PM#11

A CASE STUDY OF PROJECT AND STAKEHOLDER MANAGEMENT FAILURES: LESSONS LEARNED

Stakeholder theory is a useful framework

for analyzing the behavioral aspects of the

project management process, particularly

the complicated process of project man-

agement within the Department of

Defense (DOD). Projects can be beset by

the agenda of various stakeholders within

the organizational structure. When this

occurs, the implementation of a strong

project stakeholder management strategy

is necessary to increase the likelihood of

success. This is a case study of a failed

DOD project, even though it was fully jus-

tified and badly needed. Stakeholder the-

ory serves as the theoretical underpinning

of this case analysis, which identifies the

potential causes of the project failure.

Project management lessons learned from

the failure and a project stakeholder man-

agement strategy framework are present-

ed to facilitate better decision making on

the part of project managers to increase

the likelihood of successful project man-

agement outcomes.

Keywords: Project management; project stakeholder management; stakeholder theory; decision-making

©2006 by the Project Management Institute

Vol. 37, No. 5, 26-35, ISSN 8756-9728/03

Introduction

P roject management within the United States Department of Defense (DOD)

has been described as the one of the world’s most complicated processes.

Successful completion of a project may require several years and the develop-

ment, implementation, and evaluation of a successful project management strategy.

DOD projects are difficult to manage even under the best of circumstances due to var-

ious structural, behavioral, and environmental complexities. Many of the complexi-

ties stem from the fact that the project manager is likely to be beset by various project

stakeholders from above and below. A thorough canvassing of the literature has dis-

closed that, while research on various project stakeholders has received attention,

there is a lack of research that actually examines the process management process

through the theoretical lens of stakeholder theory (e.g., Bourne & Walker, 2005,

2006), as well a lack of research that has applied both stakeholder theory and the

strategic management process to the project management process (e.g., Ives, 2005;

Jugdev & Muller, 2005; Norrie & Walker, 2004). Therefore, this paper fills a void in

the literature by using stakeholder theory and the strategic management process as the

theoretical lenses through which to analyze the case study of the DOD lighter

amphibian heavy-lift (LAMP-H) project, and to offer a project stakeholder manage-

ment (PSM) strategic framework.

The management of various project stakeholders from above and below the proj-

ect manager can either positively or detrimentally impact large-scale projects within

any organization. The type of impact can be largely influenced by the management of

various project stakeholders as was the case with the DOD LAMP-H project. From

above, senior financial executives are project stakeholders who are constantly seeking

to re-allocate the funds that have been justified by a project manager for his or her

program. From below, functional managers are project stakeholders who are solici-

tous of protecting their vested interests. Functional managers may consider the

authority and latitude for independent action accorded the project manager by sen-

ior DOD management to be an encroachment upon their authority. They are con-

cerned with full compliance, and therefore require the project manager to comply

with each and every regulation pertaining to their separate functional areas.

Oftentimes, this is counter to the project manager’s acquisition-streamlining strategy

and project completion timeline. In many cases, full compliance lengthens a DOD

project’s time to field to 10–15 years, which is an issue that can greatly increase proj-

ect costs and timelines (Griffard, 2002; Office of Inspector General, 2001).

ABSTRACT

J. SCOTT SUTTERFIELD, Florida A&M University

SHAWNTA S. FRIDAY-STROUD, Florida A&M University

SHERYL L. SHIVERS-BLACKWELL, Florida A&M University

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D E C E M B E R 2 0 0 6 P R O J E C T M A N A G E M E N T J O U R N A L 27

This case study of the DOD LAMP-H project is used to

illustrate many of the conceivable stakeholder management

pitfalls that a project manager can encounter if a PSM strat-

egy is not effectively developed, implemented, and evaluat-

ed within the project management process. The format of

this paper will include a brief background on stakeholder

theory and the LAMP-H project. Next, the various LAMP-H

project phases will be analyzed, along with the activities of

the various functional concerns at each phase. This will be

followed by lessons learned from the LAMP-H project.

Lastly, a PSM strategy will be presented to fill a void in the

literature and delineate a strategic framework that can be

used to enhance project managers’ abilities to effectively

manage various project stakeholders earlier in the process.

The proposed PSM strategic framework should also facilitate

project managers’ decision-making capabilities and increase

the likelihood of successful project outcomes.

Stakeholder Theory

A generally accepted definition of a stakeholder is any individ-

ual or group of individuals that are directly or indirectly

impacted by an entity or a task. More specifically, the term

project stakeholder will be used throughout this paper to refer

to any individual or group of individuals that is directly or

indirectly impacted by a project. Stakeholders can be internal

or external to the project team or they can be internal or exter-

nal to the project scope. Therefore, the determination of

whether an individual or a group of individuals is internal or

external to a project is dependent upon the point of view of

the observer. Although there are various perspectives of stake-

holder theory (e.g., social science stakeholder theory, instru-

mental stakeholder theory, and convergent stakeholder

theory), one common denominator of all the perspectives is

that stakeholders perceive that they have stake in the entity or

task. As a result of their perceived stake in the entity or task,

they have certain expectations, and consequently, engage in

certain types of behavior, sometimes constructive and some-

times destructive (Bourne & Walker, 2006).

Within the project management process, various stake-

holders have or perceive that they have various stakes in the

project. Based on their perceived stakes in the project,

stakeholders behave in ways in which they feel will help

them accomplish their project objectives, which may be

congruent on incongruent with the project manager’s proj-

ect mission, vision, and/or objectives. Therefore, it is

incumbent upon the project manager to understand the

objectives of each project stakeholder in order to effective-

ly manage his or her needs and desires. In order to achieve

a successful project outcome, the project manager must be

adept at managing the interests of multiple stakeholders

throughout the entire project management process.

Therefore, it is argued that a strategic PSM framework can

aid project managers in maximizing the potential positive

impact, while minimizing the potential detrimental impact

that project stakeholders can have on the outcome of a

project. Hence, a PSM strategy will be offered after the

analysis of the DOD’s LAMP-H project.

LAMP-H Project Background

The LAMP-H project was initiated by the U.S. Army to

acquire crafts with amphibian (movement over land and

water) and heavy-lifting capabilities. The Army had identi-

fied these requirements as essential for logistic resupply mis-

sions for numerous areas of interest around the world to

support ground troops during amphibious assault missions.

The LAMP-Hs would follow the troops from large carrier

ships to land and provide them with the supplies necessary

to sustain their ground assault. In order to be effective, the

LAMP-Hs would have to meet certain payload and

speed requirements.

Some stakeholders thought that the LAMP-H should be

capable of carrying two M-70 tanks, a payload of approxi-

mately 140 tons, at a relatively low airspeed. Other stake-

holders argued that it should have a lower payload and be

able to fly at a greater airspeed. On a different front, some

stakeholders believed that the LAMP-H should be powered

by paddlewheels that would propel it through the water

until it reached the beach, and thereafter by large deeply

treaded tires over the sand. However, other internal stake-

holders believed that two large Archimedean screws should

power it. They argued that this would suffice for propulsion

over sea or sand. Still other stakeholders argued that the

LAMP-H should be driven with ducted propellers.

Along with all this diversity of opinion from various

project stakeholders, there was also wide disagreement as to

how many LAMP-H units should be purchased and at what

unit price. Finally, the user of the system, the Transportation

School (T-School), wavered on its want or need for the

LAMP-H system. Although the program had floundered

along for about 10 years, it is likely to have survived as a

result of the “seductive appeal of collective belief” (Royer,

2003) by those involved with the project because of their

perceptions regarding the importance and significance of

having LAMP-Hs in the Army’s arsenal.

Early Program Development

The project manager of the LAMP-H project knew that he

had to manage various LAMP-H stakeholders. However, he

was surprised at the great diversity of opinion surrounding

the LAMP-H project, and wondered how any project could

have become so controversial. There was great diversity

among the project stakeholders as to the technical require-

ments and configuration for the LAMP-Hs, the acquisition

strategy for the system, and funding source and cost of the

LAMP-Hs, with the threat of funding cuts being a showstop-

per. Thus, it became immediately evident to the project

manager that in order to support funding for the LAMP-H,

and to put an end to all speculation as to what the LAMP-H

configuration should be and how it would be acquired, a

requirements analysis was needed. Therefore, the project

manager immediately initiated one with an independent

systems analysis organization. Positive results from the

requirements analysis breathed new life into the LAMP-H

project. To grasp the vital importance of the requirements

analysis in defending the budget for the LAMP-H project, it

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is necessary to understand the organizational structure with-

in the DOD, and specifically within the Department of

Army. This can be better understood by viewing the organi-

zational chart in Figure 1.

With this organizational structure, the line of authority

for the watercraft project manager reached through the

Troop Support Command, through the Army Materiel

Command, and to the Department of Army staff. Practically,

this meant that the Army Materiel Command controlled the

funds for all watercraft project managers’ programs and

projects. The project manager used the positive results from

the requirements analysis to build consensus among the var-

ious stakeholders to demonstrate the need for the LAMP-H

project. This consensus building was done by starting with

the highest levels of management within the Department of

Army down to the DOD staff and briefing them on the

results from the requirements analysis. Once the

Department of Army staff had a basis for defending the

LAMP-H project, the Army Materiel Command no longer

cut funds and the project was able to make progress. The

project manager also developed an acquisition strategy con-

sistent with the technical requirements shown to be neces-

sary for the LAMP-H craft, based on the results of the

requirements analysis to further solidify the program.

After reviewing the final results of the requirements

analysis, it became obvious that the initial payload and

speed requirements had to be altered; but the project man-

ager was finally able to identify the cost per unit. This pro-

vided the project manager with enough information to

ensure that adequate funds were appropriated for the acqui-

sition, and to refine the acquisition strategy. The T-School,

one of the stakeholders, became an enthusiastic supporter

of the LAMP-H project when results from the final require-

ments analysis were available. However, because the techni-

cal specifications developed by the Watercraft R&D Center,

another stakeholder, were shown to be technically incorrect,

their support only appeared to be half-hearted.

Nevertheless, the project manager had accomplished a

major feat—the LAMP-H project was established as a viable

project. As it turned out, problems with the LAMP-H project

were only beginning.

Mature Program Development

Shortly after the LAMP-H project was solidified as a viable

project, two very significant changes occurred in the senior

leadership of the project manager’s organization. First, a

senior position called the program executive officer (PEO)

was established and filled by a senior Department of Army

staff member with no acquisition experience. Numerous

PEO positions were established throughout the

Department of Army to provide an executive sponsor for

each program. Figure 2 shows how the new PEO structure

affected the lines of authority in the Department of Army

organizational structure.

After implementation of the new PEO structure, the

project/program managers were taken from under the Troop

Support Command, and placed under the authority of the

new PEO. The PEOs reported directly to the Assistant

Secretary of the Army for Research, Development and

Acquisition (ASARDA). Practically, this meant that the PEOs

were placed in charge of all programs/projects, and that the

Army Materiel Command no longer had any management

Figure 1: Army structure before implementing the PEO

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control of the programs and could no longer take funds

from programs. This was an early attempt to achieve what

Matta and Ashkenas (2003) called “balancing vertical and

horizontal activities.” This combined with a matrix manage-

ment approach provided the capability to achieve rapid

results both vertically and horizontally. This is precisely

what the Department of Army envisioned in reorganizing to

the PEO structure (Kerzner, 2003).

The second change that occurred in the leadership of

the watercraft project manager organization (the home of

the LAMP-H) was the arrival of a new project manager. This

new project manager had also come directly from the DOD

with an excellent acquisition background. He had recently

completed the program management school taught by the

DOD where he had imbibed many new ideas and approach-

es as to how systems should be acquired. One such idea was

that the project manager should be firmly in control of his

programs. He also accepted new approaches regarding con-

current engineering and the need to build prototypes on

production tooling in order to minimize the number of

changes to a system configuration. He had become a

staunch advocate of the Army Streamlined Acquisition

Program (ASAP) approach to systems acquisition, and there-

fore, was an enthusiastic supporter of the LAMP-H

acquisition strategy.

The former project manager had become the deputy

project manager, and also believed in the validity of these

ideas and approaches and was an enthusiastic supporter of

them. This eventually proved to put the new project manag-

er and his deputy in direct conflict with the functional man-

agers and workers that the project managers relied on for

matrix support (Kerzner, 2004; Killian, 1971). It also turned

out to put them at odds with their new boss, the PEO.

Although he ostensibly supported the LAMP-H program, it

was later discovered that he secretly entertained great reser-

vations about it. Due to his lack of knowledge about the

acquisition process, the PEO was very leery of adapting any

new innovations to the acquisition process. Also, the new

PEO preferred to avoid conflict with functional managers

and workers. Consequently, he became very nervous with

the disagreements that the functional managers and workers

had regarding the new approaches taken by the new project

manager and the deputy project manager.

The first indication of the PEO’s true intentions about

the LAMP-H project came when the R&D funds for the

LAMP-H project were cut. In order that the program not suf-

fer a break in activity, it was essential that the R&D funds be

restored. It was well within the power of the PEO to restore

these funds; but he continually delayed in doing so until the

entire acquisition strategy had to be revised and the program

rejustified because of slippage. It later became clear that he

supported the termination of the program due to the com-

plexities associated with an R&D program with two IPRs.

Another factor that delayed the program was the failure

of the T-School to complete the required operational capa-

bility (ROC) document in a timely fashion. In DOD acqui-

sitions, the ROC is an indispensable document (Metzger,

2003). The ROC lends legitimacy to a project by specifying

the exact capability to be acquired. This document had to be

approved before R&D funds could be spent in further proj-

ect development. Although this document should have been

approved years before, it had only been circulated in draft

form and had existed in that form for seven years with

almost no attention, even though the T-School had been

Figure 2: Army structure after implementing the PEO

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point out that it is the responsibility of senior management

to maintain the vision. In the case of the LAMP-H project,

the project manager and the deputy project manager regu-

larly refreshed the project team on the project vision in staff

and team meetings. Thus, momentum was gained and

maintained. This perpetuation of the project’s vision was

vital to the LAMP-H project’s advancing as far as it did. The

strategic management literature suggests that a project mis-

sion to set forth the purpose of the project would also con-

tribute to successful project outcomes (David, 2005). But,

the LAMP-H mission or purpose did not receive the same

type of reinforcement as the project vision.

Kerzner (2003) pointed out that a project is formally

defined by specifying its objectives or requirements in a

requirements analysis. This is the third of the life-cycle phas-

es in normal civilian projects, but it is the second significant

step in the military acquisition cycle, with the first being the

concept phase at which time the project vision and mission

should be developed (Kerzner, 2003; Kimmons, 1990). It is

essential that this step be executed as early as possible in

order to appropriate adequate program funds, and to defend

and sustain the project. If this is not done early, then the

project and its funding are absolutely defenseless and vul-

nerable to the whims of any budgeter who may wish to cut

funds from a project. Also, unless the requirements analysis

is performed early and accurately, it is impossible to proper-

ly appropriate program funds.

In the case of the LAMP-H project, a project mission

was clearly conveyed by the project manager and the

requirements analysis was not initiated until about 10 years

after the need for the craft was first identified, or about 9.5

years later than it should have been. At the time that the

requirements analysis was performed on the LAMP-H, the

program was already in serious trouble and probably would

have been terminated that very year had the requirements

analysis not been undertaken. Thus, the first practical lesson

is that, regardless of the type of organization, a project

vision, mission, and requirements analysis should be devel-

oped and articulated to increase the likelihood of a success-

ful project outcome.

Lesson #2—Project Sponsorship

It is vitally important to the success of a project to have a

project champion or sponsor (Helm & Remington, 2005;

Kerzner, 2003). Although such sponsors are vitally impor-

tant in normal civil and industrial projects, they are

absolutely essential in military projects. In order for projects

to succeed in either the civil or military sector, they must be

supported by a consensus. Because military projects are

influenced by so many stakeholders, including special inter-

est groups, and have involvement from several different

commands (see Figure 2), a great deal of effort must be

devoted to consensus building. Further, the project sponsor

must have the management span, appropriate knowledge,

and organizational authority to harmonize the discordant

voices. This is where the project sponsor in any type of orga-

nizational project can really make the difference between a

repeatedly told that the ROC would have to be approved

before funds could be spent on the LAMP-H program.

Program IPR Approval and Subsequent Development

The IPR period proved to be a very interesting time for the

project manager. Preparations were being made for the IPR

that would authorize release of the request for proposal

(RFP). The RFP invites submission of proposals as to how a

contractor would, if selected, construct a vehicle to satisfy

the LAMP-H requirements. These preparations included

completion of four principal program management docu-

ments: the ROC, previously mentioned; the test and evalua-

tion master plan (TEMP); the integrated logistics support

plan (ILSP); and the acquisition strategy. Although the

TEMP and the ILSP could be taken to the IPR in draft for-

mat, it was necessary that the ROC and the acquisition strat-

egy be approved. In anticipation of the intense level of

activity that would be required to complete the program

management documents and other work in time for the IPR,

a matrix team was formed and a small contract was execut-

ed for preparation of the acquisition strategy, the ILSP, and

some of the program management documents. The TEMP

was to be prepared by the Watercraft R&D Center for coor-

dination with the test and evaluation command (TECOM).

Program Demise

The RFP for the LAMP-H system was to supposed to be

released just after the IPR, which granted approval to proceed

with the development phase. This deadline was not met.

Shortly thereafter, both the project manager and the deputy

project manager moved on to other positions. At the time of

their departure, the RFP had still not been released. They

were replaced by a novice project management team, which

accommodated various stakeholders’ requests, whether or

not their requests were supported by the requirements.

Finally, all of the special interests and expanded require-

ments had been accommodated within the RFP, and it was

released almost 12 months late. Bids from contractors ranged

from U.S. $175 million to $225 million for the R&D portion

of the project, which had only been budgeted and approved

for $50 million. Also, the unit cost of the LAMP-H as bid by

the contractors ranged from $30 million to $43 million,

whereas only $15 million per unit had been budgeted and

approved. The new project manager requested more R&D

funds and to extend the program for an additional year. This

resulted in the withdrawal of the production funds and can-

cellation of the LAMP-H project shortly thereafter. So, after

15 years and the expenditure of many thousands of hours

and dollars, a system badly needed by the military was ter-

minated at a waste of $5 million to U.S. taxpayers.

Project Management Lessons Learned from

the DOD LAMP-H Project

Lesson #1—Project Vision, Mission, and Objectives

Christenson and Walker (2004), as well as Shimizu and Hitt

(2004), purport that the development and articulation of a

project vision are key to successful project outcomes. They

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successful and an unsuccessful project. In this case, it was to

this end that the PEO structure was established in the

Department of Army. The PEO, a senior government execu-

tive, was intended to lend the power and influence of his or

her office to forge the consensus necessary among various

stakeholders to successfully complete a project or program.

He or she can do this effectively only if he or she under-

stands the acquisition process and is not apprehensive

about providing project sponsorship. Unfortunately, this

was not the case with the PEO for Troop Support, who came

from an entirely different background and never understood

the acquisition process. This caused the PEO to be appre-

hensive about forcefully sponsoring the LAMP-H project,

while ignoring the recommendations of the project manager

regarding the LAMP-H project. The PEO’s inability to forge a

stakeholder coalition on the LAMP-H project’s account led to

internal conflict and disharmony among many of the LAMP-

H project stakeholders. In summary, an effective project

sponsor who believes that the project is both viable and nec-

essary is essential to the success of any organizational project.

This sponsor must also be willing to use the authority vested

in him or her to build a coalition of support among the var-

ious project stakeholders (Hosking, 2005). Adequate project

sponsorship is important in relatively simple projects, so it is

even more of a necessity in complex projects, such as defense

acquisition projects (Hosking).

Lesson #3—Project Planning

A third lesson learned was in the area of total project plan-

ning. It has been stated that “… good upfront planning may

reduce the number of changes required” (Kerzner, 2003). A

corollary to this is that effective project execution requires

that the number of subsequent changes be minimized if

effective project planning is done on the frond end. It is

impossible to perform effective project planning unless the

project vision, mission, and all of the project requirements

are taken into account at the beginning of the project

(Christenson & Walker, 2004; Kerzner, 2003). In this case,

no project mission was clearly articulated at the project’s

onset, and the project requirements were changed after

much of the basic project planning was performed. Such

changes in project scope result in an inability to effectively

estimate and control project deliverables and costs

(Kimmons, 1990). The T-School inflated its requirements

after project planning was completed because it enthusiasti-

cally supported this project. However, the inclusion of

inflated requirements invalidated all of the previous plan-

ning. When more funds had to be requested in order to

comply with the inflated requirements, the LAMP-H project

manager lost credibility with the Department of Army,

resulting in program cancellation.

The problem of inflated requirements may be viewed

from a mathematical perspective. Consider a symmetric hyper-

bola of the form x*y = c, and consider only positive values. The

plot of this equation, then, is in the first quadrant. As x

becomes very small, y becomes very large, and the curve

becomes asymptotic to the y axis. On the other hand, as y

becomes very small, x becomes very large and the curve

becomes asymptotic to the x axis. Now, consider a similar

function that describes the relationships among program risk,

program cost, program schedule, and system performance.

Such a function would be written as r = f(c,s,p), where r equals

risk, c equals cost, s equals schedule, and p equals performance.

This equation, because it is four dimensional, would

yield, what mathematicians call, a hyper-surface where risk

could be thought of as surfaces of constant value, analogous

to the constant in the first equation. These surfaces, then,

would be comprised of points such that f(c,s,p) = r = constant.

Any attempt to change one of the variables, say per-

formance, without a corresponding change in the other vari-

ables would move the resulting point to another risk surface.

More specifically, if one attempted to increase the perform-

ance without corresponding increases in cost and schedule

one would move to a new surface corresponding to an

increased level of risk. This is precisely what occurred with

LAMP-H. The performance characteristics of LAMP-H were

arbitrarily increased by the T-School while attempting to

hold the cost and schedule constant. The result was an

increased project scope, and a dramatically increased risk.

Such changes in project scope as those attempted by the T-

School amount to what Kerzner (2003) described as

“unmanaged changes.” He wrote …

Another critical interdependency is the relationship between

change management and risk management. … Risks and

changes go hand in hand, which is one of the reasons compa-

nies usually integrate risk management and change manage-

ment into a singular methodology. … If changes are

unmanaged, then more time and money are needed to perform

risk management, which often takes on the appearance of and

behavior of crisis management (Kerzner, 2003, p. 695).

Kimmons (1990) expressed a similar viewpoint.

Further, the following was stated in the Risk Management

Guide for DOD Acquisitions (2002) regarding the responsibil-

ity for risk management:

The prime contractor’s support and assistance are required,

even though the ultimate responsibility for risk management

lies with the Government project manager.

With such an abrupt change in project scope, the new

project manager attempted to discharge his responsibility to

manage the increased project risk, using the only means at

his disposal, by attempting to increase the budgeted

amounts and the schedule to lower the risk. At this point the

project lost its credibility and was canceled. This is an exam-

ple of strategic flexibility, which is defined as “… an organi-

zation’s capability to identify major changes in the external

environment … to quickly commit resources to new cours-

es of action in response to change …” (Shimizu & Hitt,

2004). The new project manager attempted to strategically

react to these changed circumstances with flexibility by

attempting to obtain additional funds to comply with the

newly inflated requirements introduced by the T-School.

Unfortunately, what he did not grasp was that one group of

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external stakeholders, those from the T-School who wished

to inflate LAMP-H requirements beyond those necessary for

the defined mission, stood in direct conflict with those from

another external stakeholder group, those who had the

authority to reprogram funds. Because of this conflict, the

new program manager was unable to react with the strategic

flexibility demanded by the situation. Regardless of the

organizational project, the project manager must be adept at

project planning and managing multiple project variables

simultaneously throughout the planning and implementa-

tion phases to maximize the chance of keeping the project

within its projected scope.

Lesson #4—Project Specifications

Another area that was extremely detrimental to the LAMP-H

project was that of excessive specifications. It has been

pointed out that a typical document contains twice as many

pages as necessary and stresses quality far too little (Shimizu

& Hitt, 2004). The LAMP-H project was no exception to this.

The testers and the logisticians wanted far more data than

was reasonably required, and were highly incensed when it

was insisted that much of the data requirements and speci-

fications be eliminated in the interest of tailoring the LAMP-

H acquisition to the ASAP approach. Project managers

should be more concerned with the quality of information

contained in the specifications rather than the number of

pages in the document. Quality information is much more

likely to lead to successful project management outcomes

rather than the inclusion of unrealistic information.

Lesson #5—Managerial Conflict Management

Al-Tabtabai, Alex, and Abou-alfotouh (2001) discussed

some of the causes of organizational conflict. One such

cause, according to these authors, is that of managerial con-

flict. Managerial conflict is said to arise from “… differing

practices advocated by respective organizations under differ-

ent managerial units” (Al-Tabtabai et al., 2001). It was this

type of conflict that characterized the conflict experienced

on the LAMP-H project. Although regulatory guidance sup-

ported and encouraged the LAMP-H acquisition strategy, the

functional managers in the Troop Support Command, par-

ticularly (see Figure 2), combined their efforts to undermine

the LAMP-H project. These functional managers were con-

stantly in conflict with the LAMP-H management. The only

way that such conflict could have been averted was through

a strong senior leadership official with the authority and

management span to insist that the LAMP-H acquisition

strategy be followed (Kerzner, 2003).

Research has suggested the use of a cognitive analysis

approach to conflict resolution in mega-projects and

advanced a model for this approach (Al-Tabtabai et al., 2001;

Bender, Cedeno, Cirone, & Klaus, 2000). Although the

LAMP-H project was a fairly large and complex project, as

many defense projects are, cognitive analysis would not have

proven useful in the case of the LAMP-H project and proba-

bly not for other defense projects. The reason is that the

approach assumes that decisions are always made without

the need to satisfy any overarching constraints. This is almost

never the case with decisions for defense projects. Defense

projects are almost always made within the context of over-

arching constraints, which must be satisfied regardless of any

other considerations. Two of the most restrictive ones are

time and cost. Projects must be completed on time and with-

in cost or face termination. While there may be some latitude

in other constraints, exceeding the cost of the project and the

time to complete the project will not be met without a proj-

ect facing termination. The reason for this is that funds for

the completion are programmed several years ahead of proj-

ect execution, and any serious deviations from programmed

amounts require permission from Congress.

In the case of the LAMP-H project, the inflated

requirements advocated by the T-School would have eas-

ily doubled and perhaps tripled the cost of the project.

These inflated requirements would have also destroyed

the schedule for executing the project. Further, the per-

sonnel conflicts did not impact how the LAMP-H project

would be executed within existing constraints, as stipu-

lated by the acquisition strategy and the operational

requirements document (ORD). The conflicts had to do

with the acquisition strategy and the ORD themselves,

and only culminated near the milestone decision point

for the project. Thus, when the conflicts became really

intense, there was not sufficient time to react and salvage

the project.

The only approach that would have worked would

have been to prompt an early action by the PEO to

resolve what conflict he could, within project constraints,

and to demand compliance where no resolution was pos-

sible. Sadly, the PEO was deficient in his responsibilities

and did neither. He never really asserted the necessary

authority upon other organizations to ensure compli-

ance. Thus, the intra-organizational conflict continued

throughout the life of the project. In order to be effective

and achieve successful project outcomes, project man-

agers must become skilled at managing and resolving

conflict between various project stakeholders while keep-

ing the project on time and within budget.

Lesson #6—Resistance to Change

The LAMP-H project stands as a monument to the fact that

functional personnel who supported the LAMP-H project

were unwilling to accept new ways and approaches to doing

business, even though those approaches were sanctioned by

the Department of Army and were essential to making the

project a success. The functional personnel were opposed to

tailored specifications, tailored acquisition strategies, con-

current engineering, total quality management, robust

designs, and best value awards (DSMC, 1989; Willoughby,

1986). This LAMP-H project showed beyond question that

functional personnel, in the absence of a forceful, senior

management official as a project sponsor, would resist

change and undermine even the best-managed program.

Project managers should help educate project stakeholders

in new approaches to reduce their resistance to change.

D E C E M B E R 2 0 0 6 P R O J E C T M A N A G E M E N T J O U R N A L 33

Project Stakeholder Management (PSM) Strategy Framework

By not effectively identifying and managing the hidden and

oftentimes conflicting agendas of project stakeholders early

in the project management process, many projects are

doomed to experience costly failures like those experienced

with the LAMP-H project. We offer the project stakeholder

management (PSM) strategy framework to aid project man-

agers in managing project stakeholders and their various

agendas. This proposed strategic framework intertwines

stakeholder theory and the strategic management process.

There are nine steps to the continuous and dynamic

strategic PSM framework (see Figure 3), which is an adapted

version of the strategic management process delineated in

David (2005). Step 1 requires the project manager to identi-

fy and articulate the project vision and mission. Step 2

requires the project manager to conduct a project SWOT

(strengths, weaknesses, opportunities, and threats) analysis.

Within the SWOT analysis, the project manager needs to

identify the internal strengths and weaknesses of the project

team. Internal strengths and weaknesses are factors that the

project manager or team can control (David). The project

manager also needs to identify the external opportunities

and threats that face the project team. Opportunities and

threats are factors that are external to the team and outside of

its control (David).

Step 3 is where the project manager identifies all project

stakeholders and their goals and stake in the project. In step 4,

the project manager determines his or her selection criteria and

identifies alternative strategies or plans of action for managing

each project stakeholder and his or her goals. Step 5 is where

the project manager selects the project stakeholder manage-

ment strategies that he or she will employ to aid the project

stakeholders in achieving his or her goals while the project

manager is able to attain his or her project goals. Step 6 requires

the project manager to acquire and allocate the resources he or

she needs to implement the selected PSM strategies. Step 7 is

the actual implementation of the selected PSM strategies. Step 8

requires the project manager to evaluate the implemented PSM

strategies, and to make corrective changes in the implemented

PSM strategies where necessary.

9. Seek &

Incorporate Continuous Feedback

1. Identify Project

Vision & Mission

2. Conduct

Project SWOT Analysis

3. Identify

Stakeholders & Their Goals

4. Identify

Selection Criteria & Alternative

Strategies5. Select PSM Strategy for Each Project Stakeholder

6. Acquire & Allocate

Resources

7. Implement Selected

PSM Strategies

8. Evaluate

Implemented PSM

Strategies

Project Stakeholder Management Strategy

Framework

Figure 3: Project stakehoder management strategy framework

D E C E M B E R 2 0 0 6 P R O J E C T M A N A G E M E N T J O U R N A L34

The ninth and final step requires the project manager to

elicit feedback from the various project stakeholders on a

regular basis. Given that change is a constant, it is important

for project managers to not only elicit project stakeholder

feedback on a continuous basis, but to also process the feed-

back and incorporate it into the strategic PSM process. The

use of this strategic PSM framework will enable project man-

agers to assess each project, each project stakeholder, and

the situational factors to minimize the potential conflicts

with the various project stakeholders while capitalizing on

the strengths of the project team and the opportunities pre-

sented by the various project stakeholders. Project managers

should remember that there is no one best PSM strategy.

Rather, the best PSM strategy is dependent upon the contex-

tual, behavioral, and structural variables of each project

(Bourne & Walker, 2006).

Conclusion

This paper fills a void in the project management literature

by merging stakeholder theory and the strategic manage-

ment process to provide a comprehensive project stakehold-

er management strategy framework for aiding project

managers to manage simultaneously the interests of multi-

ple project stakeholders. Many projects fail because the proj-

ect manager is unable to effectively manage the sometimes

hidden and conflicting agendas of the various project stake-

holders (Bourne & Walker, 2005). The DOD LAMP-H proj-

ect provides an excellent opportunity to illustrate how a

project can fail and be terminated due to the ineffective

management of various project stakeholders. The analysis of

this project also provides us with a golden opportunity to

identify valuable project management lessons. The lessons

learned from this case study can be used to help project

managers enhance their likelihood of successfully managing

a project. Effective communication skills are indispensable

skills for a project manager to possess. With the use of the

PSM strategy framework and the use of effective communi-

cation skills, project managers will be more likely to recon-

cile stakeholder conflicts earlier in the process so as to

minimize the chance of project failure.

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J. SCOTT SUTTERFIELD received a PhD in engineering management from the University of Missouri-Rolla and is currently

an assistant professor of production operations management in the School of Business and Industry, Florida A&M

University. He has also done post-doctoral work in engineering management and is a registered professional engineer in

the State of Missouri (E-13883). He has also been listed in “Who’s Who Among American Teachers,” and “Who’s Who in

Science and Engineering.”

SHAWNTA S. FRIDAY-STROUD is a professor of management at Florida A&M University’s School of Business and Industry.

She earned a PhD in business administration/management from Florida International University. She was featured in the

2 January 2003 issue of Black Issues in Higher Education as a “Standout Scholar.” She has scholarly publications and

consulting experience with public, private, and civic organizations in the areas of strategic planning, mentoring, leadership

development, conflict management, and diversity training. In addition to her refereed publications, she has self-published

two books, Take A.C.T.I.O.N.® and Cultivate Your S.P.I.R.I.T® , which offer professionals and individuals a simple holistic

process for accomplishing more of their personal and professional goals in less time with less effort and stress. She has

been reappointed by the governor of the State of Florida as a consumer member of the Florida Board of Respiratory Care,

where she serves as the Board’s budget liaison.

SHERYL L. SHIVERS-BLACKWELL received a PhD from Purdue University in organizational behavior and human resources

management. She is an associate professor of management at Florida A&M University’s School of Business and Industry.

She teaches in the areas of negotiations, organizational behavior, organizational management, human resources

management theory, and personnel management. She is published in Organizational Behavior and Human Decision

Processes, Journal of Leadership and Organizational Studies, and Journal of Management Development. Her professional

and consulting experiences include Subaru-Isuzu Corporation, Sunbeam, Eli Lilly, Merck & Co, Inc., and the Florida

Department of Transportation.