What Product Managers Need To Know For Successful Stakeholder Management

As a tech company in the logistics industry, we know that managing people involved in the product development process is no easy task. Leading without authority is a conventional way of working, which provides the freedom for team members to get on with tasks while ensuring that they’re actually getting them done. This skill is key for every product manager. However, to learn this skill, first you need to understand who the stakeholders are, how to manage them, what are the responsibilities of a product manager in the development process, and what are some common errors that take place in stakeholder management. Next, we will simplify this stakeholder management process so you can more easily understand it:

Who are stakeholders?

Stakeholders are the different people or parties that are involved and interested in the success of a project. Each party has different levels of power and interest. That’s why it’s important to question who has the power to make the project happen and who has interest. Some examples of stakeholders are:

1. CEOs or managers that provide the team with resources for product development.
2. Engineering and design teams that will be working on the project.
3. Last but not least, the most commonly overlooked group of stakeholders, external people like friends and family.

These stakeholders can be mapped out in a 4 by 4 matrix in which the axes are power and interest and, depending on where they land, you can determine the type of interaction and communication you must have with each one. Part of this exercise is acknowledging that with each stakeholder you must have a point of interaction or communication about the project.

What are the responsibilities of a product manager?

In the product development process, the main activities of a product manager are:

1. Define the problem, get different points of views on what the problem is, and define how success will be measured if that problem is resolved.
2. Make a list of potential solutions, choose the solution that has the most impact and that can be measured. In other words, define what the product proposal is that we believe will maximize that value, analyze it, and consider additional solutions or features that can be incorporated.
3. Be clear on project objectives.
4. Understand how each area contributes to achieve those goals.
5. Communicate priorities to the team.
6. Give clarity on the decision making process.
7. Create systems to receive, process, and implement feedback.

How to manage a stakeholder?

Stakeholder management is all about generating and managing the right expectations about what is being done and what’s next. To manage successfully, it’s necessary to have empathy and constant communication. On the one hand, empathy is about knowing and understanding the needs of the other person, their priorities, the common goals we share, and having clarity on differing points of views or objectives that may affect the project’s goals. On the other hand, constant communication is about keeping them informed on what is happening, and getting constant feedback if they have more power or interest in the project.

The key is prioritizing and focusing on the stakeholders that have a lot of power and interest, and talking to them about expectations and their responsibilities. For example, a CEO generally has a lot of power and interest, which means you must be in constant communication so that they are aware of the main problems, the context, and what is currently happening. You must also create systems to process feedback from stakeholders and clients so that teams can structure that feedback and implement it. With leaders from other areas that have less power but more interest, they need to be informed about the project and see how they perceive the project. Product development teams that have more interest but less power, they need to have a clear sense of direction and understand the motives behind their tasks to empower them to make decisions and adjust taking the objectives into account. Each team member needs to be clear on how the goals will be measured to know whether or not goals are being achieved. Finally, with external stakeholders, you need to communicate the context of the project, how you’re managing your time and your priorities.

Common mistakes in stakeholder management

There are frequent mistakes that happen during stakeholder management that we would like to help you avoid by offering you solutions. These are the following:

1. Believing that everyone needs to agree or  otherwise, the project can’t move forward. Among so many visions and points of view happening in one project alone, it 's challenging to reach common ground. It should never be the objective, and the most important part is being aligned with what needs to be achieved. The solution to this is empathy and negotiation. By aligning objectives and defining what's negotiable and what is not, you can find a starting point for the product development process, always prioritizing and thinking of the users. 
2. Lack of follow-up and constant communication. This can create friction that can destroy trust within product teams. That 's why you need to communicate how decisions are made. The benefit behind this communication is that team members can more easily identify new opportunities that can add value to the solution.
3. Being influenced by a stakeholder without questioning or understanding. To avoid falling into the trap of simply following the lead of a stronger voice, the first step you must take is to define the problem with every stakeholder, and later on decide what the right solution is. This separates the problem from the solution, and allows for a more objective standpoint when it comes to evaluating solutions after.
4. Getting frustrated when a stakeholder doesn’t understand. To maintain a good interaction with stakeholders, you need to understand the role and responsibilities of each one, and have empathy as if they were users. The most important thing a stakeholder needs to understand is how to work with the product team and how they make decisions.

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Once this process is applied from one project to another, it becomes a more agile and structured cycle. It’s necessary to remember that during this evolution, learning is key. If you would like to know more about stakeholder management and how to apply it, don’t miss this podcast with our Head of Product, Anaid Chacon!