We all know how important it is to get your stakeholder identification right. It is critical to the success of your project to understand who your stakeholders are, what their motivations are, and the impact they can have on the project. If you get the stakeholder analysis wrong your risk of missing deadlines, cost overruns, or even outright failure can increase significantly. Yikes!
In this post, we will review a way to increase the likelihood of understanding who and what your project stakeholders really are and determine what their impact on the project might be.
We will be exploring a method of stakeholder evaluation called the Salience Model. Unlike the more commonly used power based matrices models, the Salience Model employees three variables to determine if an entity is truly a stakeholder, and if so, precisely determines what their impact on the project might be.
Importance of Stakeholder Analysis
One of the first tasks in initiating a project is to identify who appears to be your project stakeholders. So, what defines a stakeholder? Briefly stated:
Stakeholders are the project team as well as internal and external entities that are affected (either positively or negatively) by the performance or the completion of the project.
Identifying who these entities are can be a difficult and is a continuous effort throughout the project. Some of this is done by reviewing the project charter, some by interviewing subject matter experts within the organizations, some by expert judgment or experience of the project staff, and other methods. We will not get into the initial identification of stakeholders too much in this post. Check back on PointProx.com for a post soon concerning this process.
If you follow PMI practices, you probably noticed that the importance of stakeholder management has increased with the release of the 5th Edition of the PMBOK Guide. The subject was raised to its own Knowledge Area from its previous role within Communications Management, where it used to be located. It is the opinion of Point Prox that the separation of stakeholder management from communications management is an important step that rectified a hole in PMI practices in the 4th Edition. Raising stakeholder management to its own knowledge area helps to reduce the risk and exposure to unanticipated stakeholder impact by providing guidance and defined processes throughout most the processes groups.
So, we have this list of potential stakeholders, what to do now? We’ll need to begin the process of determining which ones are true stakeholders, and of that group, which needs what attention. There are a number of ways to begin this process, and it is recommended to use more than one. However, we like to start off with a practice called Salience Model Analysis. This gives us a first cut at categorizing the list and understanding the potential impact these stakeholders will have on the project.
What Is the Salience Model?
The Oxford English Dictionary defines salience as:
Salience – “The quality of being particularly noticeable or important; prominence.” – Oxford English Dictionary
The Salience Model was first introduced in 1997 in “The Academy of Management Review” in an article titled “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts” by Ronald K. Mitchell, Bradley R. Agle, and Donna J. Wood. The article introduced a theory, based on a study of existing literature of stakeholder management at the time, that provided a finer evaluation analysis process then was generally available.
Mitchell, Agle, and Wood defined a way of evaluating stakeholders that used three variables, instead of the binary, primarily based on the evaluation of power, common in use. The variables were based on the evaluation of attributes of the of stake holding entities for the attributes:
- Power
- Legitimacy
- Urgency
To understand the Salience Model, it is first necessary to understand what these three variables mean.
Power: Getting it Done!
Basically stated, power is the prospect that an entity will be able to exert their own will despite the resistance of other entities. Note that this is not just the power that your boss has, but a broader definition that encapsulates the correlations both within and outside of formally defined business relationships. To understand this variable, it is important to understand the types of power that an entity can exert. These are:
- Coercive – Plainly stated, this is a physical power. It incorporates the use of violence, force, physical threat, damage of property, restraint, to name a few.
- Utilitarian – monetary or material items of value and the use thereof for control purposes.
- Normative –symbolic claims such as prestige, familial or community ties, reputation, social symbols, and material items that are representative of these types symbols.
Legitimacy: I Know it When I See it
The identification of an entity as a stakeholder is, in part, defined by the legitimacy of their relationship to the project. The trick is how do we define and determine the Legitimacy of stakeholders? There have been many attempts to express what the concept of legitimacy actually means. We’ll take a definition from the literature surrounding the subject as it is better than anything we could come up with
“Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” – Mark Suchman
Some examples to help clarify what a legitimate relationship to a project might be: moral conventions, legal rights, capital or work investment, social norms, exchange relationship (i.e. vendor customer), generally accepted sets of beliefs, legal statute, and etc.
Note that power and legitimacy are separate variables that are sometimes intermixed. The exercise of power can be legitimate or illegitimate and even if an entity has a legitimate relationship to a project they may not have the ability to exercise power over it.
Urgency: Speaking Fast with a Loud Voice
Urgency was added, as a third variable in the salience model to capture the dynamic element of the relation of a stakeholder to a project. Essentially, urgency is the character of how time sensitive, very important, or critical the impact of a project is to a stakeholder.
The urgency felt by a stakeholder, in a relationship to a project, is characterized by the degree which their claims call for immediate action. The immediacy can be caused by numerous reasons such as fear of loss of an asset or something of great value, potential existential threats caused by a project, threats to an entity’s sense of worth or respect, to name a few.
Next Time: Using the Salience Model
We continue this topic in Stakeholder Analysis and the Salience Model – Part 2: Using the Model . It explores the types of stakeholders, what they mean, and what this tells us about how they should be managed.
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