Effective Stakeholder Management for Project Success

Defining success in real estate project management is relatively easy, but achieving it is often more difficult. One of the most common reasons that projects fall short of expectations is the failure to correctly identify and address the concerns of the wide range of stakeholders impacted by any real estate project. The role of effective stakeholder engagement is often overlooked. This is visible across the Middle East and North Africa region, where projects face delays and cost overruns because of disgruntled third-party stakeholders dissatisfied with how things are.

Most project managers would agree that any successful project is delivered to the client’s expectations within the agreed timelines, cost parameters and to the required quality. However, the external stakeholder’s influence in achieving or preventing this success, is often dismissed as a subjective aspect beyond the control and scope of the project manager. 

Savvy project managers recognise the inherent dangers in ignoring the expectations of external stakeholders and make the effort to identify these stakeholders, engage them in the process and take measures to assure their expectations are met.

While it is not possible to please everyone all the time as some stakeholders may have mutually exclusive expectations, this should not dissuade the project manager from identifying those expectations and do whatever is possible to address them.

Broadly, a stakeholder is a person or entity who can affect or be affected by an ongoing project or its outcome. Therefore, the first step for successful project management is to identify all stakeholders, internal and external, early in the project life cycle and review who may influence or get impacted.

Client, developers, owners, investors, architects and contractors are obvious stakeholders as are government agencies governing traffic, planning and building codes. But many project managers fail to recognise other stakeholders such as neighbouring landlords or the department of public utilities. In Egypt for example, many external governing bodies are influential stakeholders with the ability to either accelerate or delay a project. Still, these stakeholders are not always addressed.

Once the full range of stakeholders have been ascertained, the next step is to correctly identify their interest, influence and expectations in relation to the project. The process requires the project manager to analyze both internal and external stakeholders’ positioning (level of interest) and power (level of influence), typically grouped into four groups:

• High power, high interest (investors, government bodies, owners)
• Low power, high interest (communities, protection agencies)
• High power, low interest (employees, regulators)
• Low power, low interest (competitors, suppliers)

This process should be undertaken iteratively throughout each stage of the project lifecycle, from initiation to close out.

Another important task for the project manager is to control and reduce risk. It typically involves creating a risk matrix, assessing and quantifying attributes (possibility and impact) and creating possibility / impact (PI) measures to manage and mitigate risk.

In summary, the successful delivery of any project is influenced by the ability to effectively manage stakeholder expectations. The key to optimum stakeholder management is understanding that any affected individual or organization can either positively or negatively impact any project delivery.