The Principles of Project Management the Staff and the Users of the Airport - Essay Example

?Table of Contents 0 INTRODUCTION TO STAKEHOLDER MANAGEMENT 1 Role of Stakeholder Management 2 Significance 3 Stakeholder Categories 4 Efficient management of Stakeholder management 1.5 Techniques of Stakeholder management 2.0 CASE STUDY 2.1 Heathrow T5 - Construction and Opening 2.2 Lessons to be learned 2.3 Conclusion 3.0 REFERENCES 1.0 INTRODUCTION TO STAKEHOLDER MANAGEMENT Stakeholder management in projects is the method of identifying individuals or a group of individuals, organizations that are likely to make an impact or get affected by the activities involved in a project or posses a role or interest in the project. Stakeholder management can also be defined as the systematic identification, analysis and preparation of actions to communicate with, discuss with and manage the stakeholders involved in any project. Identification of stakeholders of a project holds a lot of significant value for the progress / results obtained from the project. External groups, Individuals, Clients, Contractors, Funding Partners, Consultants, Employees and Work Force, and other government / regulatory organizations can be identified as stakeholders in a project, (Bourne, 2010). Further, categorizing the stakeholders according to the degree or level of impact they can put on a project activity or can get impacted by it. This knowledge of stakeholders assists in evaluating how the various interests of stakeholders should be addressed and managed in an efficient manner. 1.1. Role of Stakeholder Management The role of stakeholder management is to create utility for the project manager in order to get acquainted with all the participants / stakeholders of the project and their respective interests, create an equilibrium between the inputs / contribution and the incentive given by and to the stakeholder, set up an unbiased basis for effectively managing individual stakeholder requirements, decide the participation level of each stakeholder during the planning and execution part of the project, promoting stakeholder interests in the project through effective communication strategy and offering rewards to shareholders. Stakeholder analysis can be carried out at the commencement of the project or at regular intervals during the execution to track the changes in the attitudes of project stakeholders as the project advances, (Patrick, 2008). 1.2 Significance The significance of Stakeholder management lies in the need to make clear the consequences of predicted modifications, potential risks, and opportunities that face the project. Stakeholder management is also vital since it helps to identify the risks and planning for strategies to reduce the effects of risks on the project, (Deming, 1982). 1.3 Stakeholder Categories Stakeholders can be easily classified into four different categories depending upon their potential to collaborate or threaten the project execution or results. 1. Supportive stakeholders are those who do not wish to threaten the project proceedings and desire to support the project goals and objectives. These types of supportive stakeholders may include the suppliers, funding organizations, company management and consultants. 2. Marginal Stakeholders are those who are neither extremely menacing nor helpful, even though they possess a large stake in the project and can affect the decisions, but are not in general concerned. These may consist of environmentalist groups, and media. 3. Non Supportive Stakeholders are those that have an elevated potential to influence the project in a threatening manner but are short on the potential for cooperation and are the most worrying source of concern for the project manager. These may include the labor unions, governmental organizations, and at times the media. 4. The mixed stakeholders possess an equal potential to assist or threaten the project and usually consist of clients, end users of the project, (Rowley, 1997). 1.4 Efficient management of Stakeholder management Lastly, in order to effectively manage stakeholders within a project environment, it is important for the project manager to present lucrative offers like rewards, and growth opportunities. Offering rewards and incentives to suitable stakeholders can at times assist the project manager in altering the perceptions of some negative and passive stakeholders and promote them to actively take part in the project. Also providing opportunities of work and allotting responsibility, giving wider scope of work area management to stakeholders like labors, junior executives and team members is also another way to keep the stakeholders satisfied. Training sessions for the unskilled labors employed at the site will assist them in sharpening their skills for future assignments also, (Bourne, 2010). 1.5 Techniques of Stakeholder management Discussing the various techniques employed in stakeholder management, some of the most common ones are matrix and circle stakeholder analysis. In the case of a stakeholder matrix, the stakeholders identified for a project are plotted against two variables, which may be the level of stake against the resources of the stakeholder. Another set of variables that might be employed for the stakeholder matrix are the significance of the stakeholder to the project and the level of influence of the stakeholder on the project, (Bourne, 2009). The circle matrix is amongst the most widely sued form of stakeholder analysis. In this method, all the stakeholders are identified and then arranged according to the levels of their importance to the project in the various layers of a circle. These various layers can be high, medium, low, neutral, and the variable can be support or influence of the stakeholder, (Bourne, 2008). These layers may be in differed colors as well. The stakeholder analysis is a five step method which usually consists of the following - Stakeholder identification; Stakeholder prioritization according to their relative importance to the project; Stakeholder mapping to analyze the stakeholders; Stakeholder engagement through proper and effective communication methods; Analyzing the effect of the engaging the stakeholders in the project. Given below are two examples of Stakeholder Matrix and Circle Analysis. Fig 1: Stakeholder Matrix Fig 2: Circle Analysis 2.0 CASE STUDY Apart from delivering results, projects are basically about managing external and internal relationships, (Egan, 1998). It is important for a project that all the stakeholders involved should benefit from the results. The focus of this case study is the Heathrow Airport Construction project, which in spite of being a success at construction faced a showdown at its disaster opening in 2008, where a large number of bags were lost. These problems due to ineffective management and lack of intercommunication with every stakeholder involved in the project and the lessons that can be derived from the case will be studied in this section. 2.1 Heathrow T5 - Construction and Opening With a budget of ?4.3bn, the Heathrow T5 project was one of the most successfully completed construction projects in the UK which comprised of the most efficient project management practices like high level of collaboration, and minimized risk management and its practices proved to be a landmark for other similar projects, (Sharon, 2008). The operations of the airport initiated on 27 March, 2008 and a number of problems were already visible due to the poor planning and inefficient preparation of the authorities – flight cancellations, loss of over 10,000 baggages, stranded passengers and commuters, (House of Commons Transport Committee, 2008). The CEO, Willie Walsh, stated that the problems were not given due attention and the building and the staff already had concerns before moving into the airport premises like car parking shortage, Security delays, deficiency of staff members, overloading of baggage handling systems and unfamiliarity of the staff with the systems deployed at the airport. The failure of the management to manage the end clients (stakeholders) of the project damaged the reputation of the project, (Colantonio, 2009). 2.2 Lessons to be learned The failure was due to the poor stakeholder management and its related inefficient management of communication and collaboration with all those concerned people like staff, employees, and passengers indicate that such projects should pay lot of attention to these attributes of project management, (Crane, 2010). The project manager did not pay attention to the requirements of the passengers (end users), adequate staff training methods, infrastructure, and probable risks during initial operations. Thus, the main lesson that can be learned is that when stakeholders are well informed of every activity and are actively engaged, projects can be a success, and if not, projects tend to fail, (Potts, 2006). The management had identified a list of stakeholders as follows – 1. Activity 2. Current Stakeholders (This included the funding partners, government organizations etc.) 3. Team and Staff employees 4. End users (passengers) As could be seen, the management did not gave enough importance to the third and fourth ranked stakeholders – Team and Staff Employees and the End users (passengers) and gave importance only to the current stakeholders during the construction phase of the project. This caused all the problems, since in order to prepare for the opening of the airport, it was essential that the staff employees and the team are kept in the loop and are properly communicated the aims of the project during the opening and the initial working of the project, (Bourne and Walker, 2008). However, neither they were involved nor their concerns about the lack of preparation were heard by the management. The management choose to open up the airport and operate it under ‘urgent mode, with many things out of place. As already stated in the literature, stakeholder management could be done once in the starting of the project or may be done at regular intervals of the project. The stakeholder analysis and management done for the construction phase of the project was successful and construction was in time, however, the stakeholder analysis done for the second part – the opening up of the airport facility to the public was wrong and a failure, (Patrick, 2008). However, a new list of stakeholders could have been identified by the management as per their importance. Here is a revised list of stakeholders for the Heathrow Airport Opening phase, which if followed could have saved the situation - Passengers Airport staff Baggage department employees Infrastructure development team members Management team 2.3 Conclusion The tedious task of managing stakeholders both inside and outside a project requires good planning / scheduling / forecasting and leadership skills. Engaging stakeholders in an active mode into the project is the key to a successful delivery of the project. The construction of the airport terminal was indeed according to the principles of project management – on time and within budget delivery, but the management was not able to cope with the expectation of the management to open up the airport early in spite of the various glitches still present. The company failed to identify its stakeholders – the staff and the users of the airport – the public and widely faced criticism and losses. Therefore, the conclusion is that it is very important in projects to identify, analyze the stakeholders and their participation levels and engage them actively in the project to deliver successful results. 3.0 REFERENCES 1. Bourne, L. (2010). Stakeholder Relationship Management and the Stakeholder Circle. Saarbrucken, Germany, LAP - Lambert Academic Publishing. 2. Bourne, L. (2009). Stakeholder Relationship Management: a Maturity Model for Organisational Implementation. Farnham, Surrey, UK, Gower. 3. Bourne, L. (2008). SRMM: Stakeholder Relationship Management Maturity. PMI Global Congress,EMEA. Malta. 4. Bourne, L. and D. H. T. Walker (2008). "Project relationship management and the Stakeholder Circle." 5. International Journal of Managing Project in Business 1(1): 125 - 130. 6. Crane, A. (2010). Rethinking Construction and Making Change Happen. CIOB Global Construction Summit. Shanghai, China. 7. Deming, W. E. (1982). Out of the Crisis. Melbourne, Australia, Cambridge University Press. 8. Egan, J. (1998). Rethinking Construction. London, HMSO, Dept of Trade and Industry. 9. House of Commons Transport Committee (2008). The opening of Heathrow Terminal 5. London, House of Commons 10. Potts, K. (2006). Project Management and the changing nature of the quantity surveying profession -Heathrow Terminal 5 case study. COBRA 2006, London, The RICS, London. 11. Rowley, T. J. (1997). "Moving Beyond Dyadic Ties: A Network Theory of Stakeholder Influences." Academy of Management Review 22(4): 887-910. 12. Colantonio, M. 2009. Crisis Management Lessons From Terminal 5. Business Community. [Online]. Available at: http://www.continuitycentral.com/feature0566.htm. Accessed 13 March 2011 Mind Tools. 2009. 13. Risk Analysis and Risk Management. Evaluating Project Risk Management in the construction of London Heathrow Airport’s Terminal 5. And managing the risks you face. [Online]. Available at: http://www.mindtools.com/pages/article/newTMC_07.htm Accessed 13 March 2011 14. Sharon, D. 2008. Heathrow’s Terminal 5: History in the Making. Oxford: John Wiley & Sons. 15. Patrick, W.2008. Risk Attitudes in the Construction Industry: Avoidance Does Not Work; Case Study of Wembley Stadium and Terminal 5. Practical PM Pty Ltd. [Online]. Available at: http://www.mosaicprojects.com.au/PDF_Papers/P084_Risk_Attitudes_in_Construction_PPT.pdf. Accessed 13 March 2011. Read More