The Stakeholder Perspective The Stakeholder Perspective Relationship Management to Increase Value and Success Rates of Projects By Massimo Pirozzi CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2020 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed on acid-free paper International Standard Book Number-13: 978-0-367-18476-6 (Hardback) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com Contents Foreword .............................................................................vii Preface ..................................................................................xi Acknowledgments .............................................................xv About the Author .............................................................xvii PaRT I THE STaKEHOLDER PERSPECTIVE 1 Stakeholders, Who Are They? ..................................3 2 The Recent Central Role of Stakeholders in Project Management ..........................................19 3 Stakeholder Identification: Integrating Multiple Classification and Behavioral Models .................................................31 4 Effective Stakeholder Analysis: A Systemic Approach .............................................45 5 Key Stakeholders Management: Principles of Effective Direct Communication ........................53 6 Stakeholder Network Management: Informative and Interactive Communication .........73 7 Basic Personal and Interpersonal Skills: Personal Mastery, Leadership, Teaming ................85 8 Ethics in Stakeholder Relations .............................97 v vi ◾ Contents PaRT II THE RELaTIONSHIP MaNaGEMENT PROJECT 9 Stakeholder Relations and Delivered Value: An Indissoluble Link ...........................................105 10 Satisfying Stakeholder Requirements and Expectations: The Critical Success Factor............113 11 Facing Successfully Different Levels of Project Complexity ..........................................119 12 Targeting Both Project and Business Value Generation by Using KPIs ...................................129 13 Relationship Management Project: A Structured Path to Effectiveness ......................139 14 New Stakeholder-Centered Trends: Project Management X.0 ......................................147 References ..................................................................153 Index ..........................................................................159 Foreword Stakeholders, those who influence or care about something, is such a simple concept. Yet it has taken nearly 50 years for those involved with planning and managing projects to fully understand the importance of stakeholders to project management. In recent years, stakeholder management has been added to project management standards, guides, and best practices. The topic has grown to include a wide range of stakeholder engagement-related activities and processes; it is the subject of numerous books, articles, reports, and studies. Stakeholder engagement, or stakeholder management, is included in most project management plans, systems, and approaches today. However, I don’t think its importance is yet fully appreciated. Project stakeholders include the individuals and organiza- tions that plan, finance, implement, oversee, and complete every project. They include shareholders, customers, users, and anyone who benefits from a project. And they often include those affected by a project, including neighbors, government regulators, and many citizens. In my opinion, stakeholder attitudes, expectations, and perceptions may be the most important aspect of managing any project, more important than scope, schedule, cost, or anything else. Of course, all the standard elements of project management are important, but without the satisfaction of key stakeholders, a project cannot be successful. vii viii ◾ Foreword Perhaps the best-known example of this was the project to build the Sydney Opera House in Australia. The project far exceeded original scope, cost and time estimates; it was a failure by nearly all established measures. Yet it became one of the most iconic and popular buildings in the world. The com- pleted project was loved by its most important stakeholders— the people who saw and visited it. Not only was it a unique and beautiful building, but it also helped attract millions of visitors to Sydney who have contributed hundreds of millions of dollars to the local economy. It was a fantastic success for one main reason—stakeholders! Like many other simple concepts, however, effective project stakeholder engagement is not so easy. Organizing and working with other human beings can always be a challenge. Dealing with many different groups of people can be compli- cated and difficult. In fact, large and diverse sets of stakehold- ers are now widely recognized as a major element of project complexity. It is sometimes difficult to even identify all project stakeholders, let alone understand their attitudes, expectations, and perceptions. In fact, some stakeholders might not know how they feel about a project, which can be both a challenge and an opportunity for project managers. Some may not even know they are project stakeholders; when that awareness comes, however, some can become very important stake- holders indeed—for example, those who may be negatively affected by the project or the product of the project. Project managers (and project sponsors) ignore those stakeholders at their own peril. Stakeholder engagement is a critical success factor for every project. Stakeholder identification, analysis, engage- ment, communications, and relationship management should be a major aspect of managing every project. Of course, these issues also apply to program and project portfolio manage- ment. It is not necessarily easy, but it is not mysterious either. It is just very important! Foreword ◾ ix This book is an evidence about Massimo Pirozzi’s under- standing of the importance of stakeholders to project suc- cess. It also goes beyond other books on this topic in several significant areas. Stakeholder networks are introduced, the use of interpersonal skills in interacting with stakeholders is explained, and the important topics of ethics and value cre- ation in stakeholder relations are emphasized. The relationship of stakeholders and project complexity is discussed at length and a process for successful stakeholder engagement to over- come that complexity is provided. In our rapidly changing and increasingly complex world, the probability of project success can be dramatically increased with the use of the concepts contained in this book. Massimo has demonstrated his commitment to stakeholders throughout his career, and in his professional leadership and recent writings. Now he is sharing more of his understanding and knowledge with the rest of us. I am honored to author this foreword. I feel even more honored due to the importance of this topic. Please read this book. It’s great! Then put it to good use. David L. Pells Editor/Publisher PM World Journal, PM World Library PMI Fellow, Honorary Fellow of ISIPM (Italy), APM (UK), PMA (India), SOVNET (Russia) Addison, Texas, USA