Mastering Agile Business Management

Learn to how to blend Agile and traditional project management to

make Agile work for your business

Why Is Stakeholder Management Important?

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 Agile Stakeholder Management and Agile Contracts

© 2014-2020 High Impact Project Management, Inc. 2

Hi, with this lesson, we’re going to start a new section on Agile Stakeholder
Management and Agile Contracts.

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Why Does a Business Manager Need to Know
About Stakeholder Management?

Stakeholder management is one of the most critical success

factors in any project

In Agile it is a two-way partnership

It is critical to the success of an enterprise-level Agile

transformation

© 2014-2020 High Impact Project Management, Inc. 3

Before we get into the rest of the material on stakeholder management, you might be
wondering “Why Does a Business Executive Need to Know About Stakeholder Management?”
since this is a course for business executives. You might say – isn’t stakeholder management
something that project managers do?

That would be a very understandable question and this material was originally developed for
project managers but let me tell you why I believe it is equally important to business executives.

• Stakeholder management is one of the most critical success factors in the success of any
project – in today’s world, a project cannot be considered successful unless it meets
stakeholder expectations. Simply delivering some well-defined requirements within an
approved budget and schedule is no longer enough

• And, in Agile it is a two-way partnership. Both sides, (the business side and the project
management side) have to understand their roles and responsibilities for it to be successful.
Stakeholder management in Agile is not something that is done unilaterally by a project
manager

• Finally, in implementing a successful Agile transformation at an enterprise level, it is

particularly important to understand the roles and responsibilities that are needed to make it
successful

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 Why Is Stakeholder Management Important?

© 2014-2020 High Impact Project Management, Inc. 4

In this lesson, we’re going to talk about Agile Stakeholder Management. Stakeholder
Management is often taken for granted in an Agile environment but it is one of the most critical
functions of an Agile project manager and it is, without a doubt, one of the most important
factors in determining t he overall Agile Project Management approach

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Why Is Stakeholder Management Important?

A project is not successful unless it meets stakeholder’s expectations

Traditional plan-driven project sometimes assume that simply meeting the

defined requirements within the budgeted cost and schedule defines
success

Agile projects sometimes assume that the Product Owner totally

represents all stakeholder interests

© 2014-2020 High Impact Project Management, Inc. 5

First, let’s talk about why stakeholder management is so important. A very basic tenet of project
management is that “a project is not successful unless it meets stakeholder expectations”.
That’s sounds very self-evident but stakeholder management is often taken for granted and
doesn’t get the attention that it deserves.

• Traditional plan-driven projects often make the mistake of assuming that simply meeting the
defined requirements will be sufficient to make the project successful and that is often not
the case. It’s dangerous to assume that some simple requirements documents accurately
reflect the needs of all important stakeholders

• In an Agile project, you can’t assume that the Product Owner truly reflects the interests of all
potential stakeholders in the project. The role of the Product Owner is designed to make the
project execution more efficient by putting a representative of the business users directly in
contact with the project team but it is very dangerous to assume that eliminates the need to
talk directly to stakeholders outside of the project team. As an example there have been
many Agile projects that have gotten totally consumed with developing an important
application and completely neglected the need to engage others involved in the release
process to successfully release and support the application once it is complete.

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 Why Is Stakeholder Management Important?

Stakeholder management is one of the most important factors to

determine the project methodology

Effective
Project
Stakeholder
Efficiency
Management

Plan-driven Agile

© 2014-2020 High Impact Project Management, Inc. 6

When you’re trying to decide what type of methodology to use for a project, stakeholder
management is one of the most important factors to consider. In an Agile project, there is a
natural tendency to choose a project approach that is well-suited to maximize the efficiency of
the project but you might have to compromise that goal somewhat to come up with an approach
that keeps the stakeholders engaged and satisfied.

Many times there is a lot of internal focus on making the development process as efficient as
possible and that’s important, but it’s not enough. Having an efficient development process is
not sufficient, in itself, to create a successful project. For example, there was a very large Agile
implementation in the Boston area with a major financial services company. The teams were
up-and-running and thought they were doing Agile very effectively but the senior management
of the company was very dissatisfied because they felt they had lost touch with what was going
on in the projects.

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 Stakeholder management should not be
taken for granted - it requires planning

© 2014-2020 High Impact Project Management, Inc. 7

A key point is that stakeholder management should not be taken for granted. In large, complex
projects, a defined and planned approach is needed to manage stakeholder expectations and,
ideally, the stakeholders should buy into that approach and agree with it.

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Why Is Stakeholder Management Difficult?

Sometimes, you need to deliver bad news

Sometimes, you have to say “No”

Your stakeholders may change over time

Their expectations may also change

All stakeholders may not agree with each other

https://agilealliance.org/wp-content/uploads/2016/01/Stakeholder-Management-by-Drew-Jemilo-Agile2012.pdf

© 2014-2020 High Impact Project Management, Inc. 8

Stakeholder management can be a difficult thing to do for a number of reasons:

• Sometimes you need to deliver bad news that stakeholders weren’t expecting. Hopefully,
setting stakeholders expectations upfront, educating them that there is some level of
uncertainty in the project, and keeping them informed very openly and transparently will
help mitigate these surprises of bad news

• Sometimes you have to learn to say “No”. Stakeholders can be very demanding and even
unreasonable in their expectations. Keeping the most important stakeholders closely
engaged in the project so that they are aware of the real-world constraints and issues that
the project has to deal with should help them develop an understanding of why you
sometimes have to say “No”

• Finally, the stakeholders in a project may change over time and/or their expectations might
change as well and multiple stakeholders may not agree with each other

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Stakeholder Management Failures
US Financial Services Company

What Went Wrong Solution

The company’s senior executives saw the
Agile process as having significant benefits to
make IT development go faster; however,
they saw it as an IT development process It’s important to set everyone’s expectations
only and didn’t see the benefits of investing early on about the level of commitment
beyond that level required to make Agile successful to fully
realize the benefits
Impact: Partial implementation of Agile
that didn’t take full advantage of the
benefits it can provide
© 2014-2020 High Impact Project Management, Inc. 9

I want to quickly go through a few examples of stakeholder management failures

The first one was associated with a major US Financial Services Company

The company’s senior executives saw the Agile process as having significant benefits to make IT
development go faster; however, they saw it as an IT development process only and didn’t see
the benefits of investing beyond that level

As a result, the implementation of Agile was somewhat limited, superficial, and mechanical and
didn’t take full advantage of the benefits it can provide

In this kind of situation, it’s important to set everyone’s expectations early about the level of
commitment required to make Agile successful to fully realize the benefits. In this particular
situation, the senior executives saw Agile as a “silver bullet” and saw only the benefits without
fully realizing the level of commitment to make it work.

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Other Stakeholder Management Failures
Another US Financial Services Company

What Went Wrong Solution

The project teams were fully involved with

implementing Agile at the team level and
producing results but failed to keep senior
management informed of what they were It’s important to keep all levels of
doing management engaged and keep them
Impact: Senior management of the company informed
was disappointed in the Agile implementation
because they felt that they have lost touch with
what was going on in the projects
© 2014-2020 High Impact Project Management, Inc. 10

In another major US Financial Services Company

The project teams were fully involved with implementing Agile at the team level and producing
results but failed to keep senior management informed of what they were doing

The impact was that Senior management of the company was disappointed in the Agile
implementation because they felt that they have lost touch with what was going on in the
projects.
In this kind of situation, It’s important to keep all levels of management engaged and keep them
informed. You want your teams to be empowered and self-organizing but they shouldn’t
become so independent that outside management is left outside of the loop.

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Other Stakeholder Management Failures
Major Far-east Manufacturing Company

What Went Wrong Solution

The project teams failed to engage the

appropriate IT production staff in the
development of a major production In large enterprise-level projects, it is
application particularly important to keep people who
are outside of the project engaged in order to
Impact: When it came time to release the successfully release software
application to production, it could not be
released

© 2014-2020 High Impact Project Management, Inc. 11

The next one was associated with a major far-east manufacturing company:

The project teams failed to engage the appropriate IT production staff in the development of a
major production application

The impact was that when it came time to release the application to production, it could not be
released and the project was significantly delayed while the necessary coordination with the
release process was established.

In large enterprise-level projects, it is particularly important to keep people who are outside of
the project engaged in order to successfully release software. In this particular situation, if the
need for this coordination had been realized earlier, the delay in releasing the project to
production would not have been necessary.

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Common Stakeholder Management Mistakes

Identifying and • “If you misread the importance of a stakeholder to a project, then it
prioritizing the is impossible to objectively and accurately evaluate their opinions
wrong stakeholders on how a project should progress”

Being unrealistic
• “Project managers are notorious for overpromising on a project and
with your key under-delivering”
stakeholders

Failing to develop a
• “Take the time to break out what each stakeholder is interested in,
stakeholder and what challenges you face with them”
communication plan
https://blog.capterra.com/mistakes-all-project-managers-make-with-their-stakeholders/

© 2014-2020 High Impact Project Management, Inc. 12

This slide shows some common stakeholder management mistakes:

• Identifying and prioritizing the wrong stakeholders

• “If you misread the importance of a stakeholder to a project, then it is impossible to

objectively and accurately evaluate their opinions on how a project should progress”

• Being unrealistic with your key stakeholders

• “Project managers are notorious for overpromising on a project and under-

delivering”

• Failing to develop a stakeholder communication plan

• “Take the time to break out what each stakeholder is interested in, and what
challenges you face with them”

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 Stakeholder management is one of the
most important functions of a project
manager

© 2014-2020 High Impact Project Management, Inc. 13

The key point that should be apparent from this is that Stakeholder management is one of the
most important functions of a project manager. There have been many projects that might have
completed the deliverables on time and on budget but failed to engage the appropriate
stakeholders in the process to make sure that the project met their expectations.

It is also one of the most neglected and overlooked areas in a pure Agile project and one of the
more important reasons why a hybrid approach might be necessary. You just can’t optimize the
development process to be efficient and go fast without considering how the key stakeholders
will be kept engaged.

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 NEXT LECTURE…
WHAT'S DIFFERENT ABOUT AGILE
STAKEHOLDER MANAGEMENT?

© 2014-2020 High Impact Project Management, Inc. 14

In the next lecture, we’re going to discuss What's Different About Agile Stakeholder
Management?

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