Relationships Matter: The Art of Stakeholder Management

Here are reasons why stakeholder management is important for product managers, and how to become better at doing it.

A typical product team probably has numerous stakeholders and dependencies to worry about. Stakeholders consist of customers, dependencies, leadership, marketing team, sales, and other parties that are key factors.

And for product managers (PM) — stakeholder management is the skill that defines a “good” versus a “bad” product manager. That’s why product success often hinges on effectively understanding and addressing the needs and concerns of various stakeholders.

But while we hear all the buzz about the importance of product managers who get to be the center of excitement, the driver’s seat entails more turbulence than what most people imagine.

Here are reasons why stakeholder management is product 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 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 development, 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 advertising. 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 focus 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 sell on the market, without your support.

Likewise, teams involved in sales, operations, or process improvement will also need to know what’s going on in product development before key decisions are made which may hinder business growth.

While each stakeholder group has its own interests, priorities, and expectations, the practical experience of managing them with various nuances is not felt until a product manager (PM) enters 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, product managers 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 challenge, 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 product manager 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 technical debt or usability. A strong product manager 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 because of our “key results” or “KR” driven culture. When it came to describing impact, it wasn’t just about 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 — all 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 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:

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 motivations of various stakeholders is crucial for effective stakeholder management. Product managers should invest time in empathizing with stakeholders, actively listening to their concerns, and considering their viewpoints when making decisions.

Product managers either learn to understand their stakeholders — or they’ll become the lone wolf in a team that will move on, with or without them.

Clear and frequent communication.

Product managers often need to ensure that stakeholders are kept informed about project statuses, new processes, designs, engineering decisions, changes, and other decisions in a timely and understandable manner — especially if too many stakeholders are involved.

Clear and transparent communication is essential for managing stakeholders effectively, but there are many ways product managers can do it optimally. 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.

Investing in relationships.

A common trap I see is a product manager 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. Product managers 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, product managers 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 😁.

Follow me on Medium for more passion, product, gaming, productivity, and job-hunting tips! Check out my website and my Linktree, and add me on LinkedIn or Twitter, telling me you saw my articles!

I would like to thank Tremis Skeete, Executive Editor of Product Coalition, for his valuable contributions to the editing of this article.

I also thank Product Coalition founder Jay Stansell, who has provided a collaborative product management education environment.