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Jim Owens PMP: Stakeholder Perceptions

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Jim OwensPMP

Jim OwensPMP

eBay is an interesting model of commercial life. If you haven’t tried buying and selling on eBay, you really should, as you can learn a lot about buying, selling, marketing, distribution, and so on. Importantly, you can also learn something about stakeholder expectations.
When I was in high school in Belfast we used to play a simulation game on a computer (yes, they had computers back then). The game would run over a period of months, and was a trading simulation, where we would “manufacture” items, market and sell them, buy materials, pay salaries, fixed and variable costs, and so on. I don’t think we learned a lot from it, because it was too remote from real life; all you could control really was the amount and timing of money spent in each area (i.e. the cash flows).

eBay is a much better environment in which to learn. As a seller you can buy or literally manufacture items, photograph the items, design the advertisements (Auctiva is a good help here) then work out your marking strategies, pricing levels, sale types, and so on. And you can apply continuous improvement principles to your selling efforts.

After selling the items you then need to pack and despatch them. After that, you wait to see your feedback from your buyers, i.e. have you met your stakeholders’ expectations?

When I first started selling on eBay I quickly learned of deficiencies in my processes. Luckily I got good feedback, but there were comments in the feedback with regards to needing better packaging.

The interesting thing was that despite the complaints on my early packaging methods, everything arrived in perfect condition, so my packaging was definitely “fit for purpose” even when travelling overseas!

What I learned from this was that, providing something that did the job was not enough, I also had to cater for the very important “stakeholder perception”.

Nowadays when I mail a small item, I mail it in a much larger box than it needs, wrap the item in bubble wrap (that is doesn’t need), and maybe include some colored tissue paper (just for show). The buyer has to pay more for delivery than before, but everyone is very happy.

PMBOK has interesting information on stakeholders.

“The project management team must identify both internal and external stakeholders in order to determine the project requirements and expectations of all parties involved.”

That sounds simple enough, but there is a trap in it (as there is with most things in project management). If a stakeholder says they want the project to develop a powerful car, the term “powerful” is rather subjective. And this is where the project manager’s interpersonal and management skills come in, to allow them to dig beneath the surface of the request. For example, does the stakeholder mean:

* An SUV that can haul a big boat up a vertical cliff face, and looks like a Hummer on steroids, or
* A sleek, flashy sports car, girl/guy magnet, that looks and sounds Italian and can go from 0 – Oh my God!!! In 4 seconds, or
* Bullet and bomb proof

Unless you unearth the real expectations of the stakeholders (the reasons behind the reason) you will increase risk in the project, as you may not be able to satisfy the stakeholders.

Dealing with feedback

eBay has a feedback system, so a buyer can rate a seller by leaving good, neutral of negative feedback. And a seller used to be able to leave similar feedback for buyers.

One of the problems with the system was the “tit for tat” attitude, i.e. if a buyer got a bad deal and left negative feedback for the seller, often the seller would automatically leave negative feedback for the buyer.

Ebay attempted to address the problem by removing from sellers the ability to leave negative or neutral feedback for buyers! If you read the help files on eBay it states that it’s important to leave accurate and honest feedback – but of course as a seller you can’t leave honest feedback on bad buyers

As part of my risk management, I include a card in every eBay package that says in big red capitals across the top “DON”T PANIC!!!” (inspired of course by the Hitchhikers guide to the Universe) and go on to say not to leave negative or neutral feedback, if there are problems, simply contact me and we will work through the problems together.

The lunatic fringe.

Most buyers are great people, but now sellers are in the situation where a minority of bad buyers bully them – just because they can – and as there is no way to leave honest feedback on these people, unsuspecting sellers can’t be warned.

For example, some time ago I sold a Matchbox car. It was exactly as described and photographed, well packaged, and delivered quickly, but the buyer left me negative feedback – his reason? “Smaller than expected”

Come on fella –  they’re all around the same size (hence the name “Matchbox”)

I think where some buyers miss it, is that the feedback is actually meant to be on the buyer, not the item.

For example, suppose you buy a phone from a store, and the phone doesn’t work, do you say that the store is bad (negative feedback). No, not at this point. You go back to the store, and if they exchange it with a smile, everyone is happy. It’s a bad store only if it doesn’t try to fix the problem.

Similarly with eBay. But a small minority leave negative or neutral feedback, despite the seller fixing the problem

I like BAD things

Another potential problem in project management is that we are so up-to-our-armpits in doing good things for our buyers/stakeholders, that we may overlook the possibility that some people are hoping for the reverse to happen.

It’s a bit like the old joke:

“Hurt me!’ said the masochist.

“No!” said the sadist.

I can’t stress too much that you need to know your stakeholder expectations, why they want what they want, otherwise you can’t satisfy them.

Or as PMBOK puts it (very badly), “A project can be perceived as having both positive and negative results by the stakeholders. Some stakeholders benefit from a successful project, while other stakeholders perceive negative outcomes from a project’s success…”

What they meant to say is, some stakeholders view a positive outcome as a successful project, whilst other stakeholders view a negative outcome as a successful project. Yes folks, some stakeholders actually want your project to fail!

For example, your project may be to investigate the feasibility of drilling for oil on the Great barrier Reef, and it’s just possible that one or two people may want this project to fail.

PMBOK goes on to say, “The interests of negative stakeholders are served by impeding the project’s progress. Overlooking negative stakeholders can result in an increased likelihood of failure.”

(Or success, if viewed from the negative stakeholder’s viewpoint)

So you as project manager, have the job of balancing these conflicting objectives, you can’t just ignore the negative expectations and hope they will go away.

If you just apply the golden rule of business here (the person with the gold makes the rules) and cater just for those expecting positive outcomes, you can miss it, big time! I have seen for example, a housing development project stopped dead in its tracks, because a small (overlooked) group managed to make a successful appeal to local government on environmental grounds

You can read more on managing stakeholder expectations in PMBOK10.4 “Manage Stakeholder Expectations is the process of communicating and working with stakeholders to meet their needs and addressing issues as they occur.”

Jim Owens PMP

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