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Understanding Project Stakeholder Psychology

The Path to Effective Stakeholder Management and Engagement

SECOND EDITION

by Aurangzeb Z. Khan
Department of Management Sciences,
COMSATS Institute of Information Technology,
Islamabad, Pakistan

and

Miroslaw J. Skibniewski and John H. Cable
Project Management Center for Excellence,
James A. Clark School of Engineering,
University of Maryland
College Park, Maryland, USA

 



Abstract

Effective stakeholder management and engagement is now universally acknowledged by project manage­ment practitioners and academics as a prime critical success factor for all projects. However, many pro­jects still encounter serious unaddressed problems, issues and challenges in dealing with their stake­holders, espe­cially external ones. These can have damaging consequences both for the projects and their stake­­holders. A major cause for this deficiency is the evident paucity of knowledge about the underlying psycho­logical factors which profoundly influence stakeholders to act as they do towards projects. On many projects, especially in construction and civil infrastructure development, external stakeholders collec­tively tend to constitute an exceedingly diverse, large and complex community and their actions may range from supportive to neutral to adversarial. These stances can change over time potentially increasing the danger level for the project if not handled properly.

Based on an in-depth analysis of available information on numerous large completed and on-going pro­jects across the globe, mainly in construction and civil infrastructure development, this research attempts to address this knowledge gap. It identifies and discusses six key psychological factors – motiva­tion and concern, expectation and perception, and attitude and behavior – which apply universally to all internal and external stakeholders (individual, organizational or otherwise) on every project. A thorough under­stand­ing of these factors and why they influence stakeholders to adopt positions pro or contra pro­jects is essential in order to assist project owners, planners and executors craft effective management and engage­ment strategies which enable the development of an amicable, ethical, mutually beneficial and sus­tainable relationship with their stakeholders throughout the project life-cycle. By doing so, they can maxi­mize the opportunities for their projects and concurrently and proactively reduce or minimize the threats to them, existential or lessor, which typically would ensue from stakeholder opposition to their projects.

Introduction

Stakeholders are now acknowledged as the key driving force and most important critical success factor on every project. Even if a project is successful in the narrow conventional sense in that it achieves its goal within its cost, time, scope and quality constraints, modern interpretations of project success hold that the project cannot be considered truly successful if key stakeholders are dissatisfied with the way in which it was undertaken or if significant and unresolved stakeholder conflicts and issues emerged prior to project initiation, during the course of the project life-cycle or subsequent to project completion.

However, although the criticality of effective stakeholder management and engagement is undisputed by project management academics and practitioners, and in recent years has emerged as a major thematic area of research in which a voluminous body of literature now exists, major conflicts and issues relating to stakeholders are inevitable in most projects and are identified in several project performance surveys undertaken over time as constituting a prime reason for ‘project failure’. Long is the list of projects which experienced cost and schedule overruns, unwanted and unanticipated scope modifications, severe reputa­tional damage, or which were doomed to premature termination because of flawed stakeholder manage­ment and engage­ment by project decision-makers. Effective stakeholder management and engagement is hence an existential (and ethical) imperative for projects and is at least as important as effectively managing their cost, time, scope, quality and other ‘hard’ or ‘technical’ aspects. It is also a highly complex and challenging task because it invariably requires a good understanding of psychology and allied disciplines such as sociology which normally do not apply to the hard or technical aspects.

Very few contributions specifically highlighting stakeholder psychology have appeared in the project stake­­holder literature. This dearth of material on this increasingly important but surprisingly still neglect­ed research area encouraged the authors to closely explore the relationship between psychology and project stake­holders. The two fundamental questions this research addresses are which major psycho­logi­cal factors specifically influence project stakeholders on construction and civil infrastructure projects, and in what relationship do these identified psychological factors stand to each other.

The outcome of this research was the development of a psychological knowledge framework for projects. The authors are of the view that by applying this framework projects can, on the one hand, signi­ficantly reduce the level of opposition they encounter from their stakeholders and, on the other, simul­tan­eously identify and exploit oppor­tunities which present themselves in the course of their interaction with them. Doing so may increase the chance of project success and boost project effective­ness and efficiency. This psychological knowledge framework, which is based on simple logic and supported by extensive empirical analysis, provides detailed insight into the reasons why stakeholders adopt positive or negative stances and courses of action towards projects and shows how these stakehol­ders can be used as a force in favor of rather than against the project. It is hence of potentially immense benefit to project owners, managers, planners and executors.

For their research the authors conducted a detailed and systematic analysis of information from multiple sources available in the public domain on over fifty high-profile, well-documented and large and contro­ver­sial on-going and completed projects across the globe primarily in Construction and Civil Infrastruc­ture Development (CCID). CCID encompasses a broad category of projects which in the understanding of the authors include, inter alia, the creation of large residential and commercial buildings, major industrial facilities, dams, transportation systems (highways, rail, air- and seaports), energy systems (oil and gas pipelines, power generation stations and power transmission infrastructure), mine development, commu­ni­cation infrastruc­ture, and urban regeneration schemes. Their research resulted in the identification of six fundamental and inter-related stakeholder psychological ‘attributes’ grouped into three pairs: motivation and concern, expectation and perception, and attitude and behavior. The authors have also determined that these attributes are common to all project stakeholders regardless of whether the stakeholders are internal or primary, meaning, they have contractual relationship with and/or legal obligations to the project and are consequently actively involved in it and normally have a vested interest in its success, or whether they are external or secondary, meaning they lie outside the project’s formal direct control and who may or may not want the project to succeed depending on whether they are positively or negatively affected by the project during its life-cycle or subsequently when it enters its operational phase. Further­more, the attributes apply to stakeholders of any type – individuals, groups, communities, organizations and even countries – and to projects in all categories, regardless of duration, size, level of complexity and physical location. In other words, these six attributes have universal application.

Understanding these six psychological attributes and systematically collecting data and information on them is an integral part of the complex process of stakeholder analysis which constitutes the third step in the five step process of project stakeholder management and engagement which the authors proposed and discussed in their paper on a suggested project stakeholder governance frame­work which was presented at the University of Maryland’s first annual project management symposium in 2014. Sequentially the steps are contextualization, stakeholder identification, stakeholder analysis, and design and implementation of stakeholder management and engagement strategies. As the stakeholder analy­sis is dependent on the pre­ceding steps of stakeholder contextualization and identifi­cation, it is crucial that the latter are thoroughly undertaken. Stakeholders obviously must be comprehen­sively and accurately identified and categorized before they can be analyzed. All major project stakeholder identification methods were explored and discussed by the authors in their paper on the subject they presented at the University of Maryland’s second annual project management symposium in 2015. The identification of internal stake­holders is comparatively easier and quicker to undertake than for the external stakeholders. Internal stakeholders on a large CCID project for instance are typically the project owner, sponsor or client, project manager and team, financiers, consultants, contractors and sub-contractors, vendors, hired labor and various involved public agencies; important external stakeholders usually include the affected residents and business community, environmentalists, political entities, the media, academia, and other public agencies which are not involved in the project but have some interest professional interest in it. Failure by the project to identify some external stakeholders – and consequently not to engage them – can result in complications later.

Projects must be mindful of the practical hurdles and limitations associated with analyzing their stake­holders’ psychological attributes. Both the internal and especially the external stakeholder community can be very large and complex in terms of, inter alia, (for organizations) their respective missions, interests, goals, priorities and culture and (for individuals, groups, communities) their social and cultural diversity, economic background, objectives, awareness, education and intelligence, family upbringing, norms, values and personal or shared experiences and so forth. The stakeholder psychological attribute analysis is only as useful as the quality of information it is based on, meaning, in order for it to be useful the information must at least be accurate, precise, complete, relevant, specific, up-to-date, reliable and actionable. Finding information which satisfies this set of criteria on all stakeholders, especially external ones, can be very difficult, time-consuming, costly and sometimes simply impossible to do. Powerful or influential stakeholders must hereby be prioritized as these can significantly affect the project in either the positive or negative sense. Sentiments towards projects may change immensely and rapidly in response to project developments and such chan­ges must be reflected in a prompt corresponding change in the project’s stakeholder management/engage­­ment strategies. This implies that a situational or periodic repeat of the information collection task and stakeholder attributes analysis would be necessary, adding to the process complexity and cost.

Hence, attempting to devise and implement effective and customized stakeholder management/ engage­ment strategies on the basis of the stakeholder attributes analysis can be highly challenging, tedious and expensive and offers no guarantee of success. Without qualified support, for instance in the form of a team of highly skilled, competent, creative and experienced analysts or hired consultants, such activities would excessively burden project managers and teams already heavily burdened with the arduous technical and administrative tasks they typically encounter in the day to day operations of their projects.

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Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 4th Annual University of Maryland PM Symposium in May 2017. It is republished here with the permission of the authors and conference organizers.



About the Authors        


Dr. Aurangzeb Z. Khan

COMSATS Institute of Information Technology
Islamabad, Pakistan

 


Dr. Aurangzeb Z. Khan
is an Assistant Professor in the Department of Management Sciences at the COMSATS Institute of Information Technology in Islamabad, Pakistan. He introduced Pakistan’s first master degree program in project management at his university in the fall semester 2008. His prime areas of research are project stakeholder management, and project monitoring and evaluation, which he teaches to project management graduate-level students. He can be contacted at aurangzeb_khan@comsats.edu.pk

 


Dr. Miroslaw J. Skibniewski

University of Maryland
College Park, MD, USA

 


Dr. Miroslaw Skibniewski
is a Professor in the Center of Excellence in Project Management at the University of Maryland. He is also Editor-in-Chief of Automation in Construction, an international research journal published by Elsevier, and North American Editor of the Journal of Civil Engineering and Management published by Taylor & Francis. An author/coauthor of over 200 research publications, he lectures on information/automation technologies in construction, construction equipment management, and legal aspects of engineering. Miroslaw can be contacted at mirek@umd.edu

 


John Cable

Director, Project Management Center for Excellence
University of Maryland, College Park, MD, USA

 


John Cable
is Director of the Project Management Center for Excellence in the A.J. Clark School of Engineering at the University of Maryland, where he is also a professor and teacher of several graduate courses in project management. His program at the University of Maryland offers masters and PhD level programs focused on project management. With more than 1,300 seats filled annually with students from many countries, including more than 40 PhD students, the program is the largest graduate program in project management at a major university in the United States.

John Cable served in the newly formed U.S. Department of Energy in 1980, where he was involved with developing energy standards for buildings, methods for measuring energy consumption, and managing primary research in energy conservation. As an architect and builder, Mr. Cable founded and led John Cable Associates in 1984, a design build firm. In 1999 he was recruited by the University of Maryland’s Department of Civil & Environmental Engineering to create and manage a graduate program in project management. In his role as founder and director of the Project Management Center for Excellence at Maryland, the program has grown to offer an undergraduate minor, master’s degrees, and a doctoral program. Information about the Project Management Center for Project Management at the University of Maryland can be found at http://www.pm.umd.edu/.

In 2002, PMI formed the Global Accreditation Center for Project Management Educational Programs (GAC). Mr. Cable was appointed to that inaugural board where he served as vice chair. In 2006, he was elected as chairman, a role he held through 2012. As Chair of the PMI GAC, John led the accreditation of 86 project management educational programs at 40 institutions in 15 countries in North America, Europe, the Middle East, Latin America and the Asia Pacific Region. John was awarded PMI’s 2012 Distinguished Contribution Award for his leadership at the GAC. He can be contacted at jcable@umd.edu.