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Why effective stakeholder management is free

SERIES ARTICLE

Series on Effective Stakeholder Engagement 

By Lynda Bourne, PhD

Melbourne, Australia
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Stakeholder engagement is not an overhead and it is not discretionary! Your project is being done by one group of stakeholders for the benefit of another group of stakeholders. It is impossible to deliver a successful project without effectively engaging with your stakeholder community. The good news is the investment in stakeholder engagement is likely to be significantly less than the costs of dealing with problems and issues caused by not engaging with stakeholders effectively.

However, as with any investment in quality, assessing the return on investment (ROI) from effective stakeholder engagement is not straightforward. Determining the real ROI is a difficult question to answer accurately because no-one measures the cost of problems that don’t occur and very few organisations measure the cost of failure. This paper outlines one approach to calculating the ROI needed to support the business case for using a structured stakeholder management methodology within a business or project.

The stakeholder ROI problem is not unique; it is very difficult to value the benefits of an effective PMO, of improving project delivery methods (e.g., improving the skills of your schedulers), of investing in effective communication or of better managing risk. The costs of investing in the improvement are easily defined, but the pay-back is far more difficult to measure. However, just because something is not easy to measure, does not mean it is unimportant, meeting or exceeding stakeholder expectations is one of the primary definitions of project success.

There are two practical reasons why investing in effective stakeholder analytics is likely to deliver a valuable ROI:

  1. By knowing who the important stakeholders are at any point in time, the expenditure on other processes such as communication can be focused where it is needed most, generating efficiencies and a ‘bigger bang for your buck’.
  2. Stakeholders are a major factor in the risk profile of the work, their attitudes and actions can have significant positive or negative consequences and understanding the overall community provides valuable input to a range of processes including risk identification, requirements definition and schedule management.

At the most fundamental level, improving the management of stakeholders is directly linked to improving the quality of the organisation’s interaction with the stakeholders. The quality of the goods or services delivered to the end users or client (i.e., stakeholders) is improved as a result of being better informed of their requirements whilst undertaking the work. 

More (with references)…

To read entire article (click here)

Editor’s note: This series of articles on effective project stakeholder engagement is by Lynda Bourne, PhD, Managing Director of Stakeholder Pty Ltd (Australia) and author of the books Stakeholder Relationship Management and Advising Upwards, both published by Gower (UK). Dr. Bourne is one of the world’s leading authorities on program/project stakeholder relations. See her author profile below.

About the Author 

Dr. Lynda Bourneflag-australia150114-pmwj31-new-bourne-PHOTO

Melbourne, Australia 

Dr. Lynda Bourne is Managing Director of Stakeholder Management Pty Ltd – an Australian based company with partners in South America and Europe. Through this global network she works with organisations to manage change through managing the relationships essential for successful delivery of organisational outcomes.   Lynda was the first graduate of the RMIT University, Doctor of Project Management course, where her research was focused on tools and techniques for more effective stakeholder engagement. She has been recognized in the field of project management through her work on development of project and program management standards. She was also included in PMI’s list of 50 most influential women in PM.

She is a Fellow of the Australian Institute of Management (AIM) and a Fellow of the Australian Computer Society (ACS). She is a recognized international speaker and seminar leader on the topic of stakeholder management, the Stakeholder Circle® visualization tool, and building credibility and reputation for more effective communication.   She has extensive experience as a Senior Project Manager and Project Director specializing in delivery of information technology and other business-related projects within the telecommunications sector, working as a Senior IT Project Management Consultant with various telecommunications companies in Australia and South East Asia (primarily in Malaysia) including senior roles with Optus and Telstra.

Dr Bourne’s publications include: Stakeholder Relationship Management, now in 2nd edition, published in 2009, Advising Upwards published in 2011, and Making Projects Work, published in 2015. She has also contributed to books on stakeholder engagement, and has published papers in many academic and professional journals and is blogger for PMI’s Voices on Project Management.

Dr. Bourne can be contacted at [email protected].

To see more works by Lynda Bourne, visit her author showcase in the PM World Library at http://pmworldlibrary.net/authors/dr-lynda-bourne/