Stakeholder Management: An Introduction and Beginner’s Guide For Product Managers
A product manager needs to talk to multiple stakeholders on any given day, so it’s essential that a product manager can articulate the thoughts to different kinds of stakeholders.
Every stakeholder is different in the way they think. A designer would think about a product in a very different way versus an engineer. A Vice President would think about it in a different way versus an operations lead. It’s critical for a product manager to master stakeholder management and articulate thoughts in ways that each stakeholder understands. Let’s take a look at what a stakeholder is, the different kinds of stakeholders, and how you can manage and provide stakeholders with value successfully.
What does the word “stakeholder” mean?
In order to understand stakeholder management, we first need to understand what a stakeholder means and how to define who is a stakeholder. A stakeholder, in general, is a person whose work is directly or indirectly impacted by the product you as a product manager are working on. A stakeholder could also be someone who can influence the product decisions or have an interest in the product’s success. Basically, there has to be some relation of the stakeholder with the product, directly or indirectly.
Who are the different stakeholders?
Considering the above definition, there are multiple stakeholders a product manager deals with on a day-to-day basis. Here’s a list of different stakeholders -
- Customers — They are probably the biggest stakeholder of all for obvious reasons. All the work that a product manager does is to solve a customer’s problem and make his/her life easy. Also, these are the ones who pay to use your product. This is why they are the first and the foremost on the list of stakeholders.
- Executives — These include the top executives of the company such as the CEO, Senior Vice President, etc., investors, and board members.
- Engineering, Design, and QA — These are the ones who are completely involved in the product development process and form the core group of stakeholders.
- Marketing, Sales, Customer Support, and Operations — These, in some cases, are also the customers of the product (example: internal products). While in other cases their work is indirectly impacted by the product.
Why is stakeholder management important?
You’d say: “because they hold the stakes, you dumb!” Well, that’s true. But allow me to expand with 2 things.
First, let me remind us of an important part of a product manager’s job:
A product manager does not always make decisions. The PM ensures the best decisions get made.
How are best decisions made? Not by the PM being the smartest, greatest, and with the strongest intuition. It’s by collecting and synthesizing inputs from those who know something (but not all) valuable to the product/business. Guess what, your stakeholders collectively know a lot of valuable things to help you make the best decisions for your product.
Second, because your stakeholders are directly impacted by the outcomes of your product, if your product fails, they fail. Likewise, when they fail, you fail. Guess whose fault to blame? (HINT: not the stakeholders).
Dealing With Different Stakeholders
Different stakeholders require different expertise from a product manager to deal with them. This is less of a science and more of an art. That is because people have different opinions, expectations, agendas and ways of communicating, and managing these differences takes a skilled product leader. The ability to manage the people involved in a project (customers, developers, external contractors, etc.) and their relationship with each other, goes a long way in guaranteeing the smooth and timely delivery of a killer product.
Let’s see how we can deal with different stakeholders in this section.
Customers
- Always keep it simple. Customers are only interested in how your product is solving their problems. And that’s the only point that should be focused on.
- Consider their feedback, but also understand that sometimes even the customers don’t know what they want. So make your decisions based on data, understanding, and natural instinct.
- Keep the communication short and precise, since customers don’t have time to absorb large pieces of information.
Executives
- Since executives don’t have enough time to get into the details of the product, always keep it high level with them and go into details only when asked.
- Focus on how the company will benefit from the product.
- Be a good storyteller for your product and always keep them in the loop.
Engineering, Design, and QA
- Explain to them the what and the why and leave the how since “how” is their expertise.
- Help them understand the impact of the product and how it benefits the customer.
- Give them enough information to start their work. But don’t get into day-to-day micromanagement.
Marketing, Sales, Customer Support, and Operations
- Collaborate with them at the early stage of the product development lifecycle.
- Explain the what, the why, and how the product will enable them to make the end customer’s life easier.
- Consider their feedback and prioritize it accordingly in the roadmap.
- Show the plans with evidence to support the data.
How to prioritize stakeholders?
Considering the fact that a product manager has to deal with multiple stakeholders, it will be a mess if the PM treats all the stakeholders equally. This is why it’s extremely important to prioritize the stakeholders. But the question is, how?
There is no one answer to this question because every organization is different and every PM has a different way to prioritize. But here’s one simple way to prioritize the stakeholders — the power/interest grid.
Here’s an explanation of every bucket:
- High power, highly interested people (Manage Closely): you must fully engage these people, and make the greatest efforts to satisfy them.
- High power, less interested people (Keep Satisfied): put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
- Low power, highly interested people (Keep Informed): adequately inform these people, and talk to them to ensure that no major issues are arising. People in this category can often be very helpful with the detail of your project.
- Low power, less interested people (Monitor): again, monitor these people, but don’t bore them with excessive communication.
With this grid, it would be easier for you to prioritize the stakeholders. For example, a VP of the company would have high interest and high power, so you will have to manage him/her closely. While an operations team lead would have high interest and low power and hence you can keep him/her informed.
Know when to say ‘No’ and ‘Not Now’
Considering the number of stakeholders a product manager deals with, it gets a bit overwhelming in terms of maintaining the relationship with these stakeholders. Every stakeholder has a different requirement, in fact, a lot of times they have a long wish list that they want to be implemented. This is where a strong product manager needs to know when to say ”No”, and when to say “Not Now”.
The primary role of a product manager is to build a product as efficiently and as fast as possible. And if he/she starts pulling every feature request from various stakeholders, it will impact the entire product development process. But we all know that saying no or not now can have effects on the relationship we have with our stakeholders.
Here are a few tips you can use to say no, those tips will help the product manager maintain a healthy relationship with the stakeholder in case he receives a “No”:
- Spend time understanding their requests and be genuinely interested in knowing what their problems are.
- Play the role of product ambassador effectively. Have in-depth knowledge of your own product so you are able to provide logical reasoning for any questions from your stakeholders. Support your reasons with data and user insights.
- In case you say “No” to a specific request, explain the “why” behind the “No”. This is extremely important since you don’t want to leave your stakeholders abruptly without a reason.
- And last but not the least, be open and friendly. In the end, we all are here to build impactful products and that can only happen when there is a strong relationship between everyone who is working on the product.
To sum it up: stakeholder management is the superpower standing between you and your product’s success.
Given the level of complexity and number of moving parts in stakeholder management, there’s really no one-size-fits-all approach to follow.
Stakeholder management can become very tiring or very exciting depending on how you as a product manager look at it. A strong product manager will always foster relationships with his/her stakeholders.
Be prepared for the landscape to change, and use empathy to better understand and bond with your stakeholders — so that, when the going gets tough, you know how to keep the project going too.
What problems have you faced in your role as a product manager when it comes to stakeholder management? Do you have any hacks that have made your life easier? Please comment below, I would love to know.
