Stakeholder Management 101 for Product Managers.
As a Product Manager, collaboration is the norm and isolation is usually a rarity. You might not be the person directly writing the code…
As a Product Manager, collaboration is the norm and isolation is usually a rarity. You might not be the person directly writing the code, designing the product or allocating resources towards the development. However, you are in charge of guiding/leading the parties that would, ensuring communication, collaboration and alignment for the growth and betterment of your product. A crucial concept that helps navigate this process is called Stakeholder Management.
In this article, we would look at what stakeholder management is, who stakeholders are, benefits, the process as well as best practices to keep in mind to help product managers navigate stakeholder relationships more effectively and achieve their goals.
To understand the concept of stakeholder management, it is important to know who a stakeholder is.
Who is a Stakeholder?
A Stakeholder is a person whose work is directly or indirectly impacted by the product you as a product manager are working on. A Stakeholder could also be someone who can influence the product decisions or has an interest in the product’s success. In essence, there needs to be a connection between the stakeholder and the product whether direct or indirect.
What is Stakeholder Management?
This is the process of identifying, engaging, and satisfying the various entities that can significantly impact a product’s success. It encompasses the processes and activities aimed at understanding, communicating with and aligning the interests of stakeholders throughout the product life cycle.
Benefits of Stakeholder Management
1. Building Strong relationships
A fundamental reason why stakeholder management is important is that it empowers product managers to build strong relationships with key individuals or groups capable of influencing the success of their product. This ensures that their priorities align, conflicts are minimized, and valuable feedback and insights are gotten. This empowers them to make informed decisions and adjustments, thereby increasing the likelihood of delivering a product that meets the needs and expectations of its target audience.
2. Securing buy-in and support
Stakeholder management also plays a pivotal role in securing buy-in and support for critical decisions. In a constantly evolving and complex business environment, where multiple stakeholders may hold differing opinions and interests, having consensus and support is key. By engaging stakeholders early on and involving them in the decision-making process, product managers can address concerns, preempt potential resistance and instill a sense of ownership and commitment among stakeholders.
3. Harnessing specialist expertise
Moreover, stakeholder management enables product managers to tap into the expertise and resources of their stakeholders, as each stakeholder brings a unique perspective and set of skills to the table. They can offer valuable insights, suggest improvements and even contribute to the development and testing of the product — resulting in a more robust and market-ready offering.
4. Mitigating risks and building trust
Stakeholder management aids in mitigating risks and anticipating potential challenges. By actively engaging with stakeholders, product managers can identify and address potential issues at the early stages. Similarly, by keeping stakeholders involved throughout the product development lifecycle, product managers can build trust and credibility, proving invaluable in times of crisis or when seeking support for future endeavours.
Processes involved in Stakeholder Management.
1. Stakeholder Identification
Stakeholder identification sets the stage by creating a comprehensive list of potential influencers and contributors. This initial step involves systematically recognizing individuals or groups with an interest in or influence over the product. By employing various tools such as Stakeholder mapping or surveys, this process establishes a foundation for understanding all the product’s stakeholders. The process begins by creating a comprehensive list of potential stakeholders, considering both internal and external entities with vested interest in the product’s success. Through thorough stakeholder identification, a product team can establish a solid understanding of the different stakeholders that need to be considered throughout the product lifecycle.
Stakeholders can differ depending on factors such as the product industry, company size, and available resources. However, in broad terms, your stakeholders typically include:
Customers: they are among the most significant stakeholders, given that all the efforts of a product manager are directed towards resolving customer problems and improving their lives.
Executives : This category encompasses high-ranking company officials such as the CEO, Vice President/Chairman, along with investors and board members.
Engineering, Design, and QA : These stakeholders are integral to the product development process, constituting the core group involved in shaping the product.
Marketing, Sales, Customer Support, and Operations: Depending on the circumstances, these individuals may either be customers of the product (as in the case of internal products) or have their work indirectly influenced by the product.
2. Stakeholder Analysis:
Stakeholder Analysis usually references the list from identification, and ensures a nuanced understanding of each stakeholder’s expectations, concerns, and influence levels. It delves deeper into the characteristics of each identified stakeholder, categorizing them based on their power, interest, and involvement. This refined understanding guides the subsequent phases of engagement and helps in prioritizing stakeholders and tailoring strategies to meet their specific needs.
Prioritising stakeholder needs
Prioritisation is a crucial part of Stakeholder Analysis. Given that a product manager navigates interactions with numerous stakeholders, treating stakeholders equally can result in chaos. The challenge lies in determining how to prioritize effectively.
There isn’t a universal solution to this, as organisational dynamics vary and each product manager adopts a unique approach to prioritisation. However, one straightforward method is using the Power/Interest Grid.
The Power/Interest Grid is a tool used to prioritize stakeholders based on their level of power and interest in a project or initiative. This matrix helps in identifying and focusing on key stakeholders who can significantly influence or be impacted by the product.
Here’s an explanation of every section.
High power, highly interested people (Manage Closely): you must fully engage these people, and make the greatest efforts to satisfy them.
High power, less interested people (Keep Satisfied): put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
Low power, highly interested people (Keep Informed): adequately inform these people, and talk to them to ensure that no major issues are arising. People in this category can often be very helpful with the details of your product.
Low power, less interested people (Monitor): again, monitor these people, but don’t bore them with excessive communication.
3. Stakeholder Engagement:
Stakeholder Engagement is the ongoing process of building and maintaining positive relationships with stakeholders throughout the project lifecycle. This active phase involves regular communication channels, feedback mechanisms, and conflict resolution strategies. By leveraging the refined understanding from the previous processes, stakeholder engagement aims to create an environment where stakeholders feel heard, valued and aligned with the product’s objectives.
Engaging with different types of Stakeholders
a. Customers
Actively engage with customers to understand their needs, preferences, and concerns. Regularly solicit feedback through surveys, focus groups or direct communication channels.
Maintain transparent and clear communication about product updates, changes and timelines. Address customer inquiries and concerns promptly, demonstrating a commitment to their satisfaction.
Address customer issues promptly and effectively. Establish clear channels for customer support and provide resources to resolve problems, reinforcing the value placed on customer satisfaction.
b. Executives:
Align product goals and outcomes with the strategic goals of the organisation. Clearly articulate how the product contributes to overall business success and growth.
Provide regular updates to executives on product’s progress, milestones, and potential challenges to manage their expectations.
Clearly outline the financial aspects of the product, including budgets, resource allocations, and potential returns on investment. Showing financial transparency improves trust and credibility with executives.
Anticipate potential challenges and present proactive strategies to address them, showcasing a proactive and strategic approach.
c. Engineering, Design, and QA:
Involve engineering, design, and QA teams in decision-making processes related to the product. Encourage collaboration to ensure that technical and design considerations align with the product’s goals.
Encourage continuous communication among cross-functional teams. Conduct regular meetings and communication channels to address technical requirements, design specifications, and quality assurance standards.
Acknowledge the contributions of the engineering, design, and QA teams. Recognize their efforts and skills to create a positive work environment that boots motivation and commitment.
d. Marketing, Sales, Customer Support, and Operations:
Facilitate collaboration among marketing, sales, customer support, and operations teams. Ensure that these departments have a shared understanding of the product and its positioning in the market.
Establish feedback loops between marketing, sales, customer support, and operations to share valuable insights. This allows for iterative improvements and adjustments based on real-world market and customer interactions.
Align key performance indicators (KPIs) across these departments with the overall product objectives. This ensures a joint effort in achieving common goals and promotes a unified approach to success.
Note — While these 3 processes often work seamlessly in a linear fashion, there can be instances of misalignment. Stakeholder engagement might reveal previously unidentified stakeholders or insights that necessitate revisiting the identification and analysis phases. The dynamic nature of stakeholder interactions may introduce new perspectives, prompting a re-evaluation of the initial understanding and potentially expanding the stakeholder roster.
Best Practices for Stakeholder Management
1. Focus on Key Stakeholders
Instead of spreading attention evenly across all involved parties, this practice emphasises directing efforts towards individuals or groups who significantly influence your product’s outcomes. By identifying and prioritising these key stakeholders, the decision-making process becomes more efficient, communication becomes clearer, and potential conflicts are minimised.
2. Early Engagement
The golden rule is to engage with stakeholders at the earliest opportunity, even before any formal business interactions. Initiate contact in a less formal setting — invite them for lunch, arrange a coffee meeting, or schedule a call to introduce yourself. The aim is to create and cultivate relationships, as a solid rapport ultimately builds trust. Networking skills prove invaluable. Uncomfortable with reaching out? Most of us share that sentiment. However, the effort invested now pays dividends later in your assignment.
3. Follow-Up
Merely asking someone for coffee doesn’t establish a strong and trustworthy relationship. After identifying key stakeholders, regular follow-ups are essential. Tailor interactions based on their roles — invite some to a design thinking workshop, while others may be needed for a roadmap discussion. All stakeholders should likely attend a sprint review. Develop a plan for consistent engagement, implement it and adapt as necessary.
4. Secure Stakeholder Alignment
Alignment is the crucial process of ensuring that all key stakeholders concerning the product are on the same page, working towards shared goals and objectives. Avoid surprises where key stakeholders express opposition to a product roadmap you’ve announced. Involve them in decision-making process.
The process of aligning stakeholders revolves around ensuring unanimous understanding and agreement on three critical aspects of the product:
The Vision: It is imperative that everyone shares a common North-Star, understanding precisely what the envisioned outcome of the product or feature is.
The Outputs: Agreement should be reached regarding the product’s intended functionalities and how it is expected to operate. This alignment ensures a unified understanding of the product’s core capabilities and functionalities.
The Outcomes: Stakeholders should be on the same page regarding how users are intended to perceive and interact with the product. This involves understanding the emotional impact on users and the product’s role in enhancing their daily lives.
5. Avoid “Yes Man” Syndrome
A crucial pitfall, particularly for new Product Managers is succumbing to every request. Learning to consider others’ opinions requires an in-depth understanding of the product, technology and users. Establishing your position within the company is essential. If you accept all stakeholder requests, you risk becoming a mere note-taker, jeopardising your team’s success.
6. Exemplify Leadership
Being a leader extends beyond guiding your product team — it includes leading stakeholders. Provide meaningful insights, be consistently prepared, actively and genuinely listen, and involve stakeholders in significant decisions. If necessary, don’t shy away from making final decisions. Recognize that pleasing everyone may not be feasible in many cases, and at times, tough choices are inevitable. Hold individuals accountable and assertively push when needed.
7. Utilise Data for Informed Decisions
The principle of “Always Bring The Data” is fundamental in effective stakeholder management. Relying solely on personal opinions lacks the robustness and credibility needed to influence decisions. When engaging with stakeholders, possessing data transforms you from just another individual with an opinion into a knowledgeable and informed communicator. The essence here is that data serves as a compelling tool to substantiate your points and make a persuasive impact.
In conclusion, building and maintaining positive stakeholder relationships is not a task to be checked off a list but an evolving process that requires continuous attention and dedication. By remaining attuned to the needs and perspectives of stakeholders, product managers can adapt, iterate and lead their teams towards successful product outcomes.