Stakeholder Management

In product management, stakeholder management is vital to ensure the success of a product from its inception to its launch and beyond. It involves carefully coordinating all individuals and groups with a vested interest in the product, including but not limited to customers, employees, investors, and suppliers. 

What is Stakeholder Management

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Stakeholder management is about building and nurturing relationships with individuals or groups who are either interested in or can influence the success of a product. It involves:

1. Identifying all relevant people or groups, internal (employees, executives, investors) and external (customers, partners, communities). 
2. Understanding and prioritising stakeholders based on their level of influence, interest, and potential impact on the product's success.
3. Developing strategies to effectively communicate, negotiate, engage, and manage relationships with each stakeholder group throughout the product development lifecycle.
4. Continuously monitoring and addressing their evolving needs, concerns, and expectations to gain support and minimise opposition. 

Stakeholder management aims to align the various stakeholder interests with the product vision and roadmap, leading to collaboration, risk mitigation, and successful product delivery. 

Identifying Stakeholders

Identifying stakeholders is the first step in stakeholder management. This process involves determining who has a vested interest in the product and could be affected by its success or failure. Stakeholders can be internal, such as employees and managers, or external, such as customers, suppliers, and investors. It is crucial to identify all potential stakeholders to ensure their needs and expectations are taken into account during the product's development and launch.

Stakeholder identification is not a one-time process but a continuous one. As the product evolves, new stakeholders may emerge, and their needs and expectations may change. Therefore, product managers must regularly reassess and update their stakeholder list to ensure they effectively manage all relevant parties.

I use this map to identify stakeholders:

In our recent course Fundamentals of Product Management, I dive deep into this topic and diagram. I show you, with real examples, how to think of the right stakeholders while creating this map for yourself.

There are two broad categories of stakeholders: Internal and External. Let's understand each in more detail.

Internal Stakeholders

Internal stakeholders are individuals or groups within the organisation who have a direct interest in the product. They include employees, managers, and executives. These stakeholders are often directly involved in the product's development and have a vested interest in its success. Their input and feedback are crucial in shaping the product's direction and ensuring it aligns with the organisation's goals and objectives.

Internal stakeholders also play a significant role in implementing changes and improvements to the product. They are often the ones who will be using the product daily, and their feedback can provide valuable insights into how we can improve the product. Therefore, it is essential to maintain open and regular communication with internal stakeholders to ensure that you meet their needs and expectations.

External Stakeholders

External stakeholders are individuals or groups outside the organisation interested in the product. They include customers, suppliers, investors, and regulatory bodies. These stakeholders can significantly influence the product's success, and their needs and expectations must be carefully considered and managed.

Customers, for instance, are the end-users of the product, and their satisfaction is paramount to the product's success. On the other hand, suppliers provide the necessary resources for the product's development and can influence its cost and quality. Investors provide the necessary financial resources for the product's development and expect a return on their investment. Regulatory bodies ensure the product complies with relevant laws and regulations, and their approval is necessary for the product's launch and continued operation.

Understanding and prioritising stakeholders

Stakeholder prioritisation is a crucial aspect of effective stakeholder management. Not all stakeholders carry equal weight or influence over a product's success. Therefore, it is essential to prioritise stakeholders based on their level of interest, influence, and potential impact. Here's how you can approach stakeholder prioritisation:

Identify and Map Stakeholders

As per the first step, create a comprehensive list of all individuals or groups with a vested interest in the product, both internal (employees, executives, investors) and external (customers, partners, communities).

Analyse Stakeholder Influence and Interest

Assess each stakeholder's level of influence over the product's development and decision-making processes and their level of interest or concern regarding the product's outcomes. 

Prioritise Stakeholders

An additional way of prioritising stakeholders is to divide them into categories such as:

1. High influence, high interest: These key stakeholders require close engagement and management. 
2. High influence, low interest: Keep these stakeholders satisfied but do not overwhelm them with excessive communication.
3. Low influence, high interest: Adequately inform and consult these stakeholders, but their inputs may not drive significant decisions. 
4. Low influence, low interest: Monitor these stakeholders but refrain from spending significant resources on them. 

Developing Strategies to Communicate Effectively

Once you have identified and prioritised your stakeholders, it is crucial to develop tailored communication strategies to engage with each group effectively. Effective communication is critical to building trust, managing expectations, and fostering stakeholder collaboration throughout the product development lifecycle. Here are some strategies to consider:

Stakeholder Communication Plan

Develop a comprehensive stakeholder communication plan that outlines each stakeholder group's specific communication needs, preferences, and channels. This plan should define:

• Communication objectives and key messages
• Communication channels (emails, meetings, reports, etc.)
• Frequency and timing of communication
• Responsible parties for communication

Having a well-defined plan ensures that communication is consistent, timely, and tailored to the specific needs of each stakeholder group.

Tailored Communication Approaches

Adapt your communication style and content to resonate with different stakeholder groups. For example:

• Executive stakeholders may prefer concise, high-level updates focused on strategic alignment and business impact.
• Technical stakeholders may appreciate detailed technical specifications and progress reports.
• Customer stakeholders may respond better to visuals, demos, and user-centric language.

Tailor your communication approach to the stakeholder's level of knowledge, interests, and communication preferences.

Stakeholder Engagement Activities

In addition to regular communication, plan stakeholder engagement activities to foster collaboration and gather feedback. These could include:

• Workshops or focus groups to ideate and gather requirements
• Demos or prototyping sessions to validate concepts and designs
• Surveys or interviews to gather feedback and sentiment

Active stakeholder engagement helps build relationships, ensures alignment, and increases stakeholder buy-in. 

Feedback Loops and Continuous Improvement

Establish feedback loops to gather stakeholder input and continuously improve your communication strategies. Regularly solicit feedback on the effectiveness of your communication and make adjustments as needed.

By developing tailored communication strategies and fostering active stakeholder engagement, you can effectively manage stakeholder relationships, align expectations, and increase the chances of product success.

Monitoring and addressing their evolving need

Stakeholder needs and expectations are not static – they evolve throughout a product's lifecycle. Hence, product managers must continuously monitor and address these changing needs to maintain stakeholder support and alignment. Here are some strategies to consider:

1. Establish feedback mechanisms: Implement formal and informal channels for stakeholders to provide feedback, such as surveys, focus groups, customer support interactions, and social media monitoring. This feedback can help identify shifts in stakeholder sentiment and emerging needs.
2. Conduct regular stakeholder analysis: Periodically revisit your stakeholder analysis to identify any changes in their level of influence, interest, or potential impact on the product. This can help you reprioritise stakeholders and adjust your engagement strategies accordingly.
3. Maintain open communication: Foster open and transparent communication with stakeholders. Encourage them to voice their concerns, needs, and expectations throughout the product lifecycle and be prepared to address them proactively.
4. Manage expectations: Clearly communicate any changes or delays in the product roadmap to stakeholders and manage their expectations accordingly. Transparency and open communication can help maintain trust and support, even in the face of challenges or pivots.

By continuously monitoring and addressing evolving stakeholder needs, product managers can maintain strong stakeholder relationships, mitigate risks, and increase the chances of product success over the long term.

Conclusion

Effective stakeholder management is a critical success factor for product managers. It involves carefully identifying, prioritising, engaging, and continuously monitoring the diverse individuals and groups with a vested interest in the product's success.

Product managers can build strong relationships, align expectations, and mitigate risks throughout the product life cycle by developing tailored communication strategies, fostering open collaboration, and proactively addressing evolving stakeholder needs.

Successful stakeholder management not only increases the chances of delivering a product that meets the needs of all stakeholders but also contributes to a collaborative and supportive environment where stakeholders feel valued and invested in the product's success.

Effective stakeholder management is not just a tactical necessity but a strategic imperative for product managers. It is a critical component of successful product development and a key driver of long-term product success in an ever-changing and competitive market landscape.