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.
Stakeholder Analysis
Description
Analysis
Implications
Applications
Examples
1. Identify Stakeholders (IS)
Stakeholder Analysis begins with identifying all individuals, groups, or entities that have an interest or stake in the organization, project, or decision.
– Compile a comprehensive list of stakeholders, both internal and external. – Consider their level of influence, interest, and relevance to the initiative.
– Ensures that all relevant parties are accounted for in the analysis. – Helps prioritize stakeholders based on their significance and impact.
– Identifying stakeholders in a construction project, including investors, local communities, and regulatory bodies. – Listing key stakeholders in a product launch, such as customers, suppliers, and employees.
Stakeholder Identification Example: Identifying government agencies, local communities, and environmental organizations as stakeholders in a sustainable energy project.
2. Stakeholder Mapping (SM)
Stakeholder Mapping involves categorizing stakeholders based on their level of influence and their level of interest or involvement.
– Create a matrix or diagram to place stakeholders in appropriate categories, such as high influence/interest, low influence/interest, etc. – Determine the potential impact of stakeholders on the initiative.
– Provides a visual representation of stakeholder positions, facilitating strategic engagement efforts. – Identifies key stakeholders who require focused communication and relationship management.
– Mapping stakeholders in a public infrastructure project to prioritize engagement strategies. – Categorizing stakeholders in a corporate social responsibility (CSR) initiative based on their relevance and influence.
Stakeholder Mapping Example: Placing regulatory authorities in the “High Influence/High Interest” category for a compliance project.
3. Assess Needs and Expectations (NE)
Assessing Needs and Expectations involves understanding the specific needs, expectations, and interests of each stakeholder group.
– Conduct interviews, surveys, or consultations to gather insights into what each stakeholder group seeks or values in relation to the initiative. – Document their concerns, goals, and expectations.
– Enables the organization to tailor its strategies, actions, and communications to meet stakeholders’ specific requirements. – Supports the development of strategies to address potential conflicts or challenges.
– Collecting feedback from customers to understand their product preferences and expectations. – Conducting consultations with local communities to address their concerns in a development project.
Needs Assessment Example: Gathering feedback from employees about their expectations for a workplace diversity and inclusion program.
4. Analyze Influence and Power (IP)
Analyzing Influence and Power involves evaluating the degree of influence or power that each stakeholder wields over the initiative.
– Assess the resources, authority, and relationships that contribute to a stakeholder’s influence. – Determine the potential impact of a stakeholder’s support or opposition on the success of the initiative.
– Helps identify stakeholders who can significantly affect the outcome and must be engaged effectively. – Supports strategies to build positive relationships with influential stakeholders and mitigate risks associated with powerful opponents.
– Evaluating the influence of industry associations and lobbying groups on policy decisions. – Assessing the power dynamics among project team members and external partners in a collaborative project.
Influence Analysis Example: Recognizing that a major shareholder’s opposition to a merger could significantly impact the deal’s success.
5. Develop Engagement Strategies (ES)
Developing Engagement Strategies involves creating tailored approaches to engage with each stakeholder group effectively.
– Based on stakeholder categorization, design strategies for communication, involvement, and relationship building. – Consider how to address stakeholders’ needs, concerns, and expectations proactively.
– Ensures that stakeholder engagement efforts are targeted and aligned with their specific interests. – Facilitates the development of communication plans, feedback mechanisms, and conflict resolution strategies.
– Creating a communication plan to keep customers informed about product updates and improvements. – Developing a community engagement strategy for a construction project to address local concerns and build support.
Engagement Strategy Example: Implementing a regular newsletter and feedback mechanism to engage with project investors and keep them informed.
6. Continuous Monitoring and Adaptation (MA)
Continuous Monitoring and Adaptation involves ongoing assessment of stakeholder dynamics and adjustments to engagement strategies.
– Regularly review stakeholder relationships, feedback, and changing circumstances. – Adapt engagement strategies based on evolving stakeholder needs and project developments.
– Ensures that stakeholder engagement remains effective and responsive to changing conditions. – Enables proactive identification and mitigation of emerging issues or conflicts.
– Monitoring stakeholder feedback and adjusting sustainability initiatives in response to changing environmental concerns. – Reviewing stakeholder engagement efforts in a political campaign and making adjustments based on shifting public sentiment.
Monitoring Example: Responding to shifts in public opinion by modifying communication strategies to align with stakeholder sentiment.
Table of Contents
Perform a Stakeholder Analysis
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.
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:
Players (high interest/high power) – these are the stakeholders with decision-making power who require consistent collaboration and engagement.
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.
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.
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?
Case Studies
Construction Project:
Stakeholders: In a large construction project, stakeholders include the project owner, architects, engineers, contractors, local residents, environmental agencies, and government authorities.
Analysis: The project owner has high interest and power as they make critical decisions. The local residents have high interest but low power, as their concerns must be addressed but don’t control the project. Environmental agencies and government authorities are context setters with the power to influence project permits and regulations.
Communication Strategy: The project team engages with local residents through regular meetings to address concerns. They collaborate closely with the project owner to align goals and ensure timely decision-making. They maintain open communication with regulatory bodies to comply with environmental and legal requirements.
Product Launch:
Stakeholders: When launching a new product, stakeholders include the product development team, marketing department, sales team, customers, investors, and regulatory agencies.
Analysis: The product development team has high interest and power as they drive product development. Investors have high interest but may not have direct decision-making power. Regulatory agencies have high power but may not be highly interested in the product launch.
Communication Strategy: The product development team collaborates closely with the marketing and sales teams to align strategies and goals. They provide regular updates to investors on the progress of the product launch. Regulatory compliance is ensured through proactive communication and adherence to guidelines.
Healthcare Policy Implementation:
Stakeholders: Implementing a new healthcare policy involves stakeholders such as policymakers, healthcare providers, patients, insurance companies, and advocacy groups.
Analysis: Policymakers have high power and interest as they shape the policy. Healthcare providers, including doctors and hospitals, have high interest and varying levels of power. Patients have high interest but limited power in policy decisions. Insurance companies have high power but may not be highly interested in the policy. Advocacy groups can have varying degrees of both power and interest.
Communication Strategy: Policymakers engage in discussions with healthcare providers to address concerns and ensure successful policy implementation. Patients are informed about changes and involved in decision-making processes when relevant. Insurance companies are consulted to align policy with existing coverage, and advocacy groups are engaged based on their influence.
Nonprofit Organization Fundraising:
Stakeholders: A nonprofit organization conducting a fundraising campaign may have stakeholders such as donors, volunteers, beneficiaries, board members, and the general public.
Analysis: Donors have high interest and power, as their contributions are essential. Volunteers have high interest but limited power in decision-making. Beneficiaries have high interest in the organization’s work. Board members hold significant power and interest. The general public may have varying levels of interest and power.
Communication Strategy: The nonprofit organization maintains open communication with donors, acknowledging their contributions and providing updates on the impact of donations. Volunteers are actively involved in campaign activities and recognized for their efforts. Beneficiaries are informed about how funds will be used to support their needs. Board members are engaged in strategic planning, and the general public is informed about the campaign’s goals and progress.
Software Development Project:
Stakeholders: In a software development project, stakeholders may include project managers, developers, quality assurance teams, clients, end-users, and regulatory authorities.
Analysis: Project managers have high power and interest as they oversee the project. Developers have high interest and power to influence the project’s technical aspects. Clients have high interest and financial power as they fund the project. End-users are highly interested in the final product’s usability. Regulatory authorities have high power but may not be deeply interested in the project’s details.
Communication Strategy: Project managers collaborate closely with developers to ensure project milestones are met. Clients are regularly updated on project progress and budget. End-users may participate in user testing and feedback sessions. Regulatory compliance is maintained through ongoing communication and adherence to standards.
E-commerce Platform Launch:
Stakeholders: When launching an e-commerce platform, stakeholders include product managers, developers, marketing teams, customers, investors, and payment service providers.
Analysis: Product managers have high power and interest in platform features. Developers have high interest and power to shape the platform’s functionality. Marketing teams have high interest in successful platform promotion. Customers are highly interested in user experience. Investors have high financial power. Payment service providers have high power in ensuring secure transactions.
Communication Strategy: Product managers work closely with developers to align platform features with market needs. Marketing teams develop strategies to attract and retain customers, keeping them informed about platform benefits. Investors receive updates on financial performance. Payment service providers collaborate on security measures and compliance.
Merger and Acquisition (M&A) Deal:
Stakeholders: In an M&A deal, stakeholders include executives, legal teams, shareholders, employees, regulatory agencies, and industry analysts.
Analysis: Executives have high power and interest in deal negotiations. Legal teams play a critical role in ensuring legal compliance. Shareholders have high financial interest. Employees are concerned about job security. Regulatory agencies have significant power to approve or block the deal. Industry analysts can influence market perception.
Communication Strategy: Executives lead negotiations and engage with legal teams to address regulatory requirements. Shareholders are informed about the potential impact on their investments. Employees receive transparent communication about the merger’s effects on the workforce. Regulatory agencies are consulted and provided with necessary documentation. Industry analysts are briefed to shape public opinion.
Cybersecurity Incident Response:
Stakeholders: During a cybersecurity incident, stakeholders include IT security teams, executive leadership, legal and compliance departments, customers, law enforcement agencies, and affected third-party vendors.
Analysis: IT security teams have high power and interest in resolving the incident. Executive leadership holds decision-making power. Legal and compliance teams ensure regulatory adherence. Customers may experience disruptions and data breaches. Law enforcement agencies have investigative authority. Third-party vendors may be implicated in the incident.
Communication Strategy: IT security teams lead incident response efforts and collaborate with executive leadership on decision-making. Legal and compliance teams manage regulatory notifications and responses. Customers are informed about the incident, impact, and mitigation measures. Law enforcement agencies are engaged as needed. Third-party vendors are contacted and cooperate in resolving the incident.
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.
Key Highlights
Purpose of Stakeholder Analysis:
Stakeholder analysis is a process to identify key project stakeholders’ participation, interest, and level of influence.
It aims to align project teams with broader organizational goals and resolve potential conflicts before project initiation.
Benefits of Stakeholder Analysis:
Leveraging the support of influential stakeholders, including executives and key personnel.
Aligning project goals with overall company values and strategies for more effective outcomes.
Addressing conflicts or objections from stakeholders before they impact the project.
Stakeholder Analysis Process:
Step 1: Determine Stakeholders: Create an exhaustive list of stakeholders, encompassing various departments and roles.
Step 2: Group and Prioritize Stakeholders: Categorize stakeholders using a power/interest grid:
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
