Identifying Stakeholders: Understanding Their Role in Product Management

“Success in management requires learning as fast as the world is changing.” – Warren Bennis

Introduction:

Who exactly are stakeholders, and why do they matter so much in product management?

It’s easy to think of stakeholders as just the customers or investors, but the truth is, the network of individuals who impact a product is much broader.

They are the lifeblood of any project, contributing to its direction and supporting its development.

Product managers need to understand the needs and expectations of all stakeholders to prioritize features, navigate challenges, and keep everyone on board.

So, how do you identify and engage with this wide array of contributors effectively?

Let's break it down and discover how managing stakeholders can lead to smoother workflows, clearer goals, and better product outcomes.

Defining Stakeholders

When we talk about stakeholders, we're talking about the people who are affected by or have an interest in a product’s success. Think of stakeholders as a diverse group of individuals, each with their own stakes in the outcome of the project.

In the world of product management, stakeholders can range from your technical team, who bring the product to life, to customers who rely on the product to meet their needs, and even the investors who want to see financial returns.

Identifying these stakeholders is the first step in making sure that a product not only gets built but thrives.

Stakeholders are individuals or groups with an interest in the product's success, including users, team members, and investors.

The term "stakeholder" is broad for a reason. It encompasses anyone who is affected by the product, both directly and indirectly. When thinking about your product, ask yourself: who cares about this product being successful?

For instance, end-users care because they want a tool that solves their problems. Team members—developers, designers, and marketers—care because they’re putting their skills into building and launching the product. And investors? They care about the product generating revenue and achieving market success.

As a product manager, it's your job to balance all of these perspectives. Think of stakeholders as passengers on a bus, with each one wanting to go in a slightly different direction. You need to drive the bus toward the ultimate goal while ensuring the passengers are engaged and satisfied with the journey.

Different stakeholders have varying needs and expectations, influencing product decisions.

One of the trickiest parts of product management is that no two stakeholders have the same expectations. What might seem critical to one group might be less important to another.

Take users, for example: they might be primarily concerned with how easy the product is to use. On the other hand, the development team might be focused on technical feasibility, while investors might prioritize the product’s profitability or marketability.

Understanding these varying needs can feel like spinning plates, but it’s crucial. If you focus solely on one group—say, you prioritize investor returns without considering user experience—you risk alienating the people who will ultimately decide your product's success. Conversely, focusing only on user features without keeping costs in check can cause investors to lose confidence.

That’s why understanding these diverse needs early on is essential. It allows you to create a product strategy that takes into account the most critical inputs from each group. Prioritizing decisions based on a holistic view of stakeholder needs helps you create a product that balances short-term functionality with long-term viability.

Understanding stakeholders helps product managers prioritize features and communicate effectively.

When you know who your stakeholders are and what they care about, you can make smarter, more strategic decisions. Feature prioritization is a classic example.

Let's say your customers are asking for a new feature that will make the product easier to use, but your technical team says it would take months to develop. Meanwhile, your investors are pushing for new features that can drive immediate sales. Who do you listen to?

This is where having a clear understanding of your stakeholders comes into play. Instead of trying to please everyone at once (which is impossible), you can prioritize based on what’s best for the product’s long-term health. Maybe you implement a smaller, more feasible version of the user-requested feature while rolling out a marketing campaign to satisfy investors.

But it’s not just about making decisions—it’s about communicating them. The way you present a decision to each stakeholder group will vary. Your technical team might need details about how a feature aligns with the product's architecture, while investors care more about how the feature will affect the bottom line. Knowing how to tailor your communication to each audience keeps everyone in the loop and helps build a sense of trust and collaboration.

Types of Stakeholders

Identifying your stakeholders is one thing—understanding their roles is another. Broadly speaking, stakeholders fall into two categories: internal and external. Both are vital to the success of a product, but their concerns and contributions differ greatly.

Internal stakeholders are the people inside your organization, such as the teams responsible for developing, marketing, and managing the product.

External stakeholders include customers, suppliers, and anyone outside your company who is affected by the product.

Internal stakeholders include team members, management, and executives involved in product development.

Internal stakeholders are your co-creators. They’re the ones in the trenches, helping you bring your vision to life. The development team, for example, focuses on building and maintaining the technical aspects of the product, while your marketing team ensures that the product reaches its target audience.

Management and executives, on the other hand, are often more concerned with the strategic and financial outcomes, wanting to ensure that the product aligns with the company’s overall goals.

As a product manager, you’ll be working with internal stakeholders on a daily basis. Keeping them aligned is crucial to making sure the product moves forward smoothly.

A disconnect between, say, the development and marketing teams could lead to delays, missed opportunities, or even a flawed product. That’s why regular communication, goal-setting, and alignment are key to ensuring everyone is rowing in the same direction.

External stakeholders include customers, suppliers, regulators, and community members affected by the product.

Now let’s talk about the external stakeholders. These are the people who aren’t directly involved in creating the product but are still significantly impacted by it.

Customers are the most obvious external stakeholders—they use your product and, through their feedback, help shape its future. But they’re not the only ones.

Suppliers play a critical role in providing the resources needed to develop your product, while regulators ensure your product complies with industry standards and legal requirements.

Understanding your external stakeholders is just as important as managing your internal team. If you fail to engage with customers, you risk creating a product that doesn’t meet their needs. If you ignore regulators, you could find yourself facing legal issues that could delay or even halt the product’s release. By maintaining open lines of communication with these groups, you can anticipate challenges and opportunities before they become roadblocks.

Engaging with stakeholders through regular communication fosters collaboration and support.

Engagement is key when it comes to stakeholders—both internal and external. A product manager needs to act as a bridge, connecting these diverse groups and ensuring that everyone’s voice is heard. Regular check-ins, feedback loops, and transparent communication help foster collaboration, keeping all stakeholders engaged and supportive of the product’s success.

For internal stakeholders, regular updates on the product’s progress keep everyone aligned and motivated. For external stakeholders, clear communication about upcoming features or changes helps manage expectations and builds trust. Ultimately, fostering these relationships will not only make the development process smoother but will also increase the likelihood of product success.

Managing Stakeholder Expectations

Managing stakeholder expectations is one of the trickiest but most critical aspects of being a product manager. When you have different groups of people—customers, team members, executives—each with their own desires and concerns, it can be challenging to keep everyone happy.

But here's the good news: it’s not about pleasing everyone all the time. It’s about ensuring that all stakeholders feel heard, informed, and aligned with the product vision. Doing this effectively can make the difference between a product that soars and one that struggles to get off the ground.

Clearly communicate product goals and updates to keep stakeholders informed.

Imagine being on a road trip with friends, but no one’s quite sure where you’re headed. You can imagine the confusion, right? The same thing happens when stakeholders aren’t on the same page about your product goals. As a product manager, it's essential to have a clear vision of where the product is going and to share that vision regularly. Whether it’s through formal presentations, team meetings, or casual updates, keeping your stakeholders informed builds trust and prevents misunderstandings.

For internal stakeholders, this means regular updates on product milestones, key decisions, and timelines. A quick email summarizing progress or an all-hands meeting with the development team can go a long way in keeping everyone aligned.

For external stakeholders, like customers or investors, a detailed roadmap outlining where the product is headed can help manage expectations about what’s coming next. Just as importantly, regular updates provide transparency, giving stakeholders the assurance that they’re in the loop.

Of course, the way you communicate matters. While your technical team might appreciate detailed discussions on functionality, your executives might prefer high-level overviews focusing on impact and timelines. Tailoring your communication style to fit the needs of each group ensures that everyone understands the product’s direction and why certain decisions are being made.

Actively solicit feedback from stakeholders to ensure their needs are being addressed.

One of the most effective ways to manage expectations is by actively seeking input from your stakeholders. It’s a common mistake to think that just because stakeholders aren’t voicing concerns, they’re fully satisfied. Instead of waiting for feedback to come to you, go out and ask for it. This not only helps you catch potential issues early but also reassures stakeholders that their opinions matter.

For internal teams, regular feedback sessions—whether through sprint reviews, retrospectives, or informal chats—can uncover challenges or ideas that may have been overlooked. Your development team might raise technical constraints, while your marketing team could suggest improvements based on customer feedback. By creating a culture of open dialogue, you can foster a sense of ownership and collaboration among your internal stakeholders.

External stakeholders also value opportunities to provide feedback. Whether it's through customer surveys, usability tests, or investor check-ins, actively engaging these groups in the product development process can help ensure that their needs are being met. Customers, for instance, can offer invaluable insights into how the product is being used and where improvements could be made.

Investors, on the other hand, can provide strategic advice on market trends or funding concerns. By encouraging feedback, you’re not just managing expectations—you’re creating a product that better serves its audience.

Balance conflicting stakeholder interests to maintain a cohesive product vision.

Here’s where things get tricky. No matter how well you communicate or how much feedback you collect, conflicting stakeholder interests will arise. The marketing team wants to prioritize a feature that will drive immediate sales, while the development team is focused on long-term scalability. Customers are asking for enhancements that align with their needs, but the investors are looking for ways to reduce costs. How do you balance it all?

The first step is to recognize that not all stakeholder opinions carry the same weight at every stage of the product’s life cycle. During the early stages, for instance, feedback from the development team might take precedence as you work to ensure technical feasibility. Later on, customer feedback might be the most important factor in shaping the user experience. By understanding the role each stakeholder plays, you can better assess when and how to incorporate their input.

It’s also important to keep the product’s overall vision in mind. When managing conflicting interests, remind yourself and your stakeholders of the product’s long-term goals. This vision acts as your north star, guiding decisions and helping to justify trade-offs.

If a requested feature doesn’t align with the core product strategy, it may need to be postponed or declined. By explaining these decisions clearly and showing how they fit within the larger vision, you can maintain stakeholder support even when tough choices are made.

At the end of the day, product management is all about balancing needs while staying true to the product’s purpose. Stakeholders will always have competing interests, but with clear communication, active feedback collection, and a strong product vision, you can manage these challenges effectively and create a product that serves everyone’s interests.

Conclusion:

Understanding and managing stakeholders is fundamental to successful product management. By identifying who your stakeholders are, you can prioritize their needs, communicate effectively, and steer your product toward success.

Internal and external stakeholders each bring unique perspectives that shape the development process, and it’s your job as a product manager to ensure these voices are heard and balanced.

Stakeholder management doesn’t just help you build better products—it builds stronger relationships with the people who have a vested interest in your success.

And when these relationships are nurtured through clear communication, active feedback, and thoughtful prioritization, you create a foundation of trust that will support your product and your team in the long run.

This article is part of the Becoming a Product Manager Guide.