The art of stakeholder management: 4 reasons it’s important for product managers, and how to become better at it
A typical product team probably has numerous stakeholders and dependencies to worry about.
A common agreement yet perhaps oversight is the idea that stakeholder management comprises the product management job: it’s the core skill that truly defines a good vs bad product manager (PM).
It’s easy for most to understand that product success often hinges on effectively understanding and addressing the needs and concerns of various stakeholders. The reasons are simple: a PM’s stakeholders consist of customers, dependencies, leadership, marketing team, sales, and other parties that are key factors. But while we hear all the buzz about the importance of PMs who get to be the center of excitement, the driver’s seat entails more turbulence than what most people imagine.
Aspiring PMs grow energized by the product role when they learn about the opportunity to see their idea get built from start to finish.
Here are four reasons why product management can be viewed as essentially stakeholder management:
😫 1. With every function of a business comes different expectations.
Many product managers will tell you they have a seemingly infinite amount of stakeholders to deal with all the time. But if we dive a bit deeper, what does that mean and why is it important?
When you’re the face of a feature or product, you’ll get the opportunity to work with many people outside of your dev, design, and marketing teams; maybe even folks with positions that you’ve never even heard of. In the B2C (business to consumer) world, these could be DevOps (developer operations), Legal, technical writers, and even an advertising department. For example, what if your business was working with a third party to develop an advertisement for your new product — you may have to work with unfamiliar faces to provide content and suggestions on your product’s most marketable features.
B2B (business to business) features teams focused on sales, education, and client growth. Product managers would need to adjust their lingo and tailor their explanations to the right audiences. Imagine the product team is developing a new feature that Sales has no idea how to pitch or earn money off of without your support. Likewise, other teams involved in selling, operations, or process improvement will also need to know what’s going on in product land before key decisions are made which may hinder business growth. While most can assume that each stakeholder group has its own sits interests, priorities, and expectations, the practical experience of managing them with various nuances is not felt until a PM actually jumps into the chaos.
Managing these diverse stakeholders requires careful communication, negotiation, and alignment of goals to ensure that the product meets the needs of all parties involved.
📊 2. Trade-offs every day, with everyone.
Engineering and Product are well aware of the ubiquitous idea of calculating trade-offs in decision-making. Typically, PMs will be tasked with making product decisions involving product ROI (return on investment), feasibility, effort, and viability. One generic example could be an internal dashboard that a product team may need to build for better dependency tracking, but it would require several developer months to get it done. A product manager would have to measure the opportunity cost to build the dashboard as opposed to working on something consumer-facing that could drive immediate revenue.
Trade-offs in stakeholder management on the other hand can become a different beast, with product management easily getting caught in no man’s land. Seldom are all stakeholders fully aligned with each other, and can easily have competing interests and priorities, resulting in butting heads. For example, imagine a PM prioritizing a feature request from the sales team that could push a contract to its finish line. Suddenly, marketing, design, and even your development team could be against the decision, citing concerns about tech debt or usability. A strong PM will weigh the pros and cons of each opinion or suggestion while aligning everything to the main goals of the business.
Effective stakeholder management involves weighing these trade-offs and making decisions that maximize value for the product and its stakeholders.
🗣 3. Bringing clarity to all.
In my first product role at Microsoft, my boss reminded me that a key part of my role was to “bring clarity” to our respective teams, which would demonstrate my value more readily.
Retroactively speaking, this proved to be difficult when I started. My ability to bring clarity across developers, data scientists, engineering managers, and other parties was hindered by my lack of understanding of a deep data platform. However, even as I worked to build up this technical knowledge, another factor came into play: storytelling.
Engineers were focused on efficiency and operational excellence in their development, which is a key piece of Microsoft’s Bing data platform. But when I tried vouching for key features or projects that needed attention, I wasn’t doing it the right way; the success metrics were communicated, but the end-to-end story was not. This was maybe because of our KR (key results)-driven culture. When it came to describing business impact, it wasn’t just about, for example, improving daily active users or search engine market share. It was about telling the end-to-end user experience, the high-level objectives, and how it positioned our product in the market. Everything — including dependencies, customer needs, ROI, and product positioning — needed communication. Once I began doing this, I encountered less friction in bringing alignment and driving collaboration.
Product managers must facilitate open communication channels, build trust, and create a shared vision for the product for all stakeholders. But they almost must do it in the right way and tell the full story of their ideas.
✍️ 4. Perpetual dependency tracking.
Building products is obviously complicated. It’s not as simple as, “Let’s develop this strategy document, flesh out the requirements, and start building with a deadline in mind!”
Dependency tracking has continued to grow more important as third party solutions and cross-team collaboration also grow. Building products from 0 to 1 or 1 to 100 takes multiple teams in today’s sophisticated software landscape. I’m not just talking about critical support from other teams such as Developer Operations (DevOps), design, marketing, and leadership resource investment. I’m also calling out the multi-developer team dependencies which can hinder product development easily if not addressed early. For example, if your development team is reliant on another team’s API or platform for data or infrastructure, then boom — that’s your dependency right there. If that other team’s API or platform becomes outdated or a newly innovative feature requires another supporting team to build something new, then your product is at risk of not being delivered in time. This introduces a new form of stakeholder management I insipidly call “dependency management”: fighting for your features and priorities against the interests of other dependencies.
Development dependencies matter, and can easily fall into our last bucket of stakeholder management.
🤝 Becoming better at stakeholder management
To become better stakeholder managers, product managers can adopt the following approaches:
A) Exercising open-mindedness and empathy for all stakeholders, not just your end customers.
Just because you “own” something doesn’t mean you always make the final calls. It’s the realistic nature of how decision-making in software teams works. If only the product manager made all the calls, chaos would ensue.
Understanding the perspectives and motivations of various stakeholders is crucial for effective stakeholder management. PMs should invest time in empathizing with stakeholders, actively listening to their concerns, and considering their viewpoints when making decisions. Otherwise, they’ll become the lone wolf in a team that will move on with or without them.
B) Clear and frequent communication.
PMs often need to ensure that the right stakeholders are kept informed about project statuses, new processes, designs, engineering decisions, changes, and other decisions in a timely and understandable manner. This itself could become its job if there are too many stakeholders at play.
Clear and transparent communication is essential for managing stakeholders effectively, but there are many ways PMs can do it optimally. Simple tactics, such as using various channels and communicating important decisions on a regular cadence could do the trick. But more nuanced approaches could be more impactful. This includes presenting ideas in meetings or saving 1:1s for leaders of teams that all need to be communicated.
No matter how it gets done, the message needs to get out there. Additionally, providing avenues for stakeholders to voice their opinions and feedback can help foster a sense of inclusion and ownership.
C) Investing in relationships.
A common trap I see is a PM investing their time and energy in product strategy and execution but seldom doing the same for their stakeholders.
Building strong relationships with stakeholders is key. PMs should invest in building rapport, trust, and credibility with stakeholders through regular interactions, collaboration, and delivering on promises. Cultivating positive relationships can help mitigate conflicts, build trust, facilitate smoother decision-making processes, and garner support for the product’s initiatives.
By focusing on empathy, communication, and relationship-building, PMs can enhance their stakeholder management skills, which can easily reflect on the success of their product 🔥.
About Me
My name is Kasey Fu. I’m passionate about writing, technology, AI, gaming, and storytelling 😁.
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