In one of my previous ProductCraft articles, “Your First 30 Days on the PM Job: Strategies for Success,” I emphasized the fact that any product management position is a leadership role and one that requires leading by influence rather than authority. Additionally, the article suggested that one of the very first things a PM joining a new company should do is identify the key stakeholders and decision-makers they’ll be working with. I also stated that effective leadership-by-influence is done by building empathy with these stakeholders through effective communication. That is how product managers can earn stakeholders’ respect and become a go-to person within their organization.

In this article, I want to focus specifically on stakeholders. I’ll identify the key ones and propose some useful tips for effectively managing their expectations. But before we get started, we must discuss the foundation of effective stakeholder management: strong communication skills.

Why are communication skills so important for PMs when dealing with stakeholders?

Obviously, communication skills are not just important for product professionals. In fact, they play a key role in career success in just about any industry or function. Actually, I want to go beyond that — this skill can add many benefits to our lives in general! 

But in the context of stakeholder management for PMs specifically, we need to take a step back and review both product management’s place within a company as well as its key responsibilities.

The famous product management diagram in my other article clearly shows that the discipline sits at the intersection of business, user experience, and engineering. This reflects one of the major responsibilities of product managers: working closely with other stakeholders from these disciplines to define, build, and ship products customers love. And the main point to appreciate here is that each of these teams is a separate world unto its own. In most cases, stakeholders from each have very different mindsets, perspectives, goals, considerations, and constraints.

For these reasons, you can’t communicate with these different parties in the same way. As a truly great product manager, you have to be master at putting yourself in their shoes and seeing the world from their eyes. You must not only understand their perspectives, but also commit to considering their input and making your best efforts to resolve their concerns. That is how you build up trust and why communication is critical to managing stakeholders efficiently. 

Who are the main stakeholders and why do PMs need to manage them?

Your customers or users are surely the key external stakeholders for whom products are built. But when we talk about stakeholder management, it mainly refers to the internal stakeholders mentioned earlier: the business, user experience, and engineering.

Let’s look at each in more detail. 

The business

The overall business is the biggest stakeholder by far. Depending on the size of the company, it may include:

    • Executives and leaders who define the business’s mission and strategy and will want to know how your product aligns with that mission.
    • Salespeople, who are close to the customers and can provide valuable feedback to PMs. In return, they want to know how your products or new features can compete in the market.
    • Marketers who care about how the company’s products or services would add value to customers’ lives. They in turn use that value to create a winning marketing message. 
    • Operations and customer support teams that can tell product management whether their offerings are scalable, deployable, and maintainable.
    • Finance team members to make sure value propositions fit within the business model of the company.
    • Legal officers who check your value propositions against all legal aspects.
    • Compliance officers who make sure all product offerings are compliant with relevant policies and standards.
    • Business development teams that manage relationships and contracts.
    • Program management officers (project managers, delivery leads) who help with product development and delivery.

User experience

On the other hand, user experience normally consists of user researchers, visual designers, and user experience designers.

Engineering

And of course, the engineering department works to build products and advise on the suitability of various technologies to use. This group includes system architects, (front and end) developers, quality assurance, and even data scientists.

The list looks rather long, but the key point to be aware of is that not every internal party is involved during the product lifecycle. And different teams come into the picture at different stages. Also, various individuals in any of the above-mentioned departments may express their ideas and opinions without really being key stakeholders. 

Marty Cagan, the author of Inspired, suggested a simple formula to help identify critical stakeholders. He says, “The main test of whether a person is a stakeholder is whether or not they have veto power, or can otherwise prevent your work from launching.

In other words, the stakeholders that product managers should always have on their radar are the ones who have an interest in their proposition, as well as influence to help them move these propositions forward. So, the first step is to identify these stakeholders as you will need their support, information, influence, and buy-in in order to progress with your product vision.

Tips for effective stakeholder management

Once you’ve identified the key stakeholders, you will then need to prioritize them. A very simple and standard tool to use is the Stakeholder Map.

Stakeholder Map

Those stakeholders sitting on the top right of the diagram are the ones that product managers should put all their effort in order to keep them engaged throughout. Having said that, I am not suggesting ignoring the res. The following tips will apply to all of them.

  1. Build trust and good relationships by being an active listener, appreciating their views and concerns, finding out their motives and agenda, committing to do what you say, and of course, showing them respect. Do not hesitate to schedule one-on-one sessions with them.
  2. Speak their language by tailoring your approach based on what matters to them the most. For example,with executives you have to keep things high-level and short. With engineers, you would need to go into detail and even show off your technical know-how. 
  3. Continuously develop your knowledge of the business domain, your customers, technology, and the market. <ake confident decisions by backing your reasoning with evidence. And the best evidence is data!
  4. Learn to say “no.” After all, it’s your responsibility as a product manager to set boundaries and protect your product, customers, and indeed, the business. The most efficient way to say “no” is to show appreciation for their opinions and motives first. Then, provide evidence-backed reasons why their needs cannot be accommodated at this stage.  
  5. Keep the momentum going by continuously engaging with your stakeholders, keeping them informed, and seeking their input.

Why might stakeholder management be difficult?

No matter how much effort you put in or how skilled you are at managing your stakeholders, at the end of the day it can be impossible to make everyone happy. And that shouldn’t be your goal anyway. Being a master at communication and stakeholder management is the most efficient part of the equation. However, there are other factors that you need to be conscious of. These might include the size and dynamics of the company (read — politics), lack of access to influential and interested parties, and conflicts due to differing objectives and priorities. Such factors make effective stakeholder management difficult indeed. 

Although it may be difficult to manage multiple stakeholders, it can also result in a better product. This is simply because a variety of ideas, inputs, and considerations were taken into account throughout the entire product management lifecycle.  

In my experience as a product person, you have to be ready to be loved one day then hated another! But never take either for granted or personally, as both change as the dynamics of the company or stakeholders change. 

About the Author

Pouya is an award-winning product leader and strategist in the artificial intelligence, fintech, and life science spaces. He is a featured speaker at Product School and the co-author of The AI Book -- the first globally crowdsourced book on the application of AI across financial services.