Project Management Tools: Stakeholder Analysis
What is Stakeholder Analysis?
A stakeholder is someone who could impact or be impacted by your project or business activity. Stakeholder analysis is the process of determining the potential extent of that impact.
The ultimate purpose of stakeholder analysis is to increase the likelihood of your project’s success. It does so by providing you with a view of the political, corporate and customer landscape through which the project needs to navigate.
Understanding where potential roadblocks are will allow you to better negotiate with the stakeholders who have placed them there or give you the opportunity to avoid them in the first place.
Through this process you will obtain knowledge that will form the foundation for your communication and engagement planning and relationship management activities which follow.
The diagram below illustrates the inter-relationship between these components within the wider communication framework.
Basic Elements of Stakeholder Analysis
There are two key questions your analysis is designed to answer:
- WHO are your stakeholders; and
- WHAT is their position is in relation to the project?
Let’s look at how you will go about discovering the answers.
Who are your Stakeholders?
Step 1 - Identify your Objectives and Outputs
Before you begin the analytical work you need to be very clear about what your project objectives and outputs are. These will form the benchmark against which you will assess a stakeholder’s relative position.
A project has objectives, outputs and outcomes. You may also hear these referred to as goals or targets, products or deliverables and benefits or value-adds. The three aspects are distinct:
- An objective is what your project intends to achieve e.g. reduce paperwork in the office.
- An output is what the project will produce or deliver e.g. online application system.
- An outcome is what the business expects to realise from the output e.g. increased efficiency and lower costs.
Another way of looking at these is:
What you need to achieve
How you will achieve it
Why you're doing it
The analysis assesses the link between stakeholders and the first two of these items. To put it another way, who is affected by the project itself, who is affected by the things it will deliver and how are they affected?
When stakeholder analysis is first performed however, a project will usually only have access to its objectives. That is because the analytical work will normally be done during a project's set up phase so as to support the communication plan that is documented at that time.
It would be rare for your outputs to also have been identified in those early days. Therefore for larger or complex projects, you will likely need to repeat some of the analysis once that information comes to hand.
Step 2 - Choose your Dimensions
The second step is to identify everyone who could impact your ability to deliver or who may themselves be impacted by the objectives or outputs.
You will need a spreadsheet or similar for this part of the analysis. The spreadsheet will be used to store the information you gather about your project stakeholders.
In the spreadsheet each characteristic of the stakeholder's profile will have its own column. You will use the information to develop a communication plan. Let that guide you about what dimensions to include or exclude.
Including the following dimensions will at least allow you to undertake the stakeholder mapping exercise at step 4:
- Direct - indirect, primary - secondary, internal - external, key. The categories indicate the nature of a stakeholder's connection with the project.
- As required. Assign your own group identities for stakeholders with similar requirements to make a large list easier to work with.
- High - medium - low or strong - medium - weak. What level of interest does a stakeholder have in what you are doing?
Attitude / support
- Positive - negative - neutral. Are these people advocates, latents or oppositional in relation to the project?
Power / influence
- High - medium - low or strong - medium - weak. How much power or influence does a stakeholder have over the project's ability to deliver?
Just something to be aware of - as you put together a communication (engagement) plan, you must also have some knowledge about your stakeholders' needs and motivation. That is, why do they have a particular level of interest in the project or that attitude.
Only then will you be able to form an appropriate and responsive strategy to manage the relationship. You can collect those details now or in a separate session after you've completed the mapping exercise.
One Brain or Many
Brainstorming is a method for the spontaneous generation of ideas.
In brainstorming sessions, judgment and criticism is withheld and out of the box ideas are encouraged.
The initial focus of the sessions is on the volume of ideas.
The quality is inserted later when the ideas are critiqued and refined.
Step 3 - Identify your Stakeholders
Although you may be more than capable of identifying the stakeholders yourself, it is not recommended you rely on this technique alone for any formally established project.
Brainstorming workshops or meetings are the more usual method.
The two main benefits of utilising a cooperative tool like brainstorming with others is that it creates the opportunity to obtain more robust information.
It also provides a good indication to those people about how you intend to conduct your project i.e. collaboratively.
What is their Position in Relation to the Project?
Step 4 - Map your Stakeholders
Once you have listed your stakeholders and have some understanding of how they're connected with the project it’s time to complete the other details - interest / attitude / influence.
For this part of the exercise you can work through your spreadsheet line by line filling in the information as you go. An oft used alternative is to map the stakeholders on a grid.
There are a few variations in terms of what dimensions sit on each axis of the grid. In the more common examples, power or influence will sit on one axis and along the other, interest or impact. In some versions symbols are used to represent the attitude of the stakeholder.
Example Stakeholder Analysis Grid
Plot the stakeholders along the axes. If you have lots of stakeholders you will need a very large space to accommodate them on the grid. Alternatively, you could do a partial mapping of some of your list, use ID letters instead of the stakeholder's full name or you may have to rely on your spreadsheet alone.
When the mapping exercise is complete you will be left with a visual guide about how you need to apportion your engagement effort for the project.
Stakeholders with a medium-high level of power and interest in your project. These are the stakeholders you will need to focus most of your engagement activity as their support or opposition will have the greatest impact on your ability to deliver.
Stakeholders with a medium-high degree of power and low-medium interest. Keep these stakeholders informed and satisfied with your progress and direction. Increase your engagement if you need their support for something specific but don’t overwhelm them with too much information.
Ensure these people are adequately informed and have the opportunity to participate in conversations about the project.
These people have low-medium power and interest. Provide this group with information but don’t tax their already limited interest.
Example Stakeholder Analysis Spreadsheet
Fruit product exporters
Olive oil producers
Fruit product exporters
Stakeholder analysis is the process of gathering information about people who could affect or be affected by the project or its deliverables.
The information is used to develop a communication plan as part of an overall communication strategy.
The ultimate purpose of this work is to increase the project's chance of successfully achieving its objectives.
WHO are your stakeholders?
Step 1 - Identify your objectives and outputs
Step 2 - Choose your dimensions
Step 3 - Identify your stakeholders
WHAT is their role in relation to the project?
Step 4 - Map your stakeholders
- Stakeholder grid
As a result of this analytical work you will have gained insights into who you need to build relationships with. You will also understand the role those people will play in either supporting and enabling your project to reach it's goals or impeding it.
That knowledge will help you to prepare and plan how best to engage with your stakeholders to optimise your chances of a successful delivery.
When undertaken as outlined above, the analysis also serves to bring your team up to speed quickly with the project's stakeholders.
Often, the discussions that occur during the brainstorming and mapping exercises will draw out information that may not make it into a report but is just as valuable in building a picture of your stakeholder groups.
This analysis and wider communication activities attest to how much importance you place on the human and social impact arising from your project.
Your credibility rides both on your ability to deliver and how well you manage the expectations and needs of your stakeholders.
A supported project creates more relevant, higher quality outputs that are better able to produce the desired benefits. People and the way you treat them matters. This is your first chance to show your intent in that regard.
© 2014 LWhip