Stakeholder management

Stakeholder management

Managing and informing everyone involved


Stakeholder management is the continuous, iterative process of identifying, analysing and engaging those with an interest in the project. It is integral to the design and delivery of all projects and many researchers have cited inadequate stakeholder management as a cause of project failures in other industries as well as construction.

Why is it important?

Successful stakeholder management will build and maintain support for a project provided that the outcomes are clearly explained to, and understood by, the stakeholders. In particular, it will help to eliminate late interventions by stakeholders which are frequently the cause of design changes and associated errors. Time invested in understanding stakeholder needs, as well as the client’s sign-off and approval process, is never wasted.

A good stakeholder management procedure is key to ensuring project objectives are achieved. In construction, the full benefits of stakeholder management have yet to be felt, simply because the industry’s processes struggle to address issues such as the impact of procurement, internal stakeholder collaboration, responsibility for stakeholder management and project life-cycle.

Even attempting to compile a simple list of construction project stakeholders is challenging, and attempts to do so have been criticised for producing lists which are either too short or too long.

Too long, and the process can become unnecessarily complicated and cumbersome. Too short, and stakeholders are missed out and may ‘appear’ late in the process with the potential to adversely affect design or construction. If anyone with an interest, real or perceived, is considered an important stakeholder then their involvement should be carefully reviewed and agreed.

What are the desired outcomes and how can you achieve them?

Identification of all internal and external stakeholders

In the early stages of a construction project, it is appropriate to start by considering internal and external stakeholders according to the established definitions.

  • Internal stakeholders are part of the client organisation or in legal contract with the client – potentially sub-divided by whether they are demand-side or supply-side. Examples include the client’s parent body (if the client is a subsidiary); tenants; members of the organisation’s board or department heads.
  • External stakeholders have a direct interest in the project though do not necessarily have a contract with the client, and they may be subdivided into public and private sector. These include planning authorities, neighbours, amenity societies and so on.

It is also important to identify all stakeholders in the client’s approval process so that someone who must sign off a particular project or element is not forgotten.

Analyse, map/group and prioritise stakeholders

Assess the ‘status’ of all stakeholders, their concerns, and the associated risks and mitigation actions which might be required. Highlight those stakeholders with less experience of construction projects who may need to be closely managed.

Tools such as a power/interest matrix or a responsibility matrix (RACI or its variants) may be useful. Understand the process used by each stakeholder to review and approve proposals, the level of detail each stakeholder requires, and the time it takes them to reach a decision.

It is particularly important to identify the accountable person who will make a final decision or grant approvals within each organisation.

Design and deliver an engagement plan

Communication and consultation plans informed by analysis, mapping/grouping and hierarchy of individuals or organisations should be produced. Templates and guides linking categories of stakeholders to a method of engagement should be considered, and a single point of contact for each stakeholder should be assigned.

Start early and revise regularly

The three steps set out above must be started early enough to ensure communication and consultation is conducted when it is most useful to decision makers. The stakeholder map must be revisited and updated periodically, both to respond to changes to a stakeholder’s role as a project proceeds, and to capture personnel changes.

Any external stakeholders with approval rights for specific issues – for example a local authority planning department – should be treated in the same way as internal stakeholders, to ensure appropriate consultation can be facilitated.

Establishing and agreeing a stakeholder management process

Illustrating and agreeing the process with the client should be mandatory at the beginning of a project to ensure that it can be clearly communicated to the whole project team and properly integrated: for example, collaborative planning should be considered. It is also essential to revisit the stakeholder management process as design and construction progress.

A universal process for all construction projects is hard to imagine; hence if a ‘standard’ process is proposed, it must be applied intelligently. For smaller, simpler projects a less formal, less rigorously documented stakeholder management process led by the design team is likely to be the norm.

In the case of large or complex projects, professional third-party managers or facilitators may be appointed to focus on stakeholder engagement.

The engagement plan needs to be clear on who manages which stakeholders. Too often there is an assumption that the contractor will manage them all when in fact the contractor may not have the authority or influence to do so.

Key goal

To identify, map and prioritise all internal and external stakeholders in a project, and to establish a process for effectively managing and communicating with them.

Practical steps

Practical stepPurposeFurther information
Identify all internal and external stakeholders relevant to the project.To eliminate the likelihood of other stakeholders ‘appearing’ later down the line.Brief
Analyse, group and prioritise stakeholders against appropriate criteria.Identify those who have the greatest influence on the project, and those who may need additional support.
Produce an engagement plan to facilitate communication and consultation.Assign a single point of contact for each stakeholder, and identify an appropriate method of communication.
Review the management process regularly and update as necessary.To reflect changes in personnel and changes in stakeholder input as the project progresses.
Identify the accountable person within each organisation who will make the final decision or grant approvals.To ensure sign-offs are made promptly and by all necessary stakeholders.Brief