Understanding how stakeholders interact with project teams is essential for anyone managing software projects. This article examines whether stakeholders can actively participate in the team and what that involvement looks like on a daily basis.
Many professionals ask if a project manager is considered a stakeholder in an organization. The answer reveals that roles often overlap, especially in complex projects. We will explore how stakeholders, including project managers, can influence planning, risk management, and team coordination when they are integrated into the project team.
What Is a Stakeholder in Project Management?
A stakeholder is any individual, group, or organization that can affect or be affected by a project. Their level of involvement varies; some engage actively in meetings, while others observe from a distance. Identifying the right stakeholders early on can improve decision-making and keep projects on track. Stakeholders in project management include not only investors but also team members, department heads, end users, regulatory bodies, and sometimes the public. Project managers typically start by listing stakeholders, which can be direct (actively involved) or indirect (less frequently engaged but still monitoring outcomes), such as C-suite leaders or nearby residents.
Stakeholder vs. Shareholder: What’s the Difference?
A shareholder is someone who owns a portion of a company and hopes to see the stock price rise. In contrast, a stakeholder can be anyone from a factory worker to a city planner. These individuals may not own any shares, but they each have a personal interest in the project’s success.
Understanding this distinction is crucial when defining stakeholders in a project. Stakeholders have diverse interests; some prioritize timelines, while others focus on quality or budget. Shareholders are one type of stakeholder, but not all stakeholders are shareholders. In project planning, teams must carefully manage these varying interests.
Types of Stakeholders in a Project
Project stakeholders come in various forms, and not everyone shares the same vision for the project’s outcome. Recognizing who the stakeholders are helps manage expectations and directs communication effectively. Here’s how to identify stakeholders based on their type:
Internal vs. External Stakeholders
Internal stakeholders work within the same organization or share the same email domain as the project. This group includes developers, analysts, department heads, finance controllers, and C-suite executives, all of whom contribute to planning, decision-making, or daily operations. Their close proximity often means their feedback can be received at any time.
External stakeholders operate outside the organization, including clients, third-party suppliers, government regulators, neighborhood associations, media outlets, investors, local businesses, advocacy groups, and sometimes the general public.
Key Stakeholders vs. General Stakeholders
Key stakeholders possess the authority to significantly impact the project with a single decision. Project sponsors, principal customers, and senior executives can approve budgets, halt progress, or alter deliverables on short notice. General stakeholders, while still important, typically have less frequent input.
General stakeholders may not have decision-making power but still care about the project’s outcome. This group can include individuals from accounting, sales, or customer support. Their insights can influence decisions, but they usually do not participate in high-level approvals.
Stakeholder Hierarchy in a Project
Stakeholders are often organized in a hierarchy, ranking their influence on the project. Chief executives, funding sponsors, and high-profile backers typically occupy the top tier. Below them are project managers and their deputies, followed by engineers, designers, and quality assurance professionals.
Can a Stakeholder Be Part of the Project Team?
In numerous projects, stakeholders play a role beyond that of mere observers or advisors; they can also serve as active team members. This is particularly prevalent in smaller or fast-paced projects where swift decision-making is essential. Therefore, is it possible for a stakeholder to be part of the project team? Yes, and while this arrangement can provide several advantages, it also carries potential risks if not managed effectively.
When Stakeholders Are Also Team Members
A client who actively participates in daily meetings or a manager who oversees the budget can bring valuable real-world insights to the team. Having these voices in the room can streamline approvals and feedback, accelerating the build-test-adapt cycle. Agile methodologies often embrace this collaboration, as closer input reduces surprises at the project’s conclusion.
Role Overlap: Project Manager as a Stakeholder
The project manager often fulfills dual roles, leading the team while representing the organization’s goals and needs. Their decisions impact both the process and the final outcome, making them a vital part of both planning and execution. They must balance team needs, deadlines, risks, and overall project success.
Pros and Cons of Dual Roles
When a stakeholder takes on a role within the project team, it can create both advantages and challenges. Here are the main pros and cons to consider:
Pros
- Enhances communication between teams and stakeholders
- Accelerates decision-making
- Aligns the project with business objectives
- Facilitates quick resolution of issues
Cons
- May lead to conflicts of interest
- Can blur roles and responsibilities
- Stakeholders might prioritize personal goals
- Risk of pressure on the team to conform to one perspective
How to Identify Stakeholders in a Project
Identifying stakeholders is often the first step a project manager should take. Pinpointing these individuals or groups allows everyone to understand who is affected and who has decision-making power before the work begins. Early clarity helps minimize surprises.
Stakeholder Identification Techniques
A quick review of the project’s purpose and the boundaries outlined in the charter usually provides a solid starting point. The project sponsor, core team, and paying customer typically emerge first, but the list soon expands to include suppliers, end-users, permitting boards, and sometimes local residents.
Tools for Stakeholder Analysis
Once stakeholders are identified, the team needs a method to rank them by interest. A Power-Interest Grid or Stakeholder Matrix can visually represent this information. Decision-makers in the high-power, high-interest quadrant receive regular updates, while passive observers in lower tiers may only be informed of key milestones.
Creating a Stakeholder Map
A stakeholder map visually organizes everyone involved in the project, ranking them by influence and interest. This tool allows the team to quickly identify who is eager to assist, who is neutral, and who may resist. The map also serves as a practical guide for determining communication frequency and methods for each stakeholder.
Managing Stakeholders Throughout the Project
Effectively managing stakeholders is crucial for keeping a project on track. This task is not a one-time effort; it requires ongoing attention. Stakeholder needs and influence can change at various stages of the project. By regularly identifying and reviewing stakeholders, the project team can adapt to these changes, prevent delays, and foster stronger engagement over time.
Engagement Strategies
Each stakeholder brings a unique background and level of interest in the project. Some may want to be actively involved in decision-making meetings, while others prefer occasional updates. Balancing these diverse needs requires open communication, sharing brief updates, and being clear when providing details.
Stakeholder Communication Plan
A well-defined communication plan helps maintain clarity and consistency. This plan outlines who receives which messages, how often, and through what channels. For instance, a dedicated supporter may appreciate weekly updates, while a less involved sponsor might only need a summary at the end of each phase.
Updating and Reassessing Stakeholders
As the project progresses, it’s essential to revisit the stakeholder list. Roles may change, new stakeholders may emerge, or some may become irrelevant. Regularly reassessing the stakeholder list ensures that all important voices are heard. Keeping the stakeholder map updated helps the team stay aligned with current needs.
💡 Pro tip: Morningmate is a powerful project management software that helps you keep both internal and external project stakeholders aligned. You can assign and prioritize tasks, give everyone visibility into timelines, and make sure projects stay on track. External stakeholders can join as free guests, view tailored project updates, and share feedback directly in Morningmate—making stakeholder collaboration smoother and more transparent.
Common Challenges in Stakeholder Management
Every project, regardless of size, can become entangled in the interests of its stakeholders. While stakeholder management seems straightforward in theory, real-world dynamics, misunderstandings, and human error can complicate matters. The key is to identify potential pitfalls before they derail progress.
Misaligned Expectations
Stakeholders often enter a project with differing expectations, which can lead to conflict. For example, one manager may prioritize a quick turnaround, while another focuses on meticulous budget details. When the balance between speed, quality, and cost shifts, it can create tension. A brief, face-to-face conversation before the project begins can help align these expectations.
Conflict Between Stakeholders
Different departments often have competing agendas. For instance, the finance team may want to cut costs, while marketing seeks to enhance the project with flashy features. When these conflicting priorities arise simultaneously, decision-making can stall.
Communication Barriers
Missed messages can result in confusion, delays, and frustration. In larger or remote teams, important communications can easily get overlooked. To prevent this, provide clear updates, conduct regular check-ins, and maintain a shared record of information. This approach keeps everyone informed and focused on the same goals.
FAQs About Project Stakeholders
Do stakeholders change throughout the project?
Yes, stakeholders often change during a project. A department head might leave, a new executive may join, or a former adversary could take charge. This turnover is why many guides recommend reviewing the stakeholder map at each milestone. Regularly updating the list helps keep everyone informed and engaged.
Can stakeholders make project decisions?
Certain key players—such as sponsors, senior VPs, or clients who approve changes—hold significant decision-making power. While others can offer ideas and feedback, they typically do not have the final say. The project manager is responsible for synthesizing these diverse perspectives into decisions that guide the project toward its objectives.
Is the client always a stakeholder?
The client, who funds the project and will ultimately use the results, is indeed a key stakeholder. However, they are not the only one. Engineers, sales representatives, suppliers, quality officers, and even regulators all contribute to the project’s outcome. Each plays a role in shaping the final result.
Simplify Stakeholder Management with Morningmate
Managing stakeholder roles, updates, and communication can be challenging, but Morningmate makes it easier. This simple project collaboration tool allows you to track tasks, share updates, and keep everyone aligned in real-time. Whether you’re coordinating with internal teams or external clients, Morningmate streamlines the process.
