Stakeholders

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Stakeholders: Why they like to be cared for and Should we care for them all equally?

❝ Life is perhaps the only painting that is painted with colours not entirely chosen by the painter ❞

It has been a common belief and understanding that stakeholders are those people who like to be cared for or whom project managers should care for—even though this may not be said so explicitly. But this raises two fundamental questions: firstly, why? And secondly, should we care for them all equally?

This common perception is partly fueled by the fact that stakeholders are defined as “all individuals, groups or organisations participating in, affecting, being affected by, or interested in the execution of the project” (IPMA ICB 4.0, 2015; p.145). The focus on the word affect, implicitly and unintentionally, draws one to think about the words empathy, attention and care.

There seem to be three main issues with this definition:

• This definition seems to ignore the helpful versus harmful context of stakeholder behaviour while talking about the affect, and in hindsight leads to feelings of sympathy and care for the people construed to be stakeholders.
• Secondly, the definition does not provide a clear view of how to differentiate between one who may affect from the one who is affected or perceived to be affected. For instance, take an example of an IT application development project. We may say that an owner, because of his/her investment and power, may affect the project. But at the same time, it is reasonable to say that s/he is also affected – or may perceive to be affected – by the project, its activities and the outcome. Thus the actions of the owner could affect the project, and at the same time, because of his/her own actions, he/she may be affected as well.

Such a situation, where a stakeholder is affected, while at the same time being affected, makes it very difficult for project staff to put in place the right strategies and care for the stakeholder, and it becomes very complex for the project staff to follow the best practices.

• Finally, the definition does not take into account the variety of forms in which a stake could occur or could be claimed; not everyone should be automatically assumed to have or hold a stake. People could just be stake-seekers, stake servers, stake-partners or stake sharers.

Looking further into the definition, one can see three categories of stakeholders, as described below. But looking at these three broad categories, they do not seem to be very distinct; this could make it very difficult for project staff to devise strategies for a mix of people deemed to be somewhere on the affecting-affected spectrum.

• Those who may affect: These could include owners, subject matter experts, project managers, government agencies, professional institutions, and people with some form of direct or indirect involvement.
• Those who are affected: These could include customers, neighbours, business owners, regulators, and society at large. The affect could be blown up by opinion leaders directly or indirectly affected by the project.
• Those who are perceived to be affected: These might be people who depend on information and reasoning to form a judgement, perception, or view of being affected by the project, its activities and its outcome in either a positive or a negative way.

The above discussion shows the complexities involved in holding a simple ‘blanket’ view of the concept of stakeholders. Literature from both academic and practical sources has been unanimous in emphasizing the importance of stakeholder management for project success. This puts project management staff under a lot of pressure to care for their stakeholders. It is unclear how many project managers in practice actually perform an involvement/interest or a power/interest, or a helpful/harmful analysis of stakeholders’ interests before putting in place strategies to care for them.

To make life easier for the project staff, we need to have more clarity around the question of who has a stake – and how much of a stake. I will try to explain this further with a presentation of a simple hypothetical scenario:

Scenario: Construction of house/building project 1

Stakeholders: Neighbors think that the construction will affect them in some way. Now neighbours in this case, are truly seeking to have a stake in the project. Just because they have property adjacent to the construction site does not necessarily entitle them to hold a stake in the project. They could perhaps be classed as stake-seekers, but they are not outright stakeholders. If they are stake-seekers, how much care they deserve will be a question that needs to be addressed. While doing traditional stakeholder analysis on an involvement/interest grid, you may say that they have low involvement and high interest. But if you look at them as stake-seekers, your perception of their involvement may be very different.

Even if the project staff do not perform a traditional stakeholder analysis (which one could argue is often the case), by just having a different term that clearly specifies the nature of stake, i.e. stake-seeker, the project staff will presumably be able to deal with the situation a lot better and improve chances of project success.

Given the above discussion, the time is ripe for rethinking the concept of stakeholder altogether. Rather than using the word stakeholder, we may need to coin more easy-to-use terms to ease the life of project staff. Terms such as Stake-seekers, stake partners, stake-collaborators, and stake servers, to name a few, have the potential for further consideration and integration into the body of knowledge. That may help project staff to be able to better understand the expectations and needs of people that they need to manage without necessarily doing a traditional stakeholder analysis.

To trigger further discussion on this emerging issue, we present a revised definition of the concept as follows:

21st-century definition of stakeholder: an individual, group or organisation who holds a stake, or claims or seeks a stake, or acts as a partner, collaborator, or server of someone who truly holds a stake, with the potential to affect or be affected by, or perceives itself to be affected by, a decision, activity or outcome of the project.

Acknowledgements: This article was previously published on projectmanagement.com