in projects and in project management
Stakeholder Perspective and Effective Relationship Management
A series of stakeholder-centered short guidance articles for increasing delivered value and the success rate of projects
SERIES ARTICLE
By Massimo Pirozzi
Rome, Italy
Stakeholders, who are they? The concept of stakeholders naturally corresponds to people and/or to people groups, and it definitively refers to the domain of human behaviors, but it addresses specific keywords, and, in case of project stakeholders, it has some specific attributes too.
Indeed, stakeholders, in their three hundred years of history – the word stakeholder dates back to the beginning of the eighteenth century, in England, and it meant the person who was entrusted with the stakes of bettors, i.e. a “holder of interests” – and especially in the last sixty years, progressively incorporated several key – and intense – concepts as interest, participation, support, influence, risk, responsibility, and value, and these concepts are common to all stakeholders that belong to organizational domains that may be very diverse.
Project stakeholders, in addition, focus on two specific basic attributes, which are unicity and centrality. In fact, on one side, every project is unique, and its unicity is reflected not only in its scope, goals, objectives, deliverables, time, cost, resources, and so on, but also in its own set of stakeholders, which, then, characterizes specifically each project both with respect to others, and in terms of its inherent complexity too.
In addition, since each project is made by people to be delivered to other people, stakeholders are evidently central with respect to all projects. Indeed, stakeholders, including the project manager and the project team, are the doers of the project, as well as other stakeholders, including customers/users, and shareholders/investors/funders, who would like to beneficiate of project results, are the target groups of the project itself. Definitively, stakeholders contribute to project definition, implementation, and success, starting from strategies and arriving to generate benefits through their actual delivered value.
Stakeholder centrality is a concept that relates to both operations and strategy domains. In fact, organizations define their strategies, which are based on their own mission and vision, and projects are their operational means to accomplish strategic goals, then achieving, through their results, the expected benefits; the overall value that is generated by each project determines the stakeholder satisfaction, and the relevant project success rate, within the whole investment lifecycle (see Fig. 1). It is, indeed, a fact, that each project exists to implement an investment, which, on turn, has been mutually agreed to harmonize different stakeholder expectations; organizations define strategies, which are based on their own mission and vision, then select pursuable opportunities in accordance with their defined strategy, then set business cases up, and, finally, start projects up. The inputs of a project generally include, then, business case, contract, and Statement of Work, or equivalent documents and/or agreements: of course, there are different business cases or similar for different stakeholders, as, for instance, providers, investors, and customers are, and this leads to the existence of different perspectives, in terms of results to be achieved, that will accompany the project in all its life cycle, and also afterwards, i.e. in released product/ infrastructure/ service lifecycle.
Fig.1 – The Project Investment Value Chain
A crucial issue comes out: objective “project requirements” in fact do not exist – even though it would be easier to deal with them –, while, in each project, there are “stakeholder requirements” characterized by an intrinsic subjectivity, which is due to both the facts that they are originated by stakeholders, i.e. people, and that they are the result of a mediation among diverse stakeholder expectations.
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Editor’s note: This series of articles is by Massimo Pirozzi are based on the Author’s Book “The Stakeholder Perspective: Relationship Management to Increase Value and Success Rates of Projects”, CRC Press, Taylor and Francis Group, Boca Raton (FL), U.S.A., October 2019.
How to cite this paper: Pirozzi, M. (2020). Stakeholder Perspective and Effective Relationship Management: a series of stakeholder-centered short guidance articles for increasing delivered value and success rate of projects, The central role of stakeholders in projects and in project management, PM World Journal, Vol. IX, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2020/07/pmwj95-Jul2020-Pirozzi-the-central-role-of-stakeholders-in-projects-series-article-3.pdf
About the Author
Massimo Pirozzi
Rome, Italy
Massimo Pirozzi, MSc cum laude, Electronic Engineering, University of Rome “La Sapienza”, Principal Consultant, Project Manager, and Educator. He is a Member and the Secretary of the Executive Board, a Member of the Scientific Committee, and an Accredited Master Teacher, of the Istituto Italiano di Project Management (Italian Institute of Project Management). He is certified as a Professional Project Manager, as an Information Security Management Systems Lead Auditor, and as an International Mediator. He is a Researcher, a Lecturer, and an Author about Stakeholder Management, Relationship Management, and Complex Projects Management, and his papers have been published in U.S.A., in Italy, and in Russia; in particular, he is the Author of the Book “The Stakeholder Perspective: Relationship Management to enhance Project value and Success”, CRC Press, Taylor & Francis Group, October 2019. He has a wide experience in managing large and complex projects in national and international contexts, and in managing relations with public and private organizations, including multinational companies, small and medium-sized enterprises, research institutes, and non-profit organizations. He worked successfully in several sectors, including Defense, Security, Health, Education, Cultural Heritage, Transport, Gaming, Services to Citizens, Consulting, and Web. He was also, for many years, a Top Manager in ICT Industry, and an Adjunct Professor in Organizational Psychology. He is registered as an Expert both of the European Commission, and of Italian Public Administrations.
Massimo Pirozzi serves as an International Correspondent in Italy for the PM World Journal. He received two 2019 PM World Journal Editor’s Choice Awards for his featured paper “Stakeholders, Who Are They?”, and for his report from Italy titled “PM Expo® and PM Maturity Model ISIPM-Prado®”. He received also the 2018 PM World Journal Editor’s Choice Award for his featured paper “The Stakeholder Management Perspective to Increase the Success Rate of Complex Projects”.
Massimo can be contacted at max.pirozzi@gmail.com
To view other works by Massimo Pirozzi, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/massimo-pirozzi/
