Customer and Stakeholder Identification for Project Success
Find Everyone, or You're Headed for Trouble
A customer uses, or pays for, our project, and wants the results. A stakeholder is anyone affected by the project in any way at all. As project managers, we need to identify our customers & stakeholders. Missing a stakeholder is a recipe for disaster. In fact, we need to meet with every customer and stakeholder. But how do we find them all?
Find All Your Customers - It Sounds Easy, but . . .
When I teach project management, I tell the students in my classes - all professionals - that they need to find all the customers for their project. Most think that that is obvious and easy. Actually, though, it is not. Even for project managers working inside a company, it can be hard to find everyone who will be affected the new or improved product or service we will deliver at the end of a project. And if we are working as a contractor, sub-contractor, or consultant, it is even harder.
My 4,000 project management students have brought me dozens of project disaster stories arising from a failure to find and talk to all the customers and stakeholders for a project.
Read on to learn how to be sure to find everyone who you need to be talking to before you start your next project.
A Scary Story of a Missing Stakeholder
This story should make my point: A company was upgrading a CRM (Customer Relations Management) system. They were making no changes to the business process at all. It would use the same input screens and produce the same forms. They were simply moving it off an old mainframe and putting it onto a new network server. CRM supports sales, marketing, and customer service. The project manager worked with each department and made sure that each data entry screen, each form, and each report was just right. How could they possibly miss anything?
The new system ran side-by-side with the old system for three months with no problems. The company shut down the old system - and almost went out of business the next day.
The project manager had missed one crucial stakeholder: The Chief Financial Officer. The CRM system generated a daily sales report that varied from $500,000 to $1.5 million in cash each day. The CFO got his report off the old system. He didn't know the new system was coming in, or the old one was going away. And the day the old system went away, he had no idea how much money was in the company's merchant account!
Fortunately, the project manager was able to quicklly generate the new report and save the day. But we can do better: Let's find all the stakeholders at the beginning!
Defining Customer and Stakeholder
In project management, a customer is anyone who uses, pays for, or directly benefits from the result of a project. All customers are stakeholders; they are the central stakeholder. A stakeholder is anyone who is affected by the project process or results. Stakeholders who are not customers are less involved, so they are called peripheral stakeholders.
Like the CFO in our story, a stakeholder may be peripheral to the project, but he or she is still important to our success!
Find All Your Customers and Stakeholders
When we start a project, we think we know who to talk to. Often, we're wrong. Like detectives, we have to hunt down all the suspects - the usual suspects, and the unusual ones, as well. If we want a real picture of what is going on - and we do, as much as Sherlock Holmes - we need to interview everyone involved in the case.
We find customers and stakeholders differently in two different situation:
- Internal:. Our project is working all inside one company (our own company, or a single client company).
- External: Our project creates a product or service for many business customers (B-to-B) or consumers (B-to-C).
In addition, we may have to pay attention to people outside our usual idea of who the customer is, especially if we are working on a project that affects the environment or raises controversial issues.
Let's look at each of these in turn.
Each and Every Customer Matters
Finding Internal Customers and Stakeholders
If we are working inside a company, finding all customers and stakeholders is fairly easy once we know how to do it.
It's best to think visually. We draw a map of the project. If you know data flow diagramming, that's a great way to make an information map. Where does the information we need come from? Who knows it? Who will change it? Who will use it, or need to know it.
Once we have this picture, we show it to every customer and stakeholder we know about. And we ask, "Is there anyone else who should know about this? Who is responsible for each of these areas? Who will be affected by what the project is doing?" We can vary our language to meet the culture of the organization. In a bureaucracy, we might say, "Is there anyone who needs to approve these changes?" In a more informal setting, we can ask, "Who will be pissed off if I go ahead and do this, and they don't know it's happening?"
If our company is large enough to have an organization chart, we check our map against that. If it's not, we talk to everyone.
We get every name anyone suggests, and then we meet with each of these people, and ask if they are involved. If they are, they are stakeholders. Whether they are stakeholders or not, we ask them the same question: Is there anyone else who should know about this?
Be sure to include any auditing or regulatory agencies (internal or external) as stakeholders.
Be thorough. It is a lot better to have a lot of people say, "I have nothing to do with this. Why are you talking to me?" than it is to have one person say, late in the project, "Why didn't you come to me sooner!?!" In fact, people appreciate being asked if what you are doing matters to them. It shows you care. This will make stakeholder identification in future projects much easier.
Working through the organization, we build a list of customers and stakeholders. That's a crucial step in building a project communications plan, as well as an essential step of project scope definition.
In Six Sigma Project Management, this is called including the Voice of the Customer. Projects using Agile Project Management take this to the next level; they have continuous interaction with the customer throughout the project.
Defining External Customers and Stakeholders
External customers, whether businesses or consumers, are defined as the target market, and the best ways to define a target market and the wants and needs of a target market do not come from project management. They are part of the field of marketing. You can learn more by reading Marketing for the Solopreneur One Person Business. The logic is the same: Who buys, benefits from, or is affected by the results of this project, the product or service we are creating or improving? But the universe of possible customers and stakeholders is much bigger and more diverse, so different methods are needed.
In marketing, we probably can't talk directly to our customers. But we can do research about them. And we may be able to interview them, or do surveys, or create focus groups. The more we know about what our customers want, the more likely we are to really succeed in the launch of a new or improved product or service.
Paying Attention to the Whole World
Project management has its green side. The PMI Code of Conduct calls all project managers to ensure that each project is beneficial to everyone involved, to society, and to the environment.
Some projects create have significant environmental impact. In the 1990s, the construction of cellular telephone towers was a controversial issue. Ironically, everyone wanted good cellular coverage, but the attitude towards towers was "not in my back yard (NIMBY)." I worked with one cellular project manager who made a real difference. After a bad experience in a town with a historic Civil War battlefield in West Virginia, he learned to go well beyond the standard notifications in local newspapers and town meetings. He would visit all environmental groups, historical groups, and business owners in an area and get their opinion and input - and talk to them about who else he should talk to. As a result, his later projects were widely accepted, so it was easy to implement them on time and within budget. He turned the biggest roadblock - mixed public opinion - into an asset.
As cellular became accepted, opinions changed. At first, national parks wanted no towers in the parks. But when the realized that good cellular coverage meant that lost hikers could call for help, they changed their tune - with the help of a Presidential directive on the subject.
Unfortunately, all this wisdom did not transfer from one industry to another. In my opinion, the windmill farms harvesting energy from the sky across West Texas are beautiful additions to the landscape that show our dedication to preserving the environment. But, in many state, including New York, conservationists were not included in the dialog, and once again NIMBY took over, delaying great projects for years. If the managers of windmill projects had learned from the best practices of cell tower projects, we'd be much further along with wind-generated power than we now are.
Have any of these ever happened to you?
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Now That You've Found Your Customers, Talk to Them
Finding our customers and stakeholders is only the first step. Once we know who they are, we need to figure out what they want. And that isn't so easy - because, usually, they don't know themselves! To learn how to listen to your customers, please read Requirements Elicitation for Project Success.
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