Stakeholder Analysis is key for project success!!

October 30, 2010

The September edition of All PM Today, the IIL Newsletter (see: www.allpm.com) in its monthly poll posed the question “Stakeholder analysis is a key factor for project success?” The answer was an overwhelming ‘yes’. The results published today (October edition) are:

Stakeholder analysis is a key factor for project success
a) For all projects regardless of size – 95.41 %
b) Only for mission critical projects – 0 %
c) Only for projects that are politically sensitive – 3.67 %
d) Stakeholder analysis is minimally important – 0.92 %

Compared to the level of interest a year or so back, we are seeing similar trends in enquiries about the Stakeholder Circle® – maybe at last the vast majority of PMs are recognising that project success is directly associated with fulfilling stakeholder expectations. The 1% who voted ‘no’ may find my paper Avoiding the successful failure! helpful.


Agreeing Your Program Objectives

October 8, 2010

Project objectives can extend significantly beyond the project deliverable to include elements of ‘how’ the program is undertaken. Our White Paper WP1042 – Project Terminology discusses the interaction between Goals, Objectives and Benefits, this post is focused on making sure your stakeholders buy into and understand all of the project’s objectives.

The Global Financial Crisis struck in 2008 and the Australian Government responded with short, medium and long term stimuli. Short term was a series of cash payment to the population (tax rebates) to encourage spending. Medium term was a series of measures focused on stimulating the construction industry. Long term there are major infrastructure projects in the pipeline. All of the stimuli were aimed at maintaining employment and household spending to keep the economy running – around 50% of the economy is based on household spending.

Economists will debate and historians will decide if the stimuli were the primary cause of Australia coming through the GFC in better shape than any other advanced economy but for the purpose of this post, I will assume the intent and the effect were aligned. Certainly at under 5% Australia’s unemployment levels are more than 10% lower than places like the USA and UK.

The stimulus package I want to focus on was a program to build 1000s of school halls, classrooms and libraries throughout Australia labelled the ‘Building Education Revolution’ (BER).

The facts of the program are that literally 1000s of projects were commissioned and built in little over 18 months, millions of man hours of work were created, the construction industry kept working and its supply chain kept supplying. AU$16.2 billion has been pumped into the economy and there are improved school facilities as a result.

What is now emerging is a debate over the value of the projects measured in terms of net costs. The costs of building normally, taking the usual time to commission and build the facility, and drip feeding work into the industry are being compared to the significantly higher costs associated with the high pressure ‘quick build’ approach taken by the government.

It is hardly surprising the costs are higher, as the adage goes, I can be quick, cheap or good – pick any two. The Government chose quick and good and accepted higher costs and the risks of poor performance to focus on ‘quick’.

What has been largely missing from the discussion has been a focus on the program’s objectives. The deliverables are classrooms, libraries and halls and one objective of the program was undoubtedly to deliver good quality buildings, but was this the primary objective?

I would suggest the key objective was to do the bulk of the work in 2009 and 2010 so the money went into circulation during the inevitable recession the construction industry would have faced as a consequence of the GFC. This objective and its associated benefits have been largely ignored by the Government in its communications with stakeholders (the electorate) and undoubtedly contributed to the last election result.

The benefits of pumping $billions into the construction industry include:

  • Lower unemployment with the associated savings in unemployment payments and other social costs.
  • Higher personal tax receipts from the employed workers.
  • Higher company profits and the associated tax receipts to the government
  • Fewer bankruptcies and the associated flow on effects.

Were the benefits worth the cost? I have no idea; only history will really decide the answer to this question.

Did the Government effectively communicate the BER program’s objectives to its key stakeholders? Definitely not and they paid the consequence. Everyone is still focused on the tangible deliverables; almost no one is talking about the other objectives and benefits of the program.

Why write this post? Almost all project and program managers, sponsors and clients focus on the deliverables and fail to understand, communicate and/or explain the other objectives they are working to achieve. If time is taken to ensure key stakeholders understand all of the objectives and benefits the project or program is focused on you may find you get a lot more support and assistance. In most projects, delivering the deliverables is only one objective out of many.