Thompson, R (2013), Source: http://www.mindtools.com/pages/article/newPPM_07.htm
Thompson, R (2013), Source: http://www.mindtools.com/pages/article/newPPM_07.htm

‍‍‍‍‍‍Description‍‍‍‍‍‍ | ‍‍‍‍‍‍Agile values‍‍‍‍‍‍ | ‍‍‍‍ | Agile Manifesto Principles | ‍‍‍‍‍‍Agile principles‍‍‍‍‍‍: | | ‍‍‍‍‍‍Agile practices‍‍‍‍‍‍ | | Discussion | Links from this KA to other KAs | References | External links | Read in another language Alternative name(s)
Stakeholder Management could also be called:
  • Project Stakeholder Engagement
  • Communication Management
  • People Management‍


Stakeholders such as shareholders, creditors and other people or group that may have a claim on the cash flows of the company. In addition, any people or any group can be a stakeholder in a project, who have an influence on the organization's decision-making and policy implications directly and/or indirectly. These people and groups include customers, suppliers, shareholders, governments, employees, staff, media, local residents and special interest groups (Stakeholdermap, 2007).

These stakeholders are closely related to the survival and development of enterprises, not just depend on shareholders. Some stakeholders share Company’s business risk and some who fund for the business activities. Projects conclude a large numbers of stakeholders who has different power and interests, and in order to meet requirement of stakeholders, enterprises operating decisions must consider their interests or to accept their constraints (Newcombe, 2003).

Stakeholder management is a process which includes: 1.Identifying stakeholders, 2. Analyse them and group/map them on the stakeholders map according to power/influence (Rose, 2005), 3. apply appropriate communication techniques to different groups of stakeholders.

‍‍‍‍‍‍Agile values‍‍‍‍‍‍

‍‍‍‍‍‍‍‍‍‘Customer collaboration over contract negotiation’ (Agile Alliance, 2013)
The main purpose of the project is to meet requirements of stakeholders and in order to achieve win-win, the project manager should choose customer collaboration over contract negotiation (Fowler&Highsmith, 2001). Through collaboration, project team members work with customers can deeply understand customers’ requirements, which the project would meet stakeholders requirement to maximum.

‘Individuals and interactions over processed and tools’ (Agile Alliance, 2013)
Although process and tools are critical in the project, sometimes the process is too complex and not flexible, which influence on the efficiency of the project. Interactions in the course of the project can improve the agility and results of the project, which ensure stakeholders satisfaction (Fowler&Highsmith, 2001).

‘Response to change over following a plan’ (Agile Alliance, 2013)
In most of construction projects, stakeholders are difficult to manage because of their wide range of interests and high frequency of changes in their requirements (Aaltonen, 2011). Agile methodology can enhance development times and furthermore, it can help the project manager quickly respond to stakeholders rapidly changing requirements. What is more, Agile methodology is more flexible to adapt to uncertainties, which can reduce risks for the project, and so it would guarantee the maximum benefits for stakeholders.

Communication (XP Value):
One of the key reason to improve stakeholder communication is to keep away from clash between all parties included, in particular within a project. There are numerous variables for example arrange, cost, plan, assets, goals, deliverables and finished objectives that stakeholders are included in or have a particular Interest. Subsequently great stakeholder communication is of vital importance.


Agile Manifesto Principles

  1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
    Stakeholder Management is a vital aspect of effective project management, and successful delivery of any project or programme (The Office of Government Commerce, 2011). Both ‘customer satisfaction’ and ‘early and continuous delivery of “valuable” software’ require extensive stakeholder engagement and management. The Association of Project Management (2014) outlines 10 key principles of stakeholder engagement and of them are the following;
    • Communication
    • Consulting early, and often
    • Taking responsibility

    Since customers or clients are key stakeholders, constant and consistent means of communication is required to firstly understand their needs. This facilitates for early and continuous delivery, as early and often consultation is likely to outline what the customer needs are. Taking responsibility will finally allow for early and continuous delivery of valuable software. For, without the initial communication, consulting and taking of responsibility, it is almost impossible to deliver valuable software, let alone understanding what ‘valuable software’ means to the customer (Amerongen, 2007 ).

  2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.
    Software development involves client interaction through the entire project or programme. This principle welcomes change in any phase of the project lifecycle, even in the late phases. It facilitates for client interaction and moreover, client satisfaction because the client is so involved in the development of their product. This links in smoothly with stakeholder management, as customers (and their end users) are a key ‘external’ stakeholder, and to keep this stakeholder satisfied, constant interaction is embraced no matter what stage the project is in. In this case, project success relies heavily not only on engaging stakeholders, but also embracing the changing requirements, as the two go hand in hand. For example, if stakeholder management or client engagement is perfect, but their changing requirements are not adhered to, the project will not be a success as the clients has not had their requirements delivered; rather, they are left with a project which no longer addresses their business needs.
  3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale. PMI(2013) approach to stakeholder management involves identifying stakeholders, developing plans to manage them during the project lifecycle, communication process, and monitoring and control processes. This will based on their requirements and potential influence on the success of the project. APM (2012) also includes the need to influence stakeholders. This is related to this agile principle in its iterative approach as stakeholders need to be constantly engaged and issues dealt with as they arise throughout the life cycle of the project. However, it differs from the agile principle in that delivery of software within the timescale of two weeks to two months might not be feasible.
  4. Business people and developers must work together daily throughout the project. Traditional APM or PMI methodology for stakeholder management involves laid down communication strategies based on identified stakeholders needs and expectations at the early stage of the project. Whilst this is still monitored and new matter addressed as they appear. It is not by default that all stakeholders will be present daily throughout the project. One way of making this happen will be to have a representative of the key stakeholders on site. This could however be expensive. The benefits of such an approach will then need to be analysed against the extra cost of resources.
  5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.Traditional PMI or APM approach aims to engage stakeholders to ensure that the acceptance criteria is met. the project team who do the work, that is. ‘the team’ (in Scrum) are also stakeholders. However, with the PMI or APM methodology responsibility for team development including motivation is placed more with the project manager rather than as part of stakeholder management with users being given priority. In the waterfall approach the method taken to get the work done will usually depend on the leadership style of the project manager or the team manager depending on the project.
  6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.Face to face conversation underpins agile methodology, as it enables stakeholders to effectively convey information from one development team to another. It also enables the visibility and transparency of stakeholders’ work. Sharp and Ryan, (2014). According to Roger (2015), in Traditional project management methodology, there is face-to-face conversation between key stakeholders, in the bargaining and negotiation stage of its linear structured approach, which is one of its most vital stages, the project cannot move forward until the process is discussed and finalised by key stakeholders. Miles (2015), agues that Prince2 basically, is a procedure driven methodology, prince2 projects are supervised in a logical and well structured way following defined stages. In the execution of each of these stages there is face-to-face conversation between key stakeholders to enable effective development throughout the process. Furthermore, in Prince2 methodology, face-to-face conversation is included in its business communication management plan for key stakeholder as a primary means of interaction. APM (2012), revealed, there is face-to-face conversation between stakeholder, because it is crucial for efficient progress in its business and social success.
  7. Working software is the primary measure of progress. Bowen (2011), noted that, Prince2 methodology effectively promotes stakeholders management, in the completion of software product, as well as meeting the product estimated delivery time, because delivery of working software is the primary measure of progress. Augustine (2005) identified that; APM can be related to this principle, because in APM, stakeholder’s management is included in the project developing process, as it is a primary means of achieving the project objectives. In the product development process, stakeholder’s management must be planned, executed, controlled, managed as well as speed, to foster the completion of the product, in order to meet specified requirement in terms of product functioning and features, as it is the only way to measure progress.
  8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.PMI (2008) points out that it is essential for the project team to effectively collaborate between all stakeholders. The project team and stakeholders must maintain a constant working pace. According to Vaishampayam (2014), there is no individual that wants to work for 60 to 80 hours in a week, as this will burn out the project team because they will be exhausted and loose the tempo of an excellent work. This will make the team to be unproductive in development. Furthermore, stakeholders should not request for too many changes in a project, as this will create too many problems and put much pressure on the project team. When a constant pace is kept and maintained until the end of the project, it helps to deliver good working product that will meet the stakeholders and end users requirement. According to OGC (2009), stakeholders are identified during the early phase of the project. Stakeholders must be engaged during the project through effective communication and the quality theme, which covers continuous improvement, enables the project team members to make amendments to any work procedure that may prevent them from maintaining a constant pace. Similarly, Bal (2003) indicates that engaging stakeholders in a project could make a difference between the success of a project or its failure. By considering what the stakeholders are expecting and working at fully at their needs, the project is likely to succeed in the long term. Having a well-managed stakeholder engagement process can aid the working together of the stakeholders thereby bettering their lives.
  9. Continuous attention to technical excellence and good design enhances agility. An LNPIB conference (2009) highlighted that this principle calls for awareness to the value of continuous improvement. According to PMI (2008), stakeholders are responsible for specifying the project requirements to the project team during the project. During stakeholders meeting, the project team members are able to clarify the project requirements with the stakeholders in other to ensure the project deliverable meets the stakeholders’ requirement that is enhancing technical excellence. Only when key stakeholders are asked about their points of view on the project objectives, will a clear idea of the project scope be derived. Good designs enhances normalized procedures and facts which enhances integrity and justifiable integration of the project deliverables according to the agreed business needs. Once there is a change request from the stakeholder, all changes must go through the normal change procedure in other to adapt a good design, only changes that are advantageous to the stakeholders are done and only the work specified by the stakeholder is done during the project (Lyngso, 2014).
  10. Simplicity — the art of maximizing the amount of work not done — is essential.
    This principle relates to project stakeholders management because according to PMI (2008), key stakeholders are identified during the early phase of a project life cycle. The project team mainly focus on the immediate concerns of the stakeholders and eliminates the trend of adding a requirement that are not specified by the stakeholders. OGC (2009) point out that stakeholders are identified and reviewed during the course of the project. The purpose of undertaking a project is to fulfil stakeholder expectation in accordance to the justification of the business case and there must be a clear understanding of the products required and the quality criteria for them. Stakeholders’ desires are determined through successful communications. APM (2012), identifies stakeholders as an iterative process which starts at the beginning of a project.
  11. The best architectures, requirements, and designs emerge from self-organizing teams.
    In traditional plan driven approach, project requirements comes from the end users and/or stakeholders. The architectures are assembled based on the project requirements by knowledgeable architects and the design is done by the architects and/or data engineers (Vaishampayan, 2014). This is liable to assumptions and interpretation. However, the traditional plan driven approach are manager-led teams. Similarly in Prince2 and PMI, the project requirements are described by the stakeholders and these are manager-led teams. The project manager may be required to set up the project team using team capability index such as skills, knowledge and experience as a criteria for selection of the project team members (Trish, 2011). The project manager may be required to acquire, develop and manage the project the team (PMI, 2008). However, the principle Manage by Exception in Prince2 supports self-organization within a set of tolerance (OGC, 2009). Furthermore, Lyngso (2014) indicates that, team members may be put together in a way that seems like self-organizing is possible, as long as the team ensures to make decisions, initiate work, do the required work, evaluate progress and results. Schwaber (2007) highlighted that self-organizing team is a team that consist of experienced and appropriate people, working closely together with a customer to fulfil the customer changing requirements may be generalized to a large organisation that provides increase in customers satisfaction, decrease time-to-market (better “time-to –benefit’’), improves quality, enhances product management and project portfolio, enhances development of product investment management (control and flexibility), decreases waste (enhances efficiency, development cost, productivity), improves management of risk, improves predictability and improves morale of the workforce.
  12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly. PMI (2008), indicates that the project team regularly meets up to reflect on the progress of the project, identify areas of improvement and implements the necessary improvements to the project. This brings about team improvement, process improvement and general improvement of the product. However, in traditional plan driven approach, projects mainly undergo changes that are defined in the process improvement plan (Vaishampayan, 2014). This agile principle is supported by PRINCE2 principle “learn from experience’’. The project team can use previous experience learnt in past project to manage stakeholders more efficiently in a new project (OGC, 2009). The evaluation of the project is done through effective communication between the project teams and key stakeholders (Lyngso, 2014).


‍‍‍‍‍‍Agile principles‍‍‍‍‍‍:

Agile principles which are relevant to stakeholder management includes:

‍‍‍‍Our highest priority is to satisfy the customer through early and continuous delivery of valuable software:‍‍‍‍‍‍
Stakeholder management involves prioritising and satisfying stakeholders and their needs and continuously engaging them throughout the project lifecycle. This will ensure, customer and other stakeholders satisfaction and a higher chance of customer acceptance for the end product.

Business people and developers must work together daily throughout the project:
Business people may include: executive sponsor, project owner, business analyst, product owner and departments and functions within the organisation. Communication, collaboration and building relationships are vital to interact with those stakeholders that are external to the project team. They have a great influence on the project success, thus, need to gain their support for the project. Communication plan is necessary in order to engage and communicate with all stakeholders which have a great influence on the project; to work together throughout the project may include, informing the executive of changed requirements and asking for advice and assistance in some form of decision making in the project.

Open information within an organization should be advocated:
The clear information can boost stakeholders management. they can get in the process, when the project meet problem, they can help address issues in time. meanwhile, stakeholders' requirements and changes can be adjusted in time. Then theirs satisfactions of the project can be improved.

‍‍‍‍‍‍Agile practices‍‍‍‍‍‍

Once stakeholders are prioritised in terms of importance, power and influence on the project, we need to develop ways to interact with them. Using agile methods and practices can help enhance engagement and communication with the various stakeholders throughout the project. But in agile, customers are considered more important to project success, hence the agile principles and practices are customer orientated.

Daily stand-up (Scrum practice): ‍‍‍‍‍‍It is important to maintain and keep stakeholders informed throughout the project because stakeholders can change over time, whether it is their requirements or change in interest i.e. moving across the stakeholder matrix.‍‍‍‍‍‍

Stakeholders are engaged at portfolio, program and team levels (agile software development): Daily scrum meetings enable everyone to participate in the meeting. It is particularly useful to engage stakeholders representatives (product owners) whilst the project team reports on the project progress and issues of the project. It engages all stakeholders, especially those who are in z‍‍‍‍‍‍one B‍‍‍‍‍‍ in the power/interest matrix; which includes the customers and project board (stakeholder matrix can be found in Rose, 2005) and is used to identify and analyse all stakeholders involved in the project.

Whole Team (XP practice): In order to be successful, all stakeholder involved must work together to achieve the same goal and outcome. The whole team could include, the customer (end user), developers, partners, the team within the organisation such as maintenance team and testing team. The system or product needs to be developed together with the stakeholders from start to finish, not just handing the system over once a task has been completed, I.e. system developed and will be handed over to the maintenance team. All stakeholders involved must understand how the system works, sharing knowledge with each other, so that a high-quality system will be delivered and for changes to be made by anyone (collective ownership).


‍‍‍‍‍‍Agile software development approach is more effective when managing customers and users because it highlights delivery is incremental; agile methods improves customer relationship (Cesch, M., et al, 2005). However, in a project there are other stakeholders who are equally as important as customers in a project such as, suppliers, competitors, government (legislations). Agile only focuses heavily on customer/user requirements, which is vulnerable to project failure, because even if the customer gets all their requirements fulfilled (Gilb, 2003), not maintaining other external stakeholders relationships can result in a loss or even failure of the project. Stakeholder management has it own set of principles/guidelines to manage stakeholder which compliments other agile principles, in which together enhance project development (Power, 2010). Please see external link. ‍‍‍‍‍‍

Links from this KA to other KAs

‍‍‍‍‍‍Stakeholder management also involves stakeholder requirements management, in terms of identifying relevant stakeholders that have an influence or impact on the project and understanding their needs in order to prioritise the stakeholders and their requirements. Rose 2005, weighted approach can be utilised to prioritise stakeholders and their requirements.‍‍‍‍‍‍ Continuos improvement also can help in stakeholder management. Feedback can also be used to get information from stakeholders, and also to meet their expected requirements,


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External links

‍‍‍‍‍‍http://www.sciencedirect.com/science/article/pii/S0263786310000256 ( About stakeholders definitions)

http://www.tandfonline.com/doi/abs/10.1080/0144619032000072137 (About stakeholders prioritizing)‍‍‍‍‍‍

http://systemagility.com/2010/10/27/principles-compared/ (Stakeholders' Principles and guidelines)

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