Who is considered a stakeholder? AND WHY ARE THEY IMPORTANT?

In order to drive success for an organisation and a project outcome, it is vital that there is effective management of stakeholders. Anyone who directly (or indirectly) affects or is affected by the outcome of a project is considered to be a stakeholder (Fredman & Reed, 1983).

Stakeholder management exists as expectations arise from the perceived stake in the entity or task, which can often lead to behaviour, both constructive and destructive (Bourne & Walker, 2006; Sutterfield et al., 2006).

As there are a diverse range of stakeholders involved in any sort of project, there will be just as many needs and desires to be managed.


One large aspect of the project manager’s role is to take responsibility for stakeholder management. This is achieved by developing a high quality and effective relationship with the stakeholders (Maue & Pisarski, 2015; Daniel & Inim, 2020), addressing surfacing issues, managing any conflicting interests and promoting their commitment to the project (Riahi, 2017; Daniel & Inim, 2020). Additionally, the flow of information to stakeholders in an accurate and timely manner will enhance the overall efficiency of the project team (Rajhans, 2018).

Therefore, the strength of communication between the project manager, team and stakeholders is essential in achieving a successful project outcome. If stakeholder management is overlooked and not carefully planned out, this can lead to project failure, causing a detrimental monetary loss for businesses (Raiablue, 2014; Daniel & Inim, 2020).


1. Interpersonal & team skills 

A high quality and efficient level of communication cannot be achieved without the right set of soft skills that are key to managing a team of people. As stakeholders become increasingly knowledgeable in their needs and how to “assess the trade offs of their choices”, the ability to foreshadow people dynamics and enhance stakeholder interaction becomes a crucial skill to have (Renee et al., 2012).

Interpersonal skills include conflict resolution and negotiation, creative problem solving, strategic thinking, team building, influencing skills and many more (Renee et al., 2012).

Having a high level of interpersonal skills is beneficial in managing positive stakeholder relationships by developing a strong level of trust and long-term loyalty (Renee et al., 2012).

Whilst technical skills still remain important, what will really set you apart is the ability to be emotionally and socially balanced. More importantly, employers and stakeholders will value project managers who are capable of interacting with people from a diverse range of cultures, as workplaces and projects become more global (Dean & East, 2019; Denney et al., 2020).

2. Communication plan 

According to the Australian Institute of Project Management (AIPM), an estimated 90% of time is spent by project managers communicating with stakeholders. Therefore, a key skill required by project managers is to be able to carry out efficient and effective communication.

AIPM suggests that a communication plan is added to the overall PM plan, which outlines the types of communication needs (e.g. how and what information they need to be informed on and how often this will occur). By having a well defined communication strategy, this can improve project performance and client satisfaction (Rahjans, 2018).

Source: AIPM 

By having an outlined communication plan and a record of project updates, this allows for you to maintain transparency and signal to the stakeholders their valued involvement in the project. To further enhance productivity levels, make use of AI software that can relay updated information on a scheduled basis.

3. Involve & engage your stakeholders 

Being able to effectively engage stakeholders is a vital skill required to lead successful project outcomes. It also allows for teams to work with transparency to enhance their performance, and meet the needs and expectations of a wider scope of shareholders.

The idea of stakeholder engagement is to get people to “adopt new behaviors and to think and feel differently” (Janellis, 2021).

Strategies to engage stakeholders are outlined by consulting firm, Janellis, to guide a change in behavior. These include:

  • Engaging in progressive dialogue
  • Using visuals and storytelling approaches within the communication strategy
  • Communicating in a persuasive manner


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

PMCOE Articles

Sign up to receive our newsletters

And receive 30% discount on our courses

Related Content