Intro to Project Management: Project Stakeholder Management - Identifying Stakeholders, Stakeholder Analysis Power/Interest Grid Power/Influence Grid Salience Model

What This Is

Identifying stakeholders is a crucial step in project management that helps project managers understand who is impacted by the project, what their interests are, and how they can influence the project's outcome. This knowledge enables project managers to develop effective communication strategies, manage expectations, and mitigate potential risks. For example, when building a new highway, stakeholders might include local residents, government officials, construction workers, and environmental groups. A project manager must identify and analyze these stakeholders to ensure the project is delivered on time, within budget, and meets the needs of all parties involved.

Key Terms & Formulas

• Stakeholder: An individual, group, or organization that has a vested interest in the project's outcome.
• Stakeholder Analysis: A process to identify, analyze, and prioritize stakeholders based on their power and interest.
• Power/Interest Grid: A tool to categorize stakeholders into four quadrants: Keep, Engage, Manage, and Eliminate.
• Power/Influence Grid: A tool to categorize stakeholders based on their power and influence.
• Salience Model: A model to categorize stakeholders based on their level of influence, urgency, and importance.
• Influence: The ability of a stakeholder to affect the project's outcome.
• Interest: The level of concern a stakeholder has in the project's outcome.
• Power: The ability of a stakeholder to exert influence.
• Stakeholder Matrix: A tool to categorize stakeholders based on their level of power and interest.
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion).
• CPI = EV ÷ AC (Cost Performance Index = Earned Value divided by Actual Cost).
• SPI = EV ÷ PV (Schedule Performance Index = Earned Value divided by Planned Value).

Step-by-Step / Process Flow

1. Identify stakeholders: Gather information about individuals, groups, or organizations that may be impacted by the project.
2. Analyze stakeholders: Use tools like the Power/Interest Grid, Power/Influence Grid, or Salience Model to categorize stakeholders based on their power and interest.
3. Prioritize stakeholders: Based on the analysis, prioritize stakeholders based on their level of influence, urgency, and importance.
4. Develop a stakeholder management plan: Create a plan to engage, manage, and communicate with stakeholders throughout the project.
5. Monitor and adjust: Regularly review and update the stakeholder management plan to ensure it remains effective.

Common Mistakes

• Mistake: Failing to identify all stakeholders, particularly those with low power and interest.
• Correction: Conduct thorough stakeholder analysis and surveys to identify all stakeholders, regardless of their perceived level of power and interest.
• Mistake: Assuming stakeholders' interests are static and unchanging.
• Correction: Regularly review and update stakeholder analysis to reflect changes in stakeholders' interests and priorities.
• Mistake: Failing to communicate effectively with stakeholders.
• Correction: Develop a clear and concise communication plan that addresses stakeholders' needs and concerns.

Exam Tips

• Tip: Be prepared to apply stakeholder analysis tools to real-world scenarios.
• Tip: Understand the differences between the Power/Interest Grid, Power/Influence Grid, and Salience Model.
• Tip: Be able to explain the importance of stakeholder management in project delivery.

Quick Practice Questions

1. If a stakeholder has high power and low interest, what quadrant would they fall into on the Power/Interest Grid? Answer: Engage. Explanation: Stakeholders with high power and low interest require engagement to ensure they are aware of the project's progress and potential impacts.
2. If the CPI is 0.8, is the project under or over budget? Answer: Under budget. Explanation: A CPI of 0.8 indicates that the project is earning value at a rate that is 80% of the planned value, suggesting that the project is under budget.
3. What is the primary purpose of the Salience Model? Answer: To categorize stakeholders based on their level of influence, urgency, and importance. Explanation: The Salience Model helps project managers prioritize stakeholders based on their level of influence, urgency, and importance.

Last-Minute Cram Sheet

• Stakeholder: An individual, group, or organization with a vested interest in the project's outcome.
• Power/Interest Grid: A tool to categorize stakeholders into four quadrants: Keep, Engage, Manage, and Eliminate.
• Power/Influence Grid: A tool to categorize stakeholders based on their power and influence.
• Salience Model: A model to categorize stakeholders based on their level of influence, urgency, and importance.
• Influence: The ability of a stakeholder to affect the project's outcome.
• Interest: The level of concern a stakeholder has in the project's outcome.
• Power: The ability of a stakeholder to exert influence.
• Stakeholder Matrix: A tool to categorize stakeholders based on their level of power and interest.
• EV = % complete × BAC (Earned Value = percent complete times Budget at Completion).
• CPI = EV ÷ AC (Cost Performance Index = Earned Value divided by Actual Cost).
• SPI = EV ÷ PV (Schedule Performance Index = Earned Value divided by Planned Value).
• Stakeholder analysis is not a one-time activity; it should be regularly reviewed and updated throughout the project.
• Stakeholder management is not just about communication; it involves understanding and addressing their needs and concerns.
• The Power/Interest Grid and Power/Influence Grid are not interchangeable; they serve different purposes in stakeholder analysis.