Sponsorship is important during the selection process, but support becomes crucial once projects start up. Projects rarely finish without running into some kind of trouble, and you often need help digging them out. Alas, many people lend a hand only if there's something in it for them, which is why identifying the people who care about a project (the stakeholders) is so important.
Stakeholders can play a part in a project from proposal to the final closeout. During the planning phase, stakeholders help define the project and evaluate the project plan. A few lucky stakeholders cough up the money to fund the project. During the execution phase, stakeholders help resolve problems, make decisions about changes, risk strategies, and whether to fork over more money if necessary. At the end of a project, some of the stakeholders get to decree the project complete, so everyone can go on to another project.
Figure 1-4. XIRR includes a third argument called "guess," which is the first return you use in the search for the IRR. If you leave the guess argument blank, Excel uses 10%. Depending on whether the resulting NPV is positive or negative, the XIRR function tries a different value until NPV equals zero.
Commitment comes from all levels of an organization, from the executive-level project sponsor to the people who work on the project every day. Project stakeholders get their name because they have a stake in the outcome of the project. They either give something to your project, like the managers who provide the resources you use; or they want something from it, like the customer who implements the software system a project delivers.
Identifying stakeholders can be tough. Some don't realize they're stakeholders, like the development team that learns about a project when they receive the list of impossible requirements from sales. Other people pretend to be stakeholders, but aren't. For example, an engineering department gets chummy because they see your project as an inexpensive way to get their new database. If you're not careful, your project gains extraneous requirements, but of course, no additional money.
Project customers are easy to spot, because they're the ones with the checkbooks. Pleasing the stakeholders who fund your project is a matter of delivering the financial results they expect (Common Project Selection Criteria). Stay on top of financial performance (Is the Project Within Budget?) so you can explain financial shortfalls and your plan to get back on track. The people who control the pocketbook can be formidable allies if other groups are trying to expand the project.
Because customers foot the bill, they usually have a lot to say about the project objectives, requirements, and deliverables. Of course, the person who cuts the check isn't often the person who defines requirements, but they both represent the project's customer. For instance, if the project is a college search, your teenager may pick a university even if you pay the tuition and board. Customers also approve documents, intermediate results, and the final outcome. Approvals are much easier to come by if you work closely with customers during planning to identify objectives and what they consider success.
Project sponsors are the folks who want the project to succeed, and have the authority to make things happen, for example, the vice president of manufacturing who's backing an assembly line upgrade project. If you, as a project manager, don't have that kind of authority, you may depend on project sponsors to confer some of their authority to you. A project sponsor's role is to support the project manager and the project team to make the project a success. After guiding a project through the selection process, the project sponsor's next task is to sign and distribute a project charter (Documenting Project Stakeholders), which publicizes the new project and your authority as the project manager.
A project sponsor can help you prioritize objectives, tell you which performance measures are critical, and guide you through the rapids of organizational politics. The sponsor can also recommend ways to build commitment or fix problems. Sometimes, project sponsors are also project customers, whether for internal projects or for those that deliver products to external customers.
If your authority isn't enough or the project hits serious obstacles, the project sponsor can step in. While project sponsors want their projects to succeed, they expect you to manage the project. Dropping problems at their doorstep every few minutes won't win their hearts, but neither will hiding problems until it's too late. If you need help, don't be afraid to get your sponsor involved.
Functional managers (also called line managers) run areas like engineering, marketing, or IT. They have quotas and performance measures to meet in addition to supervising the resources in their departments. Project resources almost always come from these departments, so you have to learn to work with these colleagues.
The easiest way to win over functional managers is to let them do their jobs. Don't tell them who you need (unless you already have a great working relationship.) Instead, specify the skills you need and the constraints you face, like cost, availability, or experience. Then, after the managers provide you with resources, do your best to stick to the assignment dates you requested. When schedules slip, notify functional managers quickly so you can work out an alternative.
Team members who do project work are stakeholders, too, because they perform the tasks that make up the project. Other types of stakeholders often do double duty as team members, for example, when a customer defines requirements.
Keeping team members happy is a combination of reasonable workload, meaningful work, and a pleasant work environment. Communication is as important with team members as it is with every other type of stakeholder. Team members want to know how their tasks support the big picture, what their tasks represent, and when they're scheduled to perform them.
You already know that project managers are stakeholders, because your reputation and livelihood depend on the success of your projects. The project manager is easy to identify when it's you. How to make yourself happy is something you have to figure out for yourself.
The process of building a project plan (Project Planning in a Nutshell) helps you identify many project stakeholders. For instance, the purpose of the project and who benefits from it tell you who the customer is as well as the project sponsor. Project objectives help you identify which groups participate in achieving those objectives. The responsibility matrix (Who's Responsible for What) identifies the groups involved in a project and their level of involvement, so it acts as a checklist of stakeholder groups. Of course, you still must identify the specific people to work with within those groups. When you start to build your project team, the list of functional managers and team members falls into place.
As projects pick up momentum, your ability to remember details quickly falls away. Stakeholders are so important to projects, you can't afford to forget them. As you identify stakeholders during planning, create a stakeholder analysis table. Names and type of stakeholder aren't enough. Include information about the people's roles, which objectives matter to them the most, and whom they listen to.
Figure 1-5. When you use a table in a Word document, you can add a new row to the table by pressing Tab when you're done typing in the last cell of a row. To add an additional objective or contribution to a table cell, with the insertion point at the end of the cell text, press Enter.
Here's the information that's helpful to collect about each person who acts as a stakeholder:
Organization or department. Knowing where a stakeholder works helps you remember the objectives they care about, and whether they should participate in different activities. For instance, if your company wants to keep strategy sessions confidential, you don't want to invite external stakeholders to them.
Objectives. List the objectives that a stakeholder cares about—from their hottest button to coolest. If you need help rallying stakeholders around an objective, the Objectives column helps you find your allies.
Contributions. List what the stakeholder does for the project. Contributions in the stakeholders analysis table are different than the responsibilities in a responsibility matrix (Who's Responsible for What). In the stakeholder table, you specify the specific contributions that individuals make to the project in their roles as stakeholders.
Advisors. The people to whom stakeholders listen are great sources for tips on presenting information effectively, or which options a stakeholder might prefer.