The critical need for effective stakeholder management

The critical need for effective stakeholder management [P127]

The ability of people to protest has increased exponentially with the advent of mobile communications and social media. In 2010, a single dedicated person can quickly generate a large protest movement. This applies equally to political, environmental and social movements.

Mega-projects will inevitably create opposition. The larger the project, the more opponents it is likely to generate, as Spike Milligan is quoted to have said: Money can't buy you friends but you can get a better class of enemy. Traditional construction management has focused on the ‘iron triangle’ of time, cost and scope. Today, this is not enough, in many parts of the world, ignoring the social aspects of a mega-project in 2010 will cause the project to fail!

Effective stakeholder management is mandatory for mega-project success in all advanced economies and in most emerging economies. If the project is sufficiently controversial, the protest movement can quickly spread globally. So what is ‘stakeholder management’ and how can it contribute to a profitable project outcome? Within the project, stakeholder management encompasses the project team (workers, managers, clients and customers) and the project supply chain. Effective engagement with the ‘supply chain’ has been a focus of reports since the 1994 including Latham and Egan. External to the project stakeholder management encompasses politicians, ‘the public’ and the media as well as people directly or indirectly impacted by the work or its outcomes.

Fortunately for both groups of stakeholders, including both the proponents of the project (supporters) and the opponents of the project, the art of stakeholder management remains the same. The key steps are:

Identify all of the stakeholders that matter at this point in time – who’s who and who’s important. There are always too many potential stakeholders to attempt to manger everyone.
Prioritise the stakeholders to see who is really important.
For the important stakeholders assess their wants and expectations and understand what the project needs from them (mutuality).
Develop specific communication plans for the key internal and external stakeholders.
Develop general PR communications for the wider audience.
Implement the communication plan(s).
Reassess the stakeholder community at regular intervals to see what is working and what is not and adjust accordingly.

Communication within effective relationships is the only ethical way to change stakeholder perceptions and expectations to the benefit of the project. Supporters need to be encouraged, opponents need to be managed and their opposition minimised. The skill is focusing on the right people at the right time. Two tools developed to assist in this process are the Stakeholder Circle® methodology and the SRMM® maturity model. These tools will be discussed within the framework of managing mega construction projects to optimise the stakeholder relationships in and around the project and minimise risk exposures. A high proportion of risks are directly related to people!