Stakeholder Analysis

 

Stakeholder Analysis

Winning Support for your Projects

"Stakeholder management is critical to the success of every project in every organization I have ever worked with. By engaging the right people in the right way in your project, you can make a big difference to its success... and to your career."

– Rachel Thompson, Experienced Project Manager

As you become more successful in your career, the actions you take and the projects you run will affect more and more people. The more people you affect, the more likely it is that your actions will impact people who have power and influence over your projects. These people could be strong supporters of your work – or they could block it.

Stakeholder Management is an important discipline that successful people use to win support from others. It helps them ensure that their projects succeed where others fail.

There are two major elements to Stakeholder Management: Stakeholder Analysis and Stakeholder Planning. Stakeholder Analysis is the technique used to identify the key people who have to be won over. You then use Stakeholder Planning to build the support that helps you succeed.

The benefits of using a stakeholder-based approach are that:

• You can use the opinions of the most powerful stakeholders to shape your projects at an early stage. Not only does this make it more likely that they will support you, their input can also improve the quality of your project.
• Gaining support from powerful stakeholders can help you to win more resources – this makes it more likely that your projects will be successful.
• By communicating with stakeholders early and often, you can ensure that they know what you are doing and fully understand the benefits of your project – this means they can support you actively when necessary.
• You can anticipate what people's reaction to your project may be, and build into your plan the actions that will win people's support.

How to Use the Tool:

The first step in Stakeholder Analysis is to identify who your stakeholders are. The next step is to work out their power, influence and interest, so you know who you should focus on. The final step is to develop a good understanding of the most important stakeholders so that you can work out how to win their support. You record this analysis on a stakeholder map.

After you have used this tool and created a stakeholder map, you can use the stakeholder planning tool to plan how you will communicate with each stakeholder.

The steps of Stakeholder Analysis are explained below:

1. Identifying Your Stakeholders:

The first step in your stakeholder analysis is to brainstorm who your stakeholders are. As part of this, think of all the people who are affected by your work, who have influence or power over it, or have an interest in its successful or unsuccessful conclusion.

The table below shows some of the people who might be stakeholders in your job or in your projects:

Your boss	Shareholders	Government
Senior executives	Alliance partners	Trades associations
Your coworkers	Suppliers	The press
Your team	Lenders	Interest groups
Customers	Analysts	The public
Prospective customers	Future recruits	The community
Your family

Remember that although stakeholders may be both organizations and people, ultimately you can only communicate with individual people. Make sure that you identify the correct individual stakeholders within a stakeholder organization.

2. Prioritize Your Stakeholders:

You may now have a long list of people and organizations that are affected by your work. Some of these may have the power either to block or advance it. Some may be interested in what you are doing, others may not care.

Map out your stakeholders on a Power/Interest Grid on our free template as shown in figure 1, and classify them by their power over your work and by their interest in your work.

  For example, your boss is likely to have high power and influence over your projects and high interest. Your family may have high interest, but are unlikely to have power over it.

Someone's position on the grid shows you the actions you have to take with them:

• High power, interested people: these are the people you must fully engage with, and make the greatest efforts to satisfy.
• High power, less interested people: put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
• Low power, interested people: keep these people adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the detail of your project.
• Low power, less interested people: again, monitor these people, but do not bore them with excessive communication.

3. Understanding your key stakeholders:

You now need to know more about your key stakeholders. You need to know how they are likely to feel about and react to your project. You also need to know how best to engage them in your project and how best to communicate with them.

Key questions that can help you understand your stakeholders are:

• What financial or emotional interest do they have in the outcome of your work? Is it positive or negative?
• What motivates them most of all?
• What information do they want from you?
• How do they want to receive information from you? What is the best way of communicating your message to them?
• What is their current opinion of your work? Is it based on good information?
• Who influences their opinions generally, and who influences their opinion of you? Do some of these influencers therefore become important stakeholders in their own right?
• If they are not likely to be positive, what will win them around to support your project?
• If you don't think you will be able to win them around, how will you manage their opposition?
• Who else might be influenced by their opinions? Do these people become stakeholders in their own right?

A very good way of answering these questions is to talk to your stakeholders directly – people are often quite open about their views, and asking people's opinions is often the first step in building a successful relationship with them.

You can summarize the understanding you have gained on the stakeholder map, so that you can easily see which stakeholders are expected to be blockers or critics, and which stakeholders are likely to be advocates and supporters or your project. A good way of doing this is by color coding: showing advocates and supporters in green, blockers and critics in red, and others who are neutral in orange.

Example:

You can create your own example of stakeholder analysis at work - whether for your current role, a job you want to do or a new project.

Conduct a full stakeholder analysis. Ask yourself whether you are communicating as effectively as you should be with your stakeholders. What actions can you take to get more from your supporters or win over your critics?

Key points:

As the work you do and the projects you run become more important, you will affect more and more people. Some of these people have the power to undermine your projects and your position. Others may be strong supporters of your work.

Stakeholder Management is the process by which you identify your key stakeholders and win their support. Stakeholder Analysis is the first stage of this, where you identify and start to understand your most important stakeholders.

The first stage of this is brainstorm who your stakeholders are. The next step is to prioritize them by power and interest, and to plot this on a Power/Interest Grid. The final stage is to get an understanding of what motivates your stakeholders and how you need to win them around.

 

Stakeholder Analysis (Stakeholder Matrix)

Description:

Stakeholder analysis is an essential part of developing a useful Engagement Plan. A common method of stakeholder analysis is a Stakeholder Matrix. This is where stakeholders are plotted against two variables. These variables might be plotting the level of ‘stake’ in the outcomes of the project against ‘resources’ of the stakeholder. Another is the ‘importance’ of the stakeholder against the ‘influence’ of the stakeholder. The concept is the same, though the emphasis is slightly different.

Objectives:

To provide a clearer understanding of stakeholders and, as a result, provide insights as to how best to engage them.

Outcomes:

Better community engagement plans and project outcomes.

Uses/strengths:

• Use for projects either in the early stages, or with a group developing a stakeholder plan. Not as rigorous or as time consuming as a ‘CLIP’ analysis.

Special considerations/weaknesses:

• All analytical tools are only models. The tool is dependant on subjective data, and will vary according to the person and situation being used. It should probably not be a public document.

Resources required:

• Paper
• Stakeholder Matrix (see above)

Can be used for:

• Engage community
• Develop action plan

Number of people required to help organise:

• Individual

Audience size:

• Large (> 30)
• Medium (10-30)
• Small (<10)

Time required:

• Short (< 6 weeks)

Skill level/support required:

• Medium

Cost:

• Low (< AUD$1,000)

Participation level:

• High (Stakeholders participate in decision)
• Medium (Options noted)
• Low (Information only)

Innovation level:

• Medium (Some new elements)
• Low (Traditional)

Method:

1.    Make a list of all stakeholders.

2.   Write the name of each stakeholder on a post-it note or index card.

3.   Rank the stakeholders on a scale of one to five, according to one of the criteria on the matrix, such as ‘interest in the project outcomes’ or ‘interest in the subject’.

4.   Keeping this ranking for one of the criteria, plot the stakeholders against the other criteria of the matrix. This is where using post-it notes or removable cards are useful.

5.   Ask the following questions:

• Are there any surprises?
• Which stakeholders do we have the most/least contact with?
• Which stakeholders might we have to make special efforts to ensure engagement?

References:

• Department for International Development (1993) Guidance note on how to do stakeholder analysis of aid projects and programmes, UK Department for International Development, London
• Butcher, M (2005) Outside the gates: development processes for the real world, AV Last-First Networks, Armidale

 

What is Stakeholder Analysis?

After review of definition of stakeholders and roles & responsibilities of few stakeholders like Project manager & Sponsor, it is good to deal in detail on Stakeholder Management & Analysis.

Just a recap of definition of project stakeholder:

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion.

Stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. So identification of all stakeholders is an important activity of the project manager to ensure project success.

As all we know, stakeholders can be 1) individuals within the project 2) individuals or departments within the organization & 3) individuals or groups outside the organization (can be influencers)

Stakeholder Management processes for a project involves (but not limited to)

1) Identifying all stakeholders

2) Documenting stakeholders needs

3) Assessing & analyzing stakeholders interest/influence

4) Managing stakeholders expectations

5) Taking actions

6) Reviewing status & repeat

Stakeholder Analysis is an important technique for stakeholder identification & analyzing their needs. It is used to identify all key (primary and secondary) stakeholders who have a vested interest in the issues with which the project is concerned.

The aim of stakeholder analysis process is to develop a strategic view of the human and institutional landscape, and the relationships between the different stakeholders and the issues they care about most.

What are the benefits of Stakeholder Analysis?

A stakeholder analysis can help a project to identify:

• The interests of all stakeholders, who may affect or be affected by the project

• Potential issues that could disrupt the project

• Key people for information distribution during executing phase

• Groups that should be encouraged to participate in different stages of the project

• Communication planning & stakeholder management strategy during project planning phase

• Ways to reduce potential negative impacts & manage negative stakeholders

Engaging stakeholders throughout the project life cycle is a key to (but not a guarantee of) project’s success.

Managing stakeholders expectations & ensuring their active involvement is very much important to project as:

• It is indispensable for continuation of the project & its successful completion

• It gives opportunity to individuals or groups to express their ideas/issues/concerns over the project

• It gives a sense of accountability and enhances responsibility

• It enables effective risk identification & response planning

• It opens up excellent learning opportunity for both the project team and stakeholders