The Ultimate Guide to Stakeholder Management for Product Managers
One aspect of being a product manager that you certainly can’t avoid is Stakeholder Management. Maybe you’ve been told that your job is to “keep them happy.” By default, that’s not going to happen all the time unless you want a never-ending list of features that probably nobody needs. One day you’re hailed as the savior and the next day you’re the evil person who said no.
Be honest, is herding your sheep – managing your stakeholders – driving you crazy sometimes? Don’t worry. We got some insights and tips for you that’ll take the pain out of it.
Who Are Your Stakeholders?
Everybody wants to have a say in how your product should look like. However, that doesn’t make everyone who sends you a feature request a stakeholder. To test if you should count someone as a stakeholder or not, ask yourself: Does this person has veto power or can somehow prevent me from launching? Is this person impacted by the product, either directly or indirectly?
Product managers will encounter external and internal stakeholders. Your customers also count as stakeholders, but they won’t typically show up at your desk every day to ask you questions. For now, let’s focus on internal stakeholders. There are four main groups:
- Engineering team (developers, designers, analytics)
- Executives (leadership and management)
Depending on the size of the company, you might have to consider other departments like legal, compliance, finance or business development.
What Your Stakeholders Really Want
Stakeholders are people too. They are measured for success and want to look good in front of their boss. Find out what goals and agendas they have. What problem are they trying to solve? By fully understanding their motives, you’ll be able to emphasize with them. Every demand and feature request they make is based on the assumption that it will somehow help them achieve their goals.
Let’s look at what the four main stakeholder groups typically want:
Engineers: They want to know the vision for the product and how their work contributes to getting there.
Executives: They are mostly interested in strategy and the big picture. How will the product contribute to the success of the company?
Sales: They care about how the product or new features are going to give them a competitive edge. Selling more is what they care about. They can provide valuable input as they spend a lot of time in the market and with customers.
Marketing: They want to know what’s unique about the product and how it can benefit the customer so that they can develop a story around it.
How to Handle Stakeholder Management Like a Pro
First things first: Trust is key! Your stakeholders must be able to fully rely on you when it comes to updates about important decisions and changes. Show them that you not only understand their issues and concerns but that you are actively looking for a solution to address them.
Should your stakeholders believe that they are not being taken seriously, they will either try to escalate the issue or control you. To ensure that it doesn’t get that far, let’s look at four steps you can take to manage your stakeholders like a pro.
Know Your Stuff
As a product manager, you’re the essential connection between multiple functions. Having a deep understanding of your customers, the product, the technology, the business, and the analytics is a necessity to do the job well as others rely on you for your expertise. When you share your knowledge openly and are accessible for questions, you’ll soon be well respected.
Your stakeholders will be even more inclined to listen to you when you back your reasoning and decisions with real data (for example user feedback, usage reports, sales details or competitive information). Otherwise, you might be quickly caught in a fight of opinions.
Build a Relationship with Your Stakeholders
All too often product managers reduce stakeholder meetings to the gathering of requirements (aka feature requests) and the sharing of status updates. And after a while, that’s what your stakeholders will associate you with.
Instead, focus on building a relationship with your stakeholder groups. Sit down with them and listen. The better you understand their concerns and constraints, the better you can find solutions. Be open, transparent, and ask a lot of questions. A collaborative relationship based on mutual respect will get you much further than standard status updates.
It seems like a smart idea to organize big stakeholder group meetings. In theory, that should save time as you’re speaking to everyone at once. However, such meetings are hard to control and can involuntarily turn into a steering committee. Better collect private feedback in one-on-one sessions.
Tailor Your Approach
You probably have noticed quickly that your stakeholders speak different languages. As they care about different things, they need to be approached in a specific way for maximum success and collaboration.
Here is how you can tailor your approach for the four main stakeholder groups:
- Tell them what you want the product to do and especially why.
- Help them understand how the features will benefit the customer.
- Most importantly, don’t tell them how to do their job. They love to figure that out themselves.
- Be available and approachable, but don’t micromanage.
- Keep it high level.
- Don’t go into nitty-gritty details unless asked.
- Focus on the outcome and results for the company.
- Be enthusiastic and positive.
- Tell a story around your product.
- Always answer the question: How will this help them make more sales?
- Show them how, ideally with evidence, the next initiatives will help the team’s sales numbers.
- Take their suggestions seriously, but make sure to test any assumptions before adding new features to the pipeline.
- Start collaborating with them as early as possible.
- They need to understand who the target user persona is and how the product fits into the market.
- Explain how the product is going to change the life of the customers.
- Let them develop a compelling story around the product.
Always keep in mind that you’re not building a product based on the consensus of some internal people who do not buy or use it. That would result in a terrible outcome for your customers.
You already saw this coming: It means you have to say “no” to your stakeholders sometimes. How? Spend time acknowledging their request and show empathy for their situation. Then provide a reason why you can’t accommodate their needs at this moment. Unlike a context-free rejection, this approach will still get you lunch invites.
Multiple stakeholders – a better product?
Wouldn’t it be a bit too easy if you only had one stakeholder? Think of it this way: By taking a variety of opinions and inputs into consideration, you’re going to build a product that is so much better.
Last updated on November 15, 2022.