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.
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?
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.
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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.
