What Are Stakeholders in Project Management? A Comprehensive Guide

Learn how to identify stakeholders and maximize their input in project management.

Project management is a multitasking process that requires project managers to plan, organize, and control multiple resources for effective task execution and organization. A project manager must coordinate with internal and external stakeholders, manage dozens of resources, and ensure that all facets of a project are completed to meet the organizational stated goals. 

Getting project management right requires understanding how the project impacts each individual or team, including important stakeholders who may be involved in a project’s completion. These stakeholders can be internal (meaning working within your company) or external (impacted groups that operate outside of your business or organization). The involvement of stakeholders in project management can enable you to get an array of opinions, solicit feedback, and pull in knowledge from outside sources. 

As stakeholders play an important role in project management, it is crucial to understand "what are stakeholders?"

What is a stakeholder? 

Stakeholders are the individuals, groups, and organizations actively involved in a project related to a small business’s success. As noted by the Project Management Institute, project stakeholders usually include project managers, customers, employees, and project sponsors.^[1]

The number of stakeholders involved in a project can be huge, particularly if you're working on a project with the potential to affect multiple people. Understanding what your project stakeholders are will help you collect their input, engage them with your project, and seek their feedback about its progress.

Stakeholder vs. shareholder

Despite the significant differences between them, stakeholders and shareholders are often used as interchangeable terms. While a stakeholder can participate in the project planning and execution process and witness its outcomes, a shareholder stands to profit directly from the work of a business or organization. The shareholder category may include stock shareholders, employees, customers, vendors, or other groups, who may benefit from the business's projects. 

Under the basic idea of stakeholder theory, a business attempts to benefit anyone with a stake in its success.^[2] In shareholder theory, a business tries to maximize the financial success of its shareholders.^[3] This means that those with a direct financial stake in a business - including staff, owners, or shareholders - stand to benefit from the operations of a business. 

Each theory has implications for project management. While identifying shareholders is often a relatively simple process of checking out an organization's financial books, identifying stakeholders can be much more time consuming, requiring a deep understanding of the organization and its business operations and knowing who will benefit or experience loss from the work it does.

What are the different types of stakeholders in a project?

While you’re working on a project, it is crucial to identify the different types of stakeholders that may be involved in it. There are two types of stakeholders—internal and external.

Internal stakeholders

Internal stakeholders are the stakeholders within your organization, including team leaders or employees. They may have a direct financial or employment stake in the success of your organization's project management. They can also share opinions on a stakeholder's relevance to your project. Collecting transparent feedback from internal stakeholders is key to a business’s success.

External stakeholders

External stakeholders are stakeholders that don’t directly work with the business and exist outside of it but are still affected by its actions and outcomes. This can include community groups, customers, vendors, or other organizations. An external stakeholder’s needs may be quite different from another. They are valuable resources to ensure a fair market and monitor business operations externally.

How do you identify stakeholders in a project? 

Once you’ve understood the meaning of stakeholders and their different types, you should know how to identify project-specific stakeholders. Follow these steps to ensure correct stakeholder identification.

Survey the internal actors

Your internal stakeholders include anyone in your organization or business who may be impacted by a project. Besides including related employees, you should also include secondary order impacts, such as accounting or human resources, if their responsibilities will be impacted by the completion of a project. 

Surveying internal stakeholders will help you draw opinions about external stakeholders and understand their relevance and contribution to your project.

Check project-related data

Market data, surveys, or other financial information may yield critical insight into what stakeholders mean for your organization. Make sure to check the project-related market or financial data to get in-depth knowledge about your project’s impact.

Seek expert guidance

If you don’t have in-house expertise regarding project management, you can hire paid consultants or individuals to help you set your project for success. Their expertise can help you identify the right type of stakeholders for your project and assess the amount of engagement you should leverage from them to ensure a successful project.

How can you manage stakeholders in a project?

Due to the involvement of multiple stakeholders in a project, their interests may not always align. Hence, it is crucial to manage your stakeholders to avoid frequent conflicts.

Use project management software

The use of appropriate project management software is perhaps most critical to the management of stakeholders. Project management tools can track who works with which stakeholder, what your stakeholder expectations are, and track the progress of your contacts. 

Establish expectations

Setting expectations can help ensure your stakeholders understand your business goals and continue to operate within the planned framework. You can set up an internal process to share the expectations of each stakeholder. This will ensure the optimum utilization of your time and resources and align them with your overall project efforts.

Solicit feedback and ensure transparency

Stakeholder relationship-building works best when it is transparent and constructive. You should collect valuable feedback from your stakeholders but clarify that you might not always do what they request. By honestly specifying this, you will help stakeholders hold reasonable expectations about what you can and cannot do.

Tips for effective stakeholder management

Proper stakeholder management requires you to engage stakeholders while completing any project. Here are some tips to manage your stakeholders effectively.

Standardize data

Drawing stakeholder feedback via surveys allows you to get answers to the same questions across your entire stakeholder field. Collecting this data may help you yield fascinating insights, enabling resourceful comparison.

Build stakeholder trust

Stakeholder management is about building trust and letting stakeholders know you act in their best interests. According to Capterra’s Successful Change Management survey, 41% of respondents say their last major change project could have been more effective if they had more stakeholder trust.*

Make sure to remain transparent about your motives and maintain solid communications with your stakeholders at all times.

Ensure flexibility

Stakeholder management isn't about getting stakeholders to bend to your will. You can manage your stakeholders effectively by understanding their needs and figuring out ways to accommodate them whenever possible. 

While you ensure transparent communication, make sure to consider their perspective and act accordingly.

Getting ahead with project management

Identifying and collaborating with stakeholders is a crucial step to ensure successful project management. Setting clear expectations and goals and using the right software will influence stakeholders’ engagement. 

Finding the right stakeholders is often a matter of doing appropriate research, gathering data, and creating open lines of communication between the affected team members. Encouraging constructive feedback will help you complete your project according to stakeholders’ expectations.