External Stakeholders are individuals or groups outside a business or project, but who can affect or be affected by the business or project. Arguably external stakeholders wield the most influence on the long term success of a business or project, because they will often be the end users and customers. stakeholdermap.com
Who are external stakeholders?
The image above shows typical External Stakeholders suggested by Tres Roeder in Managing Project Stakeholders: Building a Foundation to Achieve Project Goals So we can see that Internal Stakeholders are groups or individuals within an organization or project, whereas external stakeholders are the customers, distributors, governments, suppliers, communities, laws and regulations. (Karim, et al., 2007, pp.8).
Other definitions of External Stakeholders
IFC's handbook includes people affected by a project, people with an interest in it, and those able to influence its outcome. Its focus includes affected communities, public authorities and civil society organisations (IFC, 2007, pp. 3 and 10).
Why are external stakeholders important?
All stakeholders can impact your organization or project. Internal stakeholders may appear more important because of their proximity to a project or initiative. Internal stakeholders may well be 'close' and may well also be more immediately influential, but their influence may be only be key in the short term.these distractions [external stakeholders] can have a major influence on whether the project will be a success. For example, the cost of dealing with pressure groups protesting against a new bypass can add up to 15% to the cost of the project. R. Turner, 2014, pp 758While external stakeholders may feel like a distraction or distant from the task at hand it would be a mistake to exclude them from your stakeholder analysis. You may find this generic list of stakeholders useful for identifying your external stakeholders.
How external stakeholders influence project decisions
An external stakeholder does not need a seat on your project board to change your plans. Their influence may come from something you need, something your work will disrupt, or people who trust their judgement.
- Permission: a regulator, landowner or approving authority may control whether an activity can proceed. Find out which decision you need, what evidence supports it and when it must be made.
- Dependencies: a supplier may control a scarce component, a utility connection or access to a system. Your deadline in a project plan does not reserve a place in their delivery schedule.
- Commercial choices: customers and distributors can change orders, reject an awkward process or choose another provider. A technically successful launch can still leave you with a service nobody wants to use.
- Public confidence: residents, customer groups and local organisations can bring an overlooked problem to wider attention. An unanswered concern can become the story people hear about your project.
These relationships can also improve the work. A distributor may spot a packaging problem before production starts. A neighbour may know when a proposed access road floods. Ask what external stakeholders know that your team does not.
Finding external stakeholders who are easy to miss
Your customer database and supplier list are useful starting points. The gaps often sit beyond those existing relationships. Try these questions:
- Who sits behind the organisation we deal with? A retailer buys your product, but its customers use it. A main contractor has subcontractors. A software provider may depend on another company to host its service.
- Where does the impact travel? Look along delivery routes, shared access roads and service connections. For an online service, look at what changes for customers' own systems, equipment and support arrangements.
- Who has no reason to contact us yet? Future users, neighbouring businesses and people affected by a temporary closure may know nothing about the proposal. Silence gives you little information about their views.
- Which external organisation has more than one interest? A council's planning team, highways team and service managers may need different information and make different decisions. Record the relevant contacts and decisions separately.
Check who a representative actually speaks for. IFC recommends testing representatives' views through direct contact with some of the people affected (IFC, 2007, p. 20).
Example: external stakeholders for a new distribution depot
Imagine a retailer opening a distribution depot. The following illustrative example shows how a stakeholder list becomes useful when you connect each group to a decision or action.
| External stakeholder | What matters to them? | What should the project team do? |
|---|---|---|
| Nearby residents | Noise from reversing vehicles, lighting and overnight deliveries. | Discuss the proposed operating hours and access arrangements while changes are still possible. Agree how concerns will be reported. |
| A school on the delivery route | Lorries arriving when children are walking to school. | Check school travel times and assess alternative routes or delivery windows with the haulier and relevant authorities. |
| Electricity network operator | Required capacity, connection works and the date power is needed. | Confirm the connection programme before committing to equipment commissioning and opening dates. |
| Haulage company | Vehicle access, waiting time, driver facilities and realistic schedules. | Test the proposed access and booking arrangements with the people who will operate them. |
| Retail customers | Reliable deliveries while stock moves from the old depot to the new one. | Agree the changeover arrangements, order deadlines and a contact for delivery problems. |
| Local planning authority | The proposal, its impacts and any applicable approval conditions. | Confirm the relevant requirements and track the evidence and decisions needed before each affected stage. |
The school might never appear in a commercial contact list, yet its morning timetable could shape the delivery plan. The electricity connection could determine the opening date. Both deserve attention before the project announces when the first lorry will arrive.
Working with external stakeholders you cannot direct
External organisations have their own priorities, budgets and approval processes. Your urgent request may arrive in the middle of their busiest week. The practical challenge is to agree how the work will cross that organisational boundary.
Agree the decisions and dates on both sides
For a supplier interface, record who provides the specification, who accepts it, when it must be agreed and what happens if it changes. For a customer trial, agree who supplies test data and who confirms the results. Ask each organisation to confirm its commitments before building the rest of your schedule around them.
APM recommends early and continuing consultation to establish requirements and working arrangements, including dependencies between stakeholders (APM, Consult early and often).
Bring conflicting needs into the same discussion
In the depot example, customers may want earlier deliveries while residents want quieter mornings. A joint review of routes, loading arrangements and delivery windows gives the team something concrete to work with. Record the trade-off, who can decide it and which concerns remain unresolved.
Give external contacts a way to get an answer
Name a contact, explain how issues will reach the person who can decide, and agree when a response can be expected. If a concern changes the design or schedule, tell the people who raised it what changed. If it cannot be accommodated, explain the decision.
APM links investment in stakeholder relationships with trust and easier problem solving. A dependable contact and a useful response are practical ways to build that relationship (APM, Relationships are key).
Keep track of promises made outside the business
A sales colleague promises uninterrupted deliveries. A site manager agrees to move a noisy activity. A project manager offers a customer an early demonstration. Unless those promises reach the delivery team, you may have three different versions of the plan.
IFC recommends a commitments register to track promises to external stakeholders, with timescales and responsibility for delivery (IFC, 2007, pp. 104–106). Record:
- Who the commitment was made to and when.
- Exactly what was agreed, including any limits or conditions.
- Who owns the action and when it is due.
- How completion will be confirmed and reported back.
Make the promise specific
For the depot example: “The logistics manager will send the proposed delivery timetable to the school office by 12 June, review any clashes with school travel times, and confirm the agreed arrangements before deliveries begin.”
When to revisit your external stakeholder map
Review the map when a change reaches beyond your organisation. Useful triggers include:
- A new delivery route, site boundary or operating pattern.
- A replacement supplier, subcontractor or external decision maker.
- A launch delay that affects customer commitments.
- A complaint that reveals an impact you had not considered.
- The move from project delivery to everyday operation.
At handover, transfer outstanding external commitments and introduce the new contacts. IFC highlights continuity of commitments as a condition for maintaining credibility when the project team changes (IFC, 2007, p. 146).
Check whether agreed actions are being completed, recurring concerns are being resolved and external dependencies have confirmed dates. Those checks tell you more about the relationship than the number of updates you have sent.
Download a template for mapping external stakeholders
PowerPoint download - External Stakeholder Mapping template
PDF download - External Stakeholder Mapping template
MindMap download - External Stakeholders
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