Importance of Stakeholders in Project Delivery

Let's talk about the criticality of stakeholders in project management.

How they play a crucial role in any project delivery and what challenges we face while dealing with them and what solutions you can apply.

In the dynamic world of project management, one factor consistently determines the difference between success and failure are the Stakeholders. 

Whether you’re launching a software platform, constructing a bridge or deploying a new healthcare system, ignoring stakeholders is a recipe for disaster or project failure.

"You cannot deliver value without first understanding what stakeholders value.” -Mark Langley

Who Are Stakeholders?

These individuals or groups, who are directly or indirectly impacted by a project's outcome, hold a pivotal role in shaping its direction, progress, and final delivery.

Stakeholders can be internal or external. They may include:

Project sponsors

Clients or customers

Project Team

Product Team

Engineering team

Government agencies

Communities

Regulatory authorities

Investors

Suppliers

Stakeholders vary as per the nature of projects that are to be handled. 

Each stakeholder group comes with its own set of interests, expectations and influence on the project.

As per PMI standards, Stakeholders are classified as below:

1. Power/Interest Grid

Stakeholders are classified based on their level of authority (power) and level of concern (interest) regarding the project outcomes:

High power, high interest – Manage them closely

High power, low interest – Keep them satisfied

Low power, high interest – Keep them informed

Low power, low interest – Monitor only

2. Power/Influence Grid

Classifies stakeholders by their power and influence on the project outcomes:

Helps identify those who can drive decisions or affect project execution.

3. Influence/Impact Grid

Classifies based on a stakeholder’s influence (active involvement) and impact (ability to affect project outcomes):

Useful for communication planning and stakeholder engagement.

4. Salience Model

Uses three attributes to classify stakeholders:

Power – Ability to impose will

Legitimacy – Rightful involvement

Urgency – Need for immediate attention

5. Direction of Influence

Based on the direction of influence on the project:

Upward – Senior management, sponsors

Downward – Team members, specialists

Outward – External stakeholders like customers, regulators

Sideward – Peers, other project managers

👍Why Stakeholders Matter: Lets understand using real Industry Examples

1. Tech Industry – Software Development

Imagine a tech company developing a new CRM tool. Developers focus on performance and scalability, but end-users care more about UX and quick access to data. Early engagement with these users helps avoid building a technically perfect but user-unfriendly tool.

Lesson: Stakeholders can steer a project toward real-world usability.

2. Construction – Infrastructure Projects

During the construction of a public highway, local residents may protest due to pollution, potential noise and displacement. Without early consultation, the project faces delays, legal battles or budget overruns. Locals inputs matter too.

Lesson: Public engagement can prevent conflict and ensure smoother execution.

3. Healthcare – Hospital System Implementation

In hospitals implementing new electronic health record (EHR) systems, failing to involve nurses and doctors leads to poor adoption and system inefficiencies.

Lesson: Clinical stakeholders must be involved from planning to training for successful integration.

4. Entertainment – Film Production

Studios, investors, directors and even fans are stakeholders in film production. Ignoring fan expectations in long-running franchises can lead to backlash and box office failures.

Lesson: Understanding and balancing diverse stakeholder interests is key.

📌Common Challenges in Stakeholder Management

✅ Conflicting Interests

Not all stakeholders want the same outcome. Internal departments may clash over priorities.

✅ Changing Requirements

Stakeholders may introduce new needs mid-project, risking scope creep.

✅ Lack of Engagement

Some stakeholders may be passive or unavailable, making it hard to gather input.

✅ Communication Gaps

Miscommunication can cause misaligned expectations and delays.

✅ Influence Imbalance

Powerful stakeholders may overshadow others, skewing the project away from balance.

✅ Absence or changes in the stakeholders list

Some stakeholders would have left the organisation or some changes would have happened in the original stakeholder list.

Easy and Effective Ways to Manage Stakeholders:

1. Stakeholder Mapping

Identify all stakeholders, assess their influence and interest using tools like the Power-Interest Grid.

2. Early Engagement

Involve key stakeholders in brainstorming, planning, and decision-making early to build buy-in.

3. Clear Communication Plans

Set expectations on how and when updates are shared (e.g., weekly reports, town halls).

4. Feedback Loops

Use surveys, beta tests, or pilots to gather feedback and adjust as needed.

5. Conflict Resolution Strategies

Address disagreements with empathy and data-backed solutions.

6. Use Project Management Tools

Tools like Asana, Trello, or Jira help track stakeholder input and decisions transparently.

7. Regular Check-ins

Keep the conversation going. Short but consistent meetings help manage expectations and reduce surprises.

Summary:

Stakeholders are not just passive participants, they are co-creators in the journey of any project. Successfully managing stakeholders requires more than just checklists; it demands empathy, strategy and consistent communication. By engaging them from the start, understanding their importance, prioritising them, anticipating challenges and proactively managing relationships, project leaders can not only meet project goals but also earn stakeholder satisfaction, earn trust and deliver value.