Two Steps toward Making Stakeholder Management Manageable

Two Steps toward Making Stakeholder Management Manageable

The materials I've found about Stakeholder Analysis have not explained much more than the PMBOK Guide explains. What grids other than the Power/Interest grid tell me remains a mystery.

However, I have found two hints that simplify the whole Stakeholder Identification (and Analysis) process.

Divide Stakeholder Analysis 

PMBOK 4 describes Stakeholder Analysis as a single Tool/Technique. I would split off the elicitation of information as a separate technique and call it Stakeholder Survey.

Use a form as you visit around the office eliciting detailed stakeholder information. Transfer that information to the Stakeholder Register at the end of the day. If you put the register on a server and can access it register through Wi-Fi, you can save on data entry time.

Fill in what you can before bothering stakeholders. Then verify that information and elicit the rest, as much as you can, face-to-face. For what remains, you can use a questionnaire.

Simplify through Progressive Elaboration 

Consider an analog in Risk Management: First, you use Qualitative Analysis to identify the key risks. Then you use Quantitative methods to analyze only the key risks.

Now, take these lessons from that model:

• You don't need to perform full analyses for all stakeholders.
• You need only a small subset of the information to start.
• Decide what information you need in order to identify Key Stakeholders.
• Use the Power/Interest grid to identify Key Stakeholders.
• Collect further information and perform further analysis only on the Key Stakeholders.

Increase the degree of Stakeholder Analysis through progressive elaboration.

1. First iteration: Key Stakeholders
2. High Power/Low Interest stakeholders
3. High Interest/Low Power stakeholders
4. Low Interest/Low Power stakeholders

Remember, subsequent iterations should require less information and analysis.

This may be as much a delaying tactic as a simplification, which is what I really wanted. However, reducing, breaking up, and delaying the work relieves some of the stress of a potentially overwhelming process.

3 Factors in Risk Management: Probability, Impact, and Velocity

Risk Score

Qualitative and Quantitative Analyses in Project Risk Management both take into account Probability (P) and Impact (I). A Risk Score is the product of the two.
Qualitative Analyses use subjective estimates of probability and impact as a screening process that categorizes risks for management, monitoring, or ignoring. Risks placed in the management category go on to Quantitative Analysis and Risk Response Planning.

What about Urgency?

A third value should be considered: Velocity (V), which is the inverse of the time-to-impact.
Seldom can we deal with all risks at once. The value of considering Velocity lies in prioritizing further effort so you have enough time to respond to urgent risks. We would not consider Velocity when assigning risks to the three categories because we want to deal with the important things, not the urgent things. (Consider Pareto's 80/20 rule.)
If Probability times Impact describes an area, then to be consistent, we would add Velocity as a third dimension. That is,
Priority Score = Priority x Impact x Velocity

Another View of the Priority Score

Priority times Impact has another label, which is Expected Monetary Value (EMV). EMV is often used by itself for guiding decisions. If we express the Priority Score as
Priority Score = EMV x Velocity
then we give EMV a weight equal to the weight of Velocity.
The reason we would not consider the Velocity by itself goes back to the principle about the cost of rework. The later you deal with a problem, the more it costs because you have to repeat and fix work that came before. The previous effort becomes wasted, costs rise, schedule lags, and you have to use extra resources to get back on schedule.
Similarly, the longer you wait to deal with a risk, the more rework you have to do. Therefore, we need to factor both Velocity and EMV into prioritizing work: Velocity to deal with urgent risks, and EMV to control costs.

A New Step: Priority Analysis (when needed)

I recommend inserting a new step into Risk Management when there are risks with high velocity and you have to prioritize which risks to deal with first:

1. Qualitative Analysis with Risk Score = estimated Priority x estimated Impact
2. Priority Analysis with Priority Score = EMV x Velocity = Priority x Impact x Velocity
3. Quantitative Analysis with Risk Score plus other factors such as Velocity and Cost Effectiveness

I bring up Cost Effectiveness because you want to ensure that you don't spend $150 to prevent a risk whose EMV is only $100.

Reference

Hall, Harry, PMP, PMI-RMP. 30 Quick Risk Evaluation Tips. PM South. http://www.pmsouth.com/2015/07/18/30-tips/. Accessed 21 July 2015.