Project Management

BSB20315-7

Lecture 4
Stakeholders, Strategy &
Success
 Learning Outcomes

• Stakeholders: success and failure

• Managing strategic choices
• Benefits analysis, value and justification

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 Stakeholders, Strategy & Success
- An Introduction
• Project managers must achieve success in multiple
areas:
– Political, environmental, economic and social
objectives
– In the short, medium and long term
– To the satisfaction of all concerned
• But how close to perfection can project managers get?
• This chapter examines
- How and whether stakeholders can be managed
- Approaches to managing stakeholders
- Finding projects on a good business case
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 Stakeholders: success and failure
• Achieving total success comes with a challenge
– Complexity of objectives
– Requirements of different groups of stakeholders
– Timing
• A project delivers value Is it possible to
(rather than a product) satisfy all
stakeholders all of
– A value-maximisation view the time?
– Delivering business benefit
• Begin with the end in mind
– Mapping the stakeholders and their requirements sets this
‘end’
– Focuses the project definition and management of quality
– Helps prevent project failure
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 Stakeholders: success and failure
(Continued)

Most often cited causes of failure:

• Lack of user involvement
• Lack of management support
• Unrealistic user expectations
• Failing to recognise the real requirements of a
key customer group
• Failing to gain a shared understanding of the
outcome
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 Stakeholders, Requirements &
Measures

Table 4.1 Stakeholders, requirements and measures

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 Stakeholders:
Stakeholder Landscape
Stakeholders
• A party with an interest in the project process or outcome
• More than one person or one group is likely
• Resolving divergent and conflicting requirements is the
challenge

• Stakeholder landscape
– Who are they?
• Internal and external to the project
– What do they want?
• Inputs, process, outcome
– What influence is this going to have on the project
process or outcome?
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 Stakeholder Groups

Figure 4.1 Stakeholder groups

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 Stakeholders: Who are they?
Who are they?
• Who might be effected positively or negatively by the
development concern to be addressed?
• Who are the voiceless for whom special efforts may have to be
made?
• Who are the representatives of those likely to be effected?
• Who is responsible for what is intended?
• Who is likely to mobilise for or against what is intended?
• Who can make what is intended more effective through their
participation or less effective through non-participation or
outright opposition?
• Who can contribute to financial and technical resources?
• Whose behaviour has to change for the effort to succeed?
From The World Bank (1996) in the
context of development projects
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 Stakeholders: What do they want?

What do they want?

• ‘This product needs to be developed in the shortest possible
time’
– Marketing manager
• ‘I want a good working solution to the problem, not promises
that it will work on day one’
– Client
• ‘I want this project to be seen as a success in years to come’
– Project manager
• ‘I am prepared to make a certain level of investment, but
when that is spent and there is no more, we cancel the
project’
– Project sponsor
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 Input, Process & Outcome
Requirements
(Stakeholders: success and failure) (Continued)

Table 4.2 Input, process and outcome requirements

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 New Product Development Metrics
(Stakeholders: success and failure) (Continued)

Measures
• Time, cost and quality (project efficiency)
• Achievement of purpose, provision of satisfactory benefit,
met the pre-stated objectives (project success)

Table 4.3 New product development (NPD) metrics

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 Conventional vs Participatory
Project Monitoring & Evaluation
(Stakeholders: success and failure) (Continued)
• Beyond the conventional approach

Table 4.4 Conventional versus participatory project monitoring and evaluation

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 Timing
(Stakeholders: success and failure) (Continued)
Timing
• When do we determine whether a project is a success?
• Critical issues
– The timing of the assessment
– The perspective of the assessor
• One measure at one point in time will not capture the
performance of the project
– Control during the work Eg.
– Post completion reviews •IK Brunel
– Opinions in the future • Apollo missions
• Concorde
– Report performance to date
• Channel tunnel
– Guide objectives for the future
• Sometimes it takes longer than expected for success to be
achieved
– ‘Things that change the world usually take longer (and cost
more) than we think’
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 Managing Stakeholders

• Power or influence
– Direct or indirect authority
– Relationship with project team

• Interest or impact
– How much is known
– How much will the process or outcome effect

• Potential for co-operation

– Aid and abet

• Potential threat
– Opposition

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 Power: Interest Stakeholder Map
(Managing Stakeholders)(Continued)

Figure 4.3 Power: interest stakeholder map

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 Managing strategic choices

• Cost, time and quality

• Simplest way to consider project’s objectives

• But which are the most important?

• Need to ‘trade-off’
• Allows the prioritisation of the objectives
• Effects decisions during planning
More time may
• Effects decisions during execution mean a better result
More time is likely
to cost more
• The iron triangle
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 Trade-offs in Project Management
(Managing strategic choices)(Continued)

Figure 4.4 Trade-offs in project management

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 Managing strategic choices (Continued)

Figure 4.5 Time priority project Figure 4.6 Quality priority project

Figure 4.7 Cost priority project Figure 4.8 Time AND quality priority
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 Managing strategic choices (Continued)

• Conformance to objectives – reliability

• Can the project be delivered on time?
• Can the project finish within budget?
• Will the project meet the specified level of quality?

• Performance – excellence
• What is the shortest possible project duration?
• What is the lowest cost?
• What is the highest level of quality that can be
achieved?

• Mechanisms to assure conformance are different from

those that ensure performance.
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 What Lies Beyond TCQ?
(Managing strategic choices) (Continued)

What lies beyond TCQ?

• Most projects have diverse stakeholders with diverse
requirements at various stages during and beyond the
project lifecycle
– Time, cost and quality are incomplete statement of
requirements
– Cannot assume that these objectives are fixed or known in
advance or can be reduced to just three measures
• Customers do not always know what they want or are able
to communicate this at the outset of a project
• Customer requirements may change as the project
progresses
– The ability to address change is expressed as flexibility
– Flexibility costs and needs to be accounted for (built into
estimates) at the outset
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 Project Performance Mapping
(Managing strategic choices) (Continued)

Project performance mapping

• The most important TCQ objective will be determined
by the organisation’s strategy.
• If the strategy is to be the fastest
– time is the performance objective
– cost and quality are conformance objectives
• As a minimum we must hit the conformance
objectives
• Whilst focusing on improving the performance
objective

Additional conformance objectives may be

• Environmental, ethical, legal, health and safety
(see also Chapter 2)
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 Benefits analysis, value and
justification
A project should fundamentally yield value (real or perceived)
• Return on investment approach
• The balanced scorecard approach
• Links the benefits for
– Shareholders
– Customers
– Internally, the business process
– Innovation and learning
• Generates the ‘value proposition’ which justifies time, energy &
resources
• Benefits mapping approach
– What is the business benefit required?
– How does this map to organisation objectives?
– Determine the changes and supporting actions required to yield
benefits
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Programme & Project Management
(Benefits analysis, value and justification) (Continued)

Figure 4.9 Benefits map for PPM capability improvement

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 From Intangible to Quantifiable
(Benefits analysis, value and justification) (Continued)

From intangible benefits to quantifiable benefits

How to deal with the quantification problem:

• Carry out a pilot study

– Determine on a small scale the costs and benefits of the
proposed project before lunching into the full-scale
project.
• Use benchmarking and reference sites
– Look at other organisations that have carried out similar
projects
– Look at costs incurred and benefits gained.
• Modelling
– Build a simulation of the proposed changes
– Use the data to provide costs and benefits
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 Summary
• Welcome to the inherent complexity of projects
– Determining the end point is a key role for project managers
– This will mean wrestling with often indeterminate and
conflicting
needs of different stakeholder groups
• In projects, science and art should be mutually reinforcing rather
than competing
– Science, the identification and provision of numbers to aid
decision making
– Art, the recognition that stakeholder landscapes are
people/social systems
• When working in social systems, the basic measure of time,
cost and quality are useful only to a point
– Key performance indicators (KPIs) should reflect the broader
requirement of the stakeholders over different time periods
– Mapping the requirements is an aid to understanding the
project and the requirements
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