s usefulness is not only in providing a public and straightforward analysis of roles but also in its ability to uncover where there is a tendency to encourage ambiguity—a lack of clarity to hide behind. Communicating the understanding of roles often exposes issues and areas that require further debate. During planning, RACI is particularly useful for ensuring governance clarity—who can make what decisions about what and when; and for activity clarity—who takes responsibility for doing what and when. An example of a partial RACI can be seen in Table 6.1.

Table 6.1 A RACI table

	Project manager	Steering group	Sponsor	Business owner
Develops the business case	R	C	A	R
Approves stage completions	R	C	A/R	C
Resolves cross-functional issues	R	A	I	I
Makes go/no-go decisions		C	A
Ensures claimed savings are made			A/R	R
Ensures resources are committed	R	A		R
Approves funding and funding changes		A	R

Agenda-Based Stakeholders

Agenda-based stakeholders are those who have an opinion on the project and its conduct and have the power and opportunity to influence it. The identification of agenda-based stakeholders requires an external perspective and demands anticipating who might have an interest through the life of the project and beyond.

In projects where agenda-based stakeholders abound, it is unlikely that the project manager will be well-positioned to understand all of the possible players. The tools to use during the planning stages include techniques such as power and influence mapping, stakeholder checklists, and salience analysis, as well as others (Worsley 2016).

Different approaches and techniques are necessary when planning for role-based stakeholders from those used in analyzing agenda-based groups. Too often, we see the same techniques used for both. As an ­example, one of the most frequently used tools is the ‘power-­interest’ grid on to which stakeholders are mapped. This is a technique for ­dealing with ­agenda-based stakeholders, and not particularly suitable for ­role-based ones. Consider this: Are you sure your sponsor is the most motivated stakeholder? Will the sponsor always feature in the ‘high-high’ box (see Figure 6.1)?

Figure 6.1 Mapping stakeholders on a power-interest grid

Sponsors should be on the grid somewhere. Otherwise, they’d be a poor choice for a sponsor. But many projects suffer because the sponsor is regarded as the most powerful influencer on the project—and it turns out they’re not! In the project that Figure 6.1 came from, the project manager had placed the sponsor and the business owner (the operational manager who would inherit the outputs from the project) as shown on the first grid. The actual position was more like the second grid. By misplacing, and therefore mismanaging the stakeholders, the project ended in considerable disarray.

Stakeholder-Neutral to Stakeholder-Led Projects

Of course, every project has at least one stakeholder. Even a project you do for yourself by yourself has you as a stakeholder! It is the number of stakeholders, their positions concerning the project and the nature of their interests and level of power (the mix of role-based and agenda-based stakeholders) that will fundamentally influence the way you can plan and conduct the project.

Figure 6.2 illustrates an approach to classifying projects based on the type and intensity of stakeholder involvement. It is a continuum from stakeholder-neutral to stakeholder-led. Role-based stakeholders ­dominate stakeholder-neutral projects. Engagement is through ­governance ­meetings, simple communications, and training. At the other end of the continuum, stakeholder-led projects involve large numbers of stakeholders, mixed and often conflicting agendas, and are usually in the public domain. These projects demand elaborate engagement plans, and it is the engagement planning itself, which dominates the project planning process.

Figure 6.2 Stakeholders associated with different project types

Let’s now have a look at two examples of stakeholder-intensive ­projects. As you read them, consider:

• Where would you position the two projects on the stakeholder continuum?
• Do you have projects with similar challenges and success factors?
• Can you identify role-based and agenda-based stakeholders in your projects?
• Where do your projects sit on the stakeholder-neutral to stakeholder-led continuum?
• What techniques are you using to analyze and plan stakeholder engagements?

A Case of Super-Sensitive Stakeholder Management

Remploy was a UK government-owned organization offering employment and skills development support for disabled people. Up until 2007, it provided this primarily through its own factories—a network of 83 sites, in every region of the UK. But the world had changed. The ­thinking among disability groups and leading charities was that for many disabled people working in mainstream employment was much better than in ­specialized facilities.

There is now an acceptance that disabled people would prefer to work in mainstream employment alongside non-disabled people rather than in sheltered workshops from which they do not progress and develop…

—Remploy’s Chief Executive Officer

With the changing dynamics of employment, it was established that for the cost of employing one person in a Remploy factory it could place four people in jobs with mainstream employers.

The early planning showed that 28 factories would need to be closed to meet the financial targets, but the political and social landscape was bleak. Remploy would be terminating posts that had been traditionally safe (protected) job opportunities for the disabled. This was a program no individual, and certainly no politician would find easy to support openly. The project group faced a formidable challenge. They had to convince all those who had an interest that the company had the right approach. This was their critical success factor—what would need to be achieved if the project was to end well:

Disability groups, the media, disabled employees and their families, and unions must have confidence in the Remploy approach and believe in its positive effects in the medium to longer term.

First, Define Your Stakeholder Engagement Approach

The early planning phase was a massive stakeholder engagement exercise. Each of the stakeholder’s agendas—groups and individuals—were considered in detail, with named people identified who may be affected by the closure of factories. The stakeholder list consisted of thousands of entries.

The engagement approach and the timing of the engagement were analyzed. Somewhat like a huge soccer game—the planning team had to consider which stakeholders should be on the pitch when they should be brought into play, what positions they should take, and when they could be taken off the field. Timing would be critical—an uncontrolled, untimely invasion of the pitch would be difficult to recover from!

To create appropriate engagement strategies, the planning team had to understand the possibilities for aligning WIIFM (‘What’s in it for me’) factors to improve the success rate of the engagement activities. This, like negotiation processes generally, demanded real out-of-the-box ­problem-solving thinking. Actions, not directly linked to the final outputs, had to be defined and delivered wholly focused on addressing the stakeholder-related risks.

Political agendas also needed to be managed. That meant looking at all the possible influencing strategies. Who is best placed to influence ­others, and whom can we influence? As the program director commented,

Our job was to give our team the direction, information, and tools to go out and persuade, sometimes cajole but always positively influence the key groups and individuals, then track that it was happening and amend the plan as necessary.

With jobs at stake, and the complex legislation around the employment of the disabled, careful attention needed to be given to ensuring that due process was carefully followed. It was of great credit to the ­program that none of the consultations and actions that followed resulted in ­tribunals or other legal action.

Planning Was Everything

The planning phase took three years, and during this time business-as-usual continued. Why so long? The repercussions of getting it wrong were just so high. Not only was the Remploy business at risk, but also the ability of government and public services to provide real opportunities to some of the most vulnerable people in society would be affected.

Using the insights gained from the stakeholder analysis, the team planned out every single deliverable, every single communication in detail. Scenario planning for each possible interaction was analyzed, and appropriate responses were mapped out. Nothing was left to chance; right the way down to providing the detailed scripts for the meetings and ­briefings that would be given by the operational line managers.

Retrospective

In the 12 months following this project, Remploy found 6,600 jobs in mainstream employment for people with disabilities—an increase of 27 percent on the previous year and the situation continues to go well. The Remploy modernization program won the Association for ­Project ­Managers (APM) Program of the Year Award 2009. This case was ­originally published in The Project Manager magazine (Worsley 2010).

A Case of Stakeholder-Led Project Management

In 2007, the City of Cape Town started a major transport infrastructure program to introduce the integrated rapid transport (IRT) system. Some of this work continues to this day. The overall aim of the IRT was to bring about a more sustainable and balanced integrated transport system, notably linking the poorer, outlying areas of Cape Town to economic and social nodes in the city.

The first phase focused on the northern suburbs and inner city basin where extreme congestion was regularly experienced during peak traffic periods. A MyCiti bus service was introduced between the Cape Town Civic Centre and the Cape Town International Airport, and for the duration of the hugely successful 2010 FIFA World Cup, the city offered a dedicated MyCiti service to spectators and tourists. Included in the IRT portfolio are the metro rail network, the MyCiti network, conventional bus and minibus operations, metered taxis, and bicycle and pedestrian lanes, all of which are to be eventually connected to make an integrated whole.

Phase 1 IRT was a complex technical challenge. It involved the redevelopment of some of the busiest streets to establish dedicated bus lanes. But this was not the biggest worry for the city. MyCiTi buses, where they were implemented, would compete directly with existing taxi and bus services, and this raised social and public order issues, which could result in a genuine threat to the success of the program. The resistance to the new service was likely to be significant, disruptive, and potentially violent.

A project focusing specifically on the positive engagement of these stakeholders was set up to run in parallel with the construction and operationalization program. This business integration project had one major critical success factor: its implementation was accepted and supported by existing road business, specifically the taxi and bus services.

In Cape Town, taxis are a source of income to large groups of local citizens. A private taxi typically provides a living for at least three families: the driver, the taxi owner, and the franchiser who owns the license to operate in a particular area. Each of these families would be impacted by a change in the competitive environment. Given eight taxi associations, 950 taxis, two bus companies with 200 buses, that is a lot of families.

The taxi associations are managed by powerful community members. They are not averse to aggressive, and sometimes violent, defense of their business interests. These groups continuously fight against what they see as government over-regulation, and there was, at the time, no grounds for a trusted relationship between the various parties involved.

It was clear to the City of Cape Town program team that if they were to be successful in the IRT implementation, integration with the local transport businesses into the new service would be crucial, and that would mean formalizing an informal industry which had resisted regularization for many years.

Planning the Stakeholder Engagement

Early planning activities concentrated on the assessment and analysis of the stakeholder groups involved. In talking with the manager of this project, one message comes through clearly: If you don’t understand your stakeholders’ business or understand your stakeholders’ agendas, then you are unlikely to find successful solutions to their concerns. Getting to know the ‘players’ and creating the appropriate relationships, public and personal, was a major component of this project’s activities. This project uses all of the six principles of stakeholder engagement (Figure 6.3).

The project manager was adamant:

When we engage with the community we must give them confidence that we are listening and we are reacting to the input they provide us. That means reading back their concerns using ‘their voice,’ involving them in the development of solutions and being transparent and clear about what we can and cannot achieve.

The project needed the ‘right ears’ to hear the real concerns; and the right approaches—those chosen with and by the stakeholders. Without that, the shared development of solutions, which would deliver sustainable relationships with the business community, would never materialize.

Figure 6.3 The six principles of stakeholder engagement

This project sought and delivered solutions that just would not have been thought of without this level of engagement in the planning and delivery processes. For example, with the introduction of the IRT, the numbers of passengers available to the taxi operating companies would inevitably go down. In a radical move, the project team proposed a new income scheme based upon the number of kilometers traveled by the taxi rather than the number of passengers. The City Council agreed to back the scheme financially. To achieve this within budget constraints meant reducing the number of taxis on the road, and that meant laying off taxi drivers. To address this, another scheme was set up to provide pension packages for those taxi drivers of or near pensionable age, thus reducing the numbers of drivers and taxis.

Retrospective

The City of Cape Town believed in the critical importance of business community buy-in to the success of the new IRT. They backed this with commitment, resources, and budget. Other cities in South Africa did not take such far-reaching measures. While Cape Town is sometimes ­criticized for the costs incurred for the IRT development, it is the only city in South Africa that has been able to sustain the new transport system. Others have struggled, often facing aggressive, and sometimes violent, opposition to their metropolitan-regulated schemes.

In 2012, Cape Town was one of four cities short-listed for the prestigious Sustainable Transport Awards, with its non-motorized ­transport (NMT) and the bus rapid transit network, MyCiti, receiving an ­honorable mention. This case study was originally published in Stakeholder-led ­Project Management: Changing the way we manage projects (Worsley 2016).

Stakeholder-Intensive Project Planning

Both the IRT and Remploy projects are examples of stakeholder-intensive projects. How did you decide to position them on the continuum? Not sure? Consider the critical success factors of the two projects side-by-side:

• Remploy: Disability groups, the media, disabled employees and their families, and unions must have confidence in the Remploy approach and believe in its positive effects in the longer term.
• IRT: Implementation is accepted and actively supported by existing road business—specifically the taxi and bus services.

The difference in wording and ‘tone’ is enough to cause a big difference in planning and execution. Remploy had a solution that was driven by the need to close down existing factories. The purpose of the project planning was to take its agenda-based stakeholders on a shared journey toward these solutions. This is characteristic of a stakeholder-sensitive project.

The IRT program (at least the local business integration part of this program) did not know and could not mandate which solutions could be successful. Stakeholder-led projects, such as these, are game-changers in the way we plan and manage their execution.

Adapting Planning to Stakeholder-Intensity

Stakeholder understanding is an essential part of project initiation and planning. The scope of a project is fundamentally impacted by the size and complexity of the stakeholder landscape. Engagement and communication costs time and money, and stakeholder factors contribute to the project risks. The management of these risks also adds to the scope of, or at least to the contingency for, the project. Yet, communication and engagement are often either under-scoped or simply not included in the scope at all. Communication then becomes ‘something we will do if we have the time and the money.’

The product breakdown structure (PBS—the outputs required to achieve the outcomes of the project) is the primary tool used for project scoping. Consider your own PBS. Where are the communication and engagement products? Have they been adequately allowed for? How did you go about identifying how much time and effort would be required? In many of the technical projects we looked at, communication either appeared as a single product (called communications) with little evidence of analysis of what this covered or was assumed to be included in the management overhead.

Figure 6.4 is a top-level PBS for a straightforward office move. As a stakeholder-neutral project, the stakeholder engagement is mainly focused on communications and training. These have been included in the scope as ‘Training on new telephones’ and as a communications product which includes the main pieces of work: ‘Launch briefings,’ ‘Team updates’ and a detailed communications plan for the actual move. These are clear in the PBS, and once we have established how many of each product is needed (the number of launch briefings, for example, depends upon how many staff to be briefed); these can be planned into the budget and included in the schedule.

Figure 6.4 A high-level PBS for an office move

Now let’s look at the PBS for a stakeholder-led project. Figure 6.5 shows an illustrative extract of a PBS for the IRT program. The first thing that should be noticed is that the organizer is quite different. In fact, it looks rather like an organizational breakdown structure. In ­stakeholder-led projects, the primary driver of scope is the stakeholder groups and the individuals that make them up. In these projects, where the critical success factor is stakeholder-focused (remember the IRT CSF: “taxi and bus services committed to the solution”), the whole purpose of the project is engagement, and that is what defines the scope. This PBS needs further detail, which will come from the identification of stakeholder groupings (how the field of play is to be ‘segmented’) as well as the analysis of the engagement processes and communication mechanisms to be used.

Figure 6.5 A PBS for the IRT program

Stakeholder-sensitive projects sit rather uncomfortably between the two extremes shown in Figures 6.4 and 6.5. If you have ever struggled to structure your PBS; debated where to capture the ‘people elements’; weren’t sure whether training is its own product or should be positioned along with other delivery elements, then you may well have been dealing with a stakeholder-sensitive project. How you structure the scope does matter, and you were right to struggle with it.

Figure 6.6 (PBS1) is a possible structure for the Remploy project ­discussed previously. It combines both the approaches already shown with the technical deliverables in their work packages. Within the communications product, the work is structured by stakeholder grouping. For each of these groups, a further breakdown is required of the communication deliverables.

Figure 6.6 Possible alternative PBSs for Remploy

Provided for illustrative purposes only—not taken from actual plans for Remploy case

One problem with this approach is that it allows the communication and engagement elements to be seen as an ‘add-on,’ something that can be easily scoped out. And that’s the problem—it often is!

Figure 6.6 (PBS2) identifies the principal products; decommissioned factories, the new placement processes, and internal processes and places the stakeholder engagement activities alongside the technical ­deliverables. Consultation with existing employees and unions is an integral part of decommissioning the factories—you can’t do one without the other. PBS2 does not contain different products from PBS1, but the structuring of the project is now much more likely to focus attention and prioritize the critical stakeholder engagement outputs and activities.

The way projects are structured influences their implementation. Understanding the stakeholder mindset is critical when planning stakeholder-intensive projects like Remploy and the Cape Town IRT. The nature and level of stakeholder intensity must be reflected in the planning process—it really is too late to just add engagement on at the end.

Where did you decide to position your project on the stakeholder continuum? Is this being reflected in the planning, and delivery approaches that have been adopted? See a summary of the differences in Figure 6.7.

Figure 6.7 Modeling the stakeholder engagement

When Stakeholders Come First

We cannot emphasize enough, that stakeholders always matter on projects (even stakeholder-neutral ones), but in certain types of projects—­stakeholder-led projects—the approach to planning and structuring projects is different. The CPPRRSS process is now dominated by the stakeholder engagement process see Figure 6.8.

Figure 6.8 Planning steps for stakeholder-intensive projects

The scoping of the project is best approached by scoping the stakeholder involvement, which must take place. In projects like the IRT, the agendas of powerful stakeholder groups dictate the approaches and the solutions we end up with.

In stakeholder-led projects, indirect strategies are more likely to be adopted. In the IRT case, for example, it is critical that the local transport businesses accept and commit to the new IRT; it’s not just important, it’s not a risk, it’s a guarantee of failure if not achieved. An end-state not to be contemplated!

It is noteworthy that the project was run as a separately managed entity—a parallel project within a more extensive program. This is how you will most commonly see stakeholder-led projects executed. Parallel projects support the overall program, and while they do not specifically focus on the outputs defined in the program (in this case the rebuilding of roads and development of bus infrastructure), they do address the external stakeholder issues that arise, and that would undermine the realization of the overall program outcomes. Run as a separate but related project, stakeholder-led projects can focus on stakeholder-specific critical success factors.

Have you ever found yourself on a project where you just cannot work out what the real priorities are? Where you cannot get client agreement on the constraints or the success factors for the project? If so, then the chances are that the project either failed, had to be restructured, or at some point threatened to tear itself apart with indecision and stalling behaviors and unresolved issues. In stakeholder-led projects, the concept of the client becomes ‘interesting’ and complicated.

All projects exist within a hierarchy of constraints, and these ultimately dictate the structuring of every project and how decision making is made throughout the project. Constraints are owned by the client, and it is the project managers’ responsibility to deliver within these. Where this is not possible, they need to help the client identify whether and how these constraints can be modified and still meet the desired outcomes.

One of the unusual and complex characteristics of planning programs is the way that the CSFs of one project can end up being managed by another project. As illustrated in the IRT program (Figure 6.9), each ­project had very different CSFs, and somehow or the other, these must all be achieved.

Figure 6.9 Integration of CSFs across project streams in a program

The critical success factors of a project drive the way that the ­project is led and managed. Putting all of the streams in Figure 6.9 together into one project would make it unmanageable. You would be unable to resolve the conflicts that result from different and competing outcomes. In programs, this is dealt with by the various planning and management disciplines, which are designed to own and manage the constraints. It is only at program level that these competing demands can be considered and evaluated and the cross-project interdependencies understood and resolved.

Reflections

All projects need stakeholder engagement. The two extremes on the stakeholder continuum (Figure 6.2) provide important learning for all projects. Stakeholder-neutral projects are dominated by role-based stakeholders and demand clear governance and a shared and committed understanding of roles and responsibilities. Stakeholder-led projects are people-complex; agendas dictate what the project can achieve and what direction it can go in. At both these extremes, the challenges are clear, if different. Consider for your projects:

1. What are the critical success factors for your project? Are they ­technically-focused or people-focused?
2. Which of the case studies presented in this chapter is your project most like?
3. What kind of projects do you mainly deal with? Try ­positioning your most recent project on the stakeholders’ continuum. Was your project a stakeholder-neutral, stakeholder-sensitive, or ­stakeholder-led ­project?
4. Do you recognize any parallel projects in your business? How are they structured?
5. How have the needs of stakeholders influenced the way you plan and structure your projects?