Definition of Stakeholder:« Back to Glossary Index
The first step in organizing a Lean Six Sigma process improvement project is to identify the project’s stakeholders — all parties that can influence the course of a project or will be affected by the outcome of the project.
Stakeholder-analysis should be performed at the beginning of a project to identify parties that can support or hinder the progress of a project, and to define communication strategies to inform the appropriate stakeholders on the team’s progress and to advocate for ongoing support of the project.
Overview: What are stakeholders?
Lean Six Sigma process improvement projects can include the following categories of stakeholders:
- Members of the project team
- Project sponsors — Typically a Six Sigma Master Black Belt.
- Functional manager — Authorizes resources and personal within a department or division of the organization.
- Upper management — Sets the strategic goals of the organization. Support from upper management is crucial to the approval of future improvement projects.
- External parties — Anyone outside of the organization with an interest in the outcome of the project. External parties can include customers, financial investors, regulatory bodies, and industry associations.
A detailed strategy for engaging stakeholders in the development of the project can promote a sense of ownership amongst the project’s stakeholders and secure their buy-in, as well as improve the odds that any process change proposed at the completion of the project will be implemented by the organization.
The benefits of stakeholder-analysis
Stakeholder-analysis involves identifying a project’s stakeholders, defining each stakeholder’s relation to the project, assessing a stakeholder’s interest versus their influence (or power) on the outcome of the project, and determining strategies to prioritize and gain the support of key stakeholders with considerable influence within the organization.
Stakeholder-analysis can promote ownership of the project’s outcome among the stakeholders
A thoroughly planned and flawlessly executed process improvement project is likely to generate valuable strategies that will benefit an organization’s bottom line. However, if an influential group of stakeholders has a strong bias against the very premise of the project, failure to address these concerns before expending resources moving the project forward may doom the project regardless of the potential value of the proposed improvements.
Stakeholder-analysis identifies stakeholder’s opinion of each about the project and how it needs to change for the project to move forward.
Support from key stakeholders can secure needed resources
Stakeholder-analysis involves identifying influential stakeholders and determining their interests in the project. Having key stakeholders help shape your project in its early stages can ensure their buy-in and secure their support for the project outcome. These stakeholders can also provide valuable input and guidance to overcome challenges that arise.
Why are stakeholders important to understand?
Stakeholders are responsible for implementing the changes proposed at the outcome of a project and will judge the success of a project. A thorough stakeholder analysis that clearly details each stakeholder’s influence on the course of a project and their role in implementing the proposed changes of a project should be completed at the onset of a project.
Managing “driving” or “restraining” forces on the progress of a project
Identifying which stakeholders are likely to present opposition or support for each stage of a project is critical for developing an effective change management strategy.
External stakeholders can have a considerable impact on the outcome of a project
External stakeholders can include regulatory bodies, trade associations, and non-governmental organizations that monitor an organization’s compliance with established standards, regulations, and business practices. Engaging these stakeholders throughout the development of a project can avoid serious and potentially costly issues during the implementation of a project’s outcomes.
Power Interest Matrix
Construct a power interest matrix that divides stakeholders into four categories according to their power vs. their interest and utilize the following strategies for communicating with stakeholders in each category:
- High Power & Low Interest – Keep satisfied
- High Power & High Interest – Manage closely
- Low Power & High Interest – Keep informed
- Low Power & Low Interest – Monitor with minimum effort
Stakeholders within the chemical industry
Chemical manufactures and regulatory agencies must closely monitor and assess potential routes for chemicals to enter the environment and biological systems. Stakeholder-assessment in the chemical industry will identify individuals and available resources that can help identify potential issues with compliance as they arise.
4 best practices when managing stakeholders
Despite the importance of stakeholder-management to the success of a project, a proper strategy only needs to cover two main objectives:
- Identifying key stakeholders and details about their role in the project.
- Effective communication strategies to provide stakeholders with the necessary information to match their interest in the project and their power to influence the project.
The following best practices can serve as guide for project managers as they develop a stakeholder-management strategy.
1. Define each stakeholder’s roles and responsibilities
During the initiation phase of a project, ensure that stakeholders are aware of the commitment expected of them for the duration of the project, including a well-defined role and the responsibilities of the role, the frequency and duration of project meetings, travel obligations, and the tools that will be used to share information about the project.
2. Remove boundaries to collaborative work
Stakeholders will be more engaged in a project that rapidly draws knowledge across departments and brings in fresh ideas from unexpected sources. Implementing cloud-based solutions and collaborative project management software into a project’s toolset can foster team building and idea sharing that can inspire the participation of all parties involved.
3. Keep momentum going by maintaining communication
When the project kicks off and gets momentum, do not assume stakeholders share in your enthusiasm. Ensure stakeholders move forward with project by keeping a consistent schedule of status meetings catered to the needs of each group of stakeholders.
Frequently Asked Questions (FAQ) to identify stakeholders
1. Will your project impact the surrounding community?
Consider any additional noise that the project will create, additional land development required to facilitate the project and the significance of the allocated land to community groups, and the impact of the project on nearby traffic or temporary road blockages, for example.
2. Who must sign off on this project and who could prevent its approval?
Consider who reviews risk management for the project, who must sign-off on changes to the project, and any regulatory requirements that need to be considered for the project.
3. Who can influence the opinion of your stakeholders?
Consider business and community leaders as well as media influencers who may have a strong opinion about your organization or the project that impact stakeholders’ opinions.
The benefits of a successful stakeholder analysis
The most important outcome of a successful stakeholder analysis is determining which stakeholders will support a project and which stakeholders will hinder a project. This key piece of information will determine the appropriate strategy for managing stakeholders throughout the duration of the project.« Back to Dictionary Index