Engineering, project, and product managers deal with a wide variety of stakeholders. Some stakeholders are customers or clients, receiving the products and deliverables of our work. Other stakeholders are fellow team members, working with us to achieve project objectives and business goals. Finally, other stakeholders serve in functional and support roles with whom we negotiate for resources and guidance to reach desirable outcomes.
Regardless of a stakeholder’s role, engineering, project, and product managers will build the relationship using a three-pronged approach. Stakeholder relationships require care and nurture for a project to succeed. Successful, engaging stakeholder relationships are built on three key tenets:
- Efficiency, and
Effectiveness is defined by Dictionary.com as “providing an adequate or appropriate outcome.” Engineering, project, and product managers incorporate effectiveness measures in our work to ensure that we deliver the products and results promised in a project charter. Moreover, effectiveness demonstrates meeting scope, schedule, cost, and quality goals.
Project stakeholders focus on effectiveness during the initiation of a project. In new product development (NPD), for example, effectiveness measures will define feature sets of the new product so that customer requirements can be met. A product must be easy to use by its target market and should include certain plug-and-play features. Customer requirements may specify that a product is offered in different colors or different sizes. Packaging is another element of product design in which customers request specific features and attributes.
Customer and stakeholder requirements are usually gathered during the early planning phases of a project. Engineering, project, and product managers will convert stakeholder needs and expectations into specific, measurable product requirements. As the project progresses, managers will measure effectiveness in meeting project goals against these deliverable metrics. Thus, project effectiveness is determined by meeting the project scope.
Studies show that project schedule is a greater determinant of project success than any other variable. A project that is further behind schedule will suffer a greater cost hit than will a project that is just slightly delayed.
Efficiency is a management variable that will measure implementation of the project schedule and evaluate it against the plan. Engineering, project, and product managers have a whole suite of tools available to determine efficiency, namely, variance analysis.
Earned value management (EVM) is a common project management tool that compares the actual project schedule against the plan. Any significant gaps or trends are noted, and the project manager can take steps to reduce the impact of a schedule delay. EVM is an especially good tool for project efficiency because it not only examines the project execution to date, but it also allows an accurate forecast to predict project completion based on current performance levels.
The third prong of managing stakeholder relationships is satisfaction. Customer satisfaction can mean a lot of different things to various groups of stakeholders, so it is imperative that engineering, project, and product managers define satisfaction early in the project design phase. Simply delivering a product on-time and on-budget will not meet the definition of customer satisfaction.
One element of customer satisfaction that is relatively easy to measure is repeat business. Engineering and project managers can use repeat usage of tools and templates as a stand-in for repeat business while product managers will measure repeat sales. Regardless of the specific measurement, returning customers and end-users signal customer satisfaction.
Let’s take an example of an internal software development project to create an online experience for employees to engage their mandatory training criteria. The project may be effective in that it delivers a software tool available to all employees. The project can meet its scope of work requirements by creating an internet-based training delivery mechanism available globally at each work site.
Further, the project may be executed efficiently. Given a 3-month window in which to design, develop, and implement the software training tool, the project team can measure and meet the schedule goals. A software training program delivered in 13 weeks would be considered efficient in this case.
Yet, if the end-user stakeholders (customers) find the training software difficult to use or hard to navigate, customer satisfaction is not met. When the employees avoid using the tool or complain about access issues, the project is not successful. Customer satisfaction is a key element of building a successful stakeholder relationship.
On the other hand, if employees use the software training tool without significant prompting and return to use the tool as a source of knowledge to support their job function, the project can assess a highly positive level of customer satisfaction. Such repeat usage (or purchase) metrics are very easy to gather.
A Three-Pronged Approach to Managing Stakeholders
Engineering, project, and product managers need to build long-lasting and interactive relationships with stakeholders to assure project success. The three elements most important to stakeholder management are effectiveness, efficiency, and satisfaction. Effectiveness is measured by scope of work and delivering a product that meets customer requirements. Efficiency is measured by delivering the results of the project on time to the internal customer and by reaching the right market at the right time for external customers.
Finally, customer satisfaction can be measured by repeat purchase or repeat usage. A satisfied stakeholder, whether s/he is a functional manager or external client, will demonstrate satisfaction by returning for additional business. Satisfied stakeholders positively assess the quality of interaction with the product or service.
To learn more about project stakeholders and customer usage, check out self-study and other NPDP Workshops. Feel free to contact me at email@example.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!
Any of a number of general project management textbooks provide guidance on managing stakeholder expectations and customer requirements, including Successful Project Management by Gido and Clements or Project Management: The Managerial Process by Larson and Gray.
More specific to NPD is a book called Sense and Respond encouraging the interaction with customers and project teams to develop successful new products. We also discuss the role of customers and stakeholders in NPDP Certification Prep: A 24-Hour Study Guide and additional references at https://globalnpsolutions.com/services/npd-resources/.
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