Stakeholder Management is emerging as a key Project Management competence in the delivery of increasingly complex and large real estate developments, particularly in the PPP sector.
Project Managers, as the leaders of real estate development teams, are having to re-orientate the efforts of their teams, in order to respond to the demands and requirements of a range of new stakeholders. The shift of public building provision into the private sector through PPP’s dramatically alters the traditional power and influence of project participants. Confusion can often arise over who is actually the client on PPP projects. The Contracting Authority, the Developer, the Funder and the Contractor could all equally be viewed as assuming the client role. This has created the need for the Project Manager to partner skilfully with the various client groups and key stakeholders in order to move projects forward. The key factor for the success of public private partnerships is the development of high levels of trust and confidence between the partners, as well as the addressing of cultural issues between them.
Changes in the way in which large and complex real estate projects are procured
Changes in the method of funding and procuring public buildings and infrastructure is introducing new and powerful stakeholders into the project arena, as well as altering the power and influence of existing stakeholders.
As projects shift from sponsorship by large public or private firms to alliances, the relevance of traditional project management methods is being superceded by the need to proactively manage stakeholder communication and expectations in order to gain consensus and buy-in.
Emergence of new stakeholders in the real estate environment
Changes to the power, influence and predictability of the existing stakeholders has altered the landscape and context in which development projects and their Project Managers operate. The traditional “industry recipe” is changing as the funding and delivery risk of public projects is moved into the private sector.
In response to this, “stakeholder management” is emerging as a significant Project Management competence in large and complex developments, undertaken as joint ventures between the private and public sectors. The challenge for the Project Manager is to manage the tension of the divergent views of the stakeholders. In order to create a collaborative approach rather than conflict, the Project Manager needs to arbitrate and encourage collaboration between the conflicting influences of the stakeholders. This can be achieved through timely communication and early participation of stakeholders. The Funders of PPP projects have emerged as a high powered and high interest stakeholder. PPP project teams are having to re-orientate their efforts in order to satisfy the demands of this new stakeholder. Funders are insisting that the impact of statutory and non statutory undertakers, third parties, the contracting authority, the operator and neighbours are proactively managed very early on in projects. In order to prevent a situation where these stakeholders actions could impact negatively on the successful completion of the PPP project and commencement of the income stream to enable servicing of the debt. This stakeholder has introduced the following project drivers:
- Early completion of design and
compliance
well in advance of construction
- Early demonstration that the necessary consents and permissions have been obtained for the project
- Linking the successful certification and review of the detailed design by the Contracting Authority, directly with payment to the Design and Build Contractor
Critical factors for stakeholder satisfaction
In order to steer complex projects to a successful completion, Project Managers are increasingly having to:
- Partner skilfully with various client groups and key stakeholders
- Proactively manage timely stakeholder communication
- Identify and manage stakeholder expectations
- Gain consensus and buy in from a wide variety of internal and external project stakeholders
- Balance stakeholder interests
The Project Manager has a pivotal role in promoting and controlling the dialogue of the project with stakeholders, through consultation as well as formal and informal meetings. The timeliness of the dialogue will determine how it is perceived; i.e. whether or not a stakeholder considers they are being offered a genuine opportunity to participate and not merely placated.
