Seasoned project managers know that project stakeholder management is one of the greatest challenges we face. And a big part of stakeholder management is the communications piece. There is actually a formula that will tell us how many different lines of communication exist on your project, depending on how large the project is. Using that formula, a small project with only 4 stakeholders has 6 lines of communication. That’s pretty reasonable, IF you have truly identified all of your stakeholders.
If you have 10 stakeholders, the number of communication lines increases to 45, which can create a problem. But suppose you are working on a moderate project – with 50 people who have a significant interest in the work. The number of channels grows to 1225. Now we have one person who is doing nothing but managing communications – and that’s on a moderate project. Take it up a notch and consider a project with 100 stakeholders. 4,950 communication lines!! Whoa jack!!
Last week, I wrote the second of a three-part series on the intersection of project management and blockchain. If you missed it, you might check it out here. In this blog, I’ll discuss some ways that blockchain technology could be used to improve project stakeholder management.
Shared project leadership
As I mentioned in one of my blogs, there can be multiple people in multiple organizations involved in project leadership. Consider the following kinds of projects:
- A legal matter, where multiple law firms are engaged, or where the office of general counsel wants to retain some of the activities.
- A government, or large enterprise project, where a consulting team is engaged to assist on the project.
- Public-private partnership projects, with huge numbers of stakeholders and varying interests and concerns.
- A project in which the project manager resigns mid-stream, and two or more people are selected to share the work.
- International projects, where there are multiple project managers in multiple countries.
Depending on which organization you’re in, you may have different perspectives on what is important. And, as I mentioned in another blog, transparency is a big question.
As I said in last week’s blog, effective working relationships depend on people having the right information at the right time.
So, which stakeholders need which pieces of data?
From a project management perspective, let’s think about stakeholder data and how to best accomplish the objective of communicating the necessary information to the right people at the right time in an effective way.
First, project managers need to know who those people are, what their interests and hot buttons are, and how and when they want to receive communications.
Second, project leadership needs to agree on what information can be freely disseminated. For some examples, consider a few questions that we could ask on some of projects that I opened with:
- The legal matter: Should the office of general counsel have open access to the matter files that the law firm is maintaining? What cost data details will a law firm want to openly share with its client’s office of general counsel? And, how might these decisions vary from client to client?
- Outside project consultants on a large matter: Who is really managing the project? The in-house team knows the in-house stakeholders and may be in a position to better identify risks. The outside team may have been hired for expertise, and be in a better position to determine how to solve the problems. It takes coordination, but are two or more people really going to be in charge? Is there documentation about who is doing what?
- Public-private partnership projects: How much data does the partnership want to share with the public, who is likely the ultimate client? Is there going to be complete transparency between the governmental group and the private group? Who will manage the software tool that the partnership selects to run the project?
I would argue that it’s much easier to come to some agreement on these questions in a blockchain world, using smart contracts – as I have discussed here. The reason is this. Consider the course of a project to be represented by the letters in the alphabet. The project starts at A and it ends at Z. Huge stakeholder management problems occur when one group thinks that the project is at C, and another group thinks that the project is at R.
And using a Waterfall project management approach, we typically depend on human beings to provide some input on where our activities stand. So, with that information, is the project at C or R? In a world of rapid change, unpredictability, and evolving resources, there are many flaws to the Waterfall approach. Part of the problem with the Waterfall approach stems from the difficulty in estimating projects in a rapidly changing world, where the activities have never been done before. And yet, some estimating is needed.
What estimated data do the different stakeholder groups need?
The answer depends on whether we are talking about schedule estimating or cost estimating; so let’s separate the two conversations.
To be clear, I’m not generally a fan of building detailed schedules. That doesn’t mean that I don’t have a general idea of when things will happen. And in a construction world, where independent contractors need to be on the site on specific days, the need for detailed schedule-planning increases.
If you can reasonably estimate a schedule, and need one, go for it. But far too often, I see organizations making best guesses on how long an activity will take (duration), and then, arbitrarily building in dependencies to get software to create a schedule. And while the schedule might be worth slightly more than the paper it’s printed on, it will take significant time away from activity execution in order to simply manage the schedule.
I find it more effective to know what my critical deadlines are, and then let the team work together to find the most effective way to execute the project, given the often-changing times. Teams must aim to always meet the critical deadlines, but not all deadlines are equal. Know the important ones.
When an organization has decided that it’s not going to create a detailed schedule, it needs another data point. It needs to know the size of its activities and projects, and how they compare across a portfolio of projects.
Complexity is a basic concept that allows us to compare the sizes of projects within an entire diversified portfolio of projects. It is not the same as durations, and is a much simpler concept. I outlined my thoughts on how to move from estimating durations to estimating complexity in a blog here.
I’m not suggesting that estimating costs is easier than estimating durations. The reality is that they are often related. So, when organizations can’t do one well, how will they do the other? The question here is what data points do we need in order for stakeholders to work effectively.
That depends on whether the project is being done for a paying client or not. When a client is paying for the work, the client usually wants to know what it’s going to cost. That is not to say that the work will be done on a fixed cost basis. That’s a different discussion. I’ve written on the subject of estimating complex projects here.
Even when the work is being done in-house, the people who are doing the work need to fully understand what they are being asked to do. Knowing what an activity is expected to cost is a great way to better understand the work. And managing a project’s costs is a great way to ensure that scope doesn’t get out of line. All of these factors directly impact stakeholder relationships.
What about a stakeholder register?
Traditional project managers are taught to know their stakeholders. In a large project, that can involve a stakeholder register of some sort. If the project is contained in one organization, it can be accomplished with an interface, of some fashion, with the contacts system that the organization uses. But when a project spans more than one group, that interface gets complicated.
There is value in a stakeholder register that interfaces with the smart contracts. There is solid tracking on what all of the worker bees are doing. And there are good analytics that can be reported at all levels. For example:
- Aggregate complexity by resource, team, department, organization, primary activity (a holding category for related activities), or project.
- Aggregate complexity of work completed, versus work in progress, versus work not started. This can further be broken down in the categories listed in the first bullet, providing even more resource usage data.
- Budget and profitability data, broken down by primary activity, project, project sponsor, project manager, activity cost manager, and team.
- Cost data on activities which are delayed, or completed ahead of schedule. This data can be broken down further by resource or team, for more meaningful insights.
When organizations understand their project portfolios, resources can be better managed. Then, teams can communicate more effectively and find opportunities for improved efficiencies.
Because blockchain data cannot be changed or deleted, and because of the way blockchain technology handles version controls, it provides a reliable picture of where the project is at any time. There should be greater clarity around scope, assignments, and progress, provided the data are entered into the blockchain correctly.
Dashboards, based on immutable data and designed with the different stakeholder needs in mind, can be created, thus improving trust between stakeholder parties. And executives stand to benefit from more reliable data metrics.
The simpler we can make it, the less need for financial wizards and complicated formulas, and the less blaming, criticizing, and adversarial relationships, the better. As much as technology seems glitzy and exciting and the news on AI seems to predict a future of robots, I still believe that highly functioning teams are the future. And I believe blockchain technology can improve project stakeholder management.
If the intersection of blockchain and project management interests you, I’d love to chat. I’m at a crossroads with Smart Projex, and assessing my next steps. What about you? Connect with me on LinkedIn here or schedule a call. Maybe I’ll feature you in an upcoming blog or a white paper about how to make this happen.