What is A Stakeholder Analysis? Stakeholder Analysis In A Nutshell

A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Understanding a stakeholder analysis

Fundamentally, a stakeholder analysis involves the systematic gathering of qualitative information to determine whose interests should be considered when developing (or implementing) a project, program, or policy.

Considering that stakeholders have a vested interest in a project, maintaining a good relationship with them is crucial to project success. 

To that end, a stakeholder analysis is used to:

  • Leverage the help of key players – this includes executives and other influential stakeholders who have knowledge and experience to impart. 
  • Align stakeholders with project goals and planning – in a 2020 survey, 35% of project teams wished they had a clearer purpose and company strategy. A stakeholder analysis can align project goals with broader company values, resulting in more effective project outcomes.
  • Address conflict or other issues – sometimes, a relevant stakeholder will not see value in a project and will actively attempt to thwart its progress. Conducting a stakeholder analysis before project commencement allows potential objections to be raised and resolved.

Conducting a stakeholder analysis

The exact methodology of a stakeholder analysis will vary depending on the industry and the nature of the project, program, or policy.

However, some steps are universal and they are outlined below:

Step 1 – Determine the stakeholders

Brainstorm a list of stakeholders and be as exhaustive as possible. Stakeholders invariably include marketing, finance, sales, procurement, manufacturing, and executive staff.

Step 2 – Group and prioritize stakeholders

In a stakeholder analysis, prioritization is commonly performed by using a power/interest grid. 

Here, each stakeholder is grouped into one of four categories:

  1. Players (high interest/high power) – these are the stakeholders with decision-making power who require consistent collaboration and engagement.
  2. Subjects (high interest/low power) – through knowledge or experience, these stakeholders offer valuable insights or provide capital. However, they do not have any power to make decisions. Subjects usually include project investors or shareholders.
  3. Context setters (low interest/high power) – or stakeholders that can, at least theoretically, exert a great deal of influence. While they should be updated periodically, they choose not to be involved in the day-to-day minutiae of project management. Government entities and senior executives are often context setters.
  4. Crowd (low interest/low power) – a group of stakeholders requiring some degree of communication but little else. This includes colleagues and co-workers, particularly those in a different department who may be affected by project outcomes but have little role in the project itself.

Step 3 – Communication to gain buy-in

Once each stakeholder has been placed on the grid, a strategy must be devised to garner their continued support.

For a good frame of reference for strategy creation, consider the following questions:

  • How is each category of shareholder motivated? Do they have a financial or emotional investment?
  • What other priorities do they have? How can project priorities be aligned? If alignment is impossible, how can these priorities exist harmoniously?
  • Does the stakeholder hold a positive view of the project? Will their position change as the project progresses? What can be done to improve this view?

Key takeaways:

  • A stakeholder analysis is a means of determining the interest, participation, and influence level of key project stakeholders.
  • A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.
  • Stakeholder analyzes will vary depending on the industry. But at the very least, stakeholders should be categorized according to their level of interest and power. Then, a communication strategy must be devised for each.

Connected Analysis Frameworks

Cynefin Framework

The Cynefin Framework gives context to decision making and problem-solving by providing context and guiding an appropriate response. The five domains of the Cynefin Framework comprise obvious, complicated, complex, chaotic domains and disorder if a domain has not been determined at all.

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

Personal SWOT Analysis

The SWOT analysis is commonly used as a strategic planning tool in business. However, it is also well suited for personal use in addressing a specific goal or problem. A personal SWOT analysis helps individuals identify their strengths, weaknesses, opportunities, and threats.

Pareto Analysis

The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Failure Mode And Effects Analysis

A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Blindspot Analysis

A Blindspot Analysis is a means of unearthing incorrect or outdated assumptions that can harm decision making in an organization. The term “blindspot analysis” was first coined by American economist Michael Porter. Porter argued that in business, outdated ideas or strategies had the potential to stifle modern ideas and prevent them from succeeding. Furthermore, decisions a business thought were made with care caused projects to fail because major factors had not been duly considered.

Comparable Company Analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

SOAR Analysis

A SOAR analysis is a technique that helps businesses at a strategic planning level to: Focus on what they are doing right. Determine which skills could be enhanced. Understand the desires and motivations of their stakeholders.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Pestel Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

DESTEP Analysis

A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

Paired Comparison Analysis

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

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