Stakeholder Analysis

What are stakeholders?

Stakeholders are an essential part of any project. A project manager’s ability to balance stakeholder requirements, get their buy-in, and understand when and how to involve them is key to successfully fulfilling a project.

A formal definition of a stakeholder is: “individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project completion” (Project Management Institute (PMI®), 1996).

Project stakeholders usually include the project manager, the customer, team members within the performing organization, and the project sponsor.

What is stakeholder analysis?

A stakeholder analysis is a process of identifying these people before the project begins; grouping them according to their levels of participation, interest, and influence in the project; and determining how best to involve and communicate with each of these stakeholder groups throughout.

Importance of stakeholder analysis

1. Helps to identify the key organizational players.

2. Blueprint to all stakeholders on goals & plans.

3. Getting the project into shape.

How to conduct a stakeholder analysis?

There are three steps to follow in stakeholder analysis. First, identify who your stakeholders are. Next, work out their power, influence, and interest, so that you know who you should focus on. Finally, develop a good understanding of the most important stakeholders, so that you know how they are likely to respond, and how you can win their support.

• Identify stakeholders

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.

List of stakeholders

• Group & Priotrize stakeholders

A power grid shows stakeholder interest in the project versus their influence over the project. This four-quadrant tool helps project managers evaluate how to manage their stakeholders. It is used to determine the appropriate level of engagement required by the project team needed to gain the stakeholders’ trust and buy-in.

Fig 1-Power/Interest Grid for Stakeholder Prioritization

The position that you allocate to a stakeholder on the grid shows you the actions you need to take with them:

• High power, highly interested people (Manage Closely): you must fully engage these people, and make the greatest efforts to satisfy them.
• High power, less interested people (Keep Satisfied): put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
• Low power, highly interested people (Keep Informed): adequately inform these people, and talk to them to ensure that no major issues are arising. People in this category can often be very helpful with the detail of your project.
• Low power, less interested people (Monitor): again, monitor these people, but don’t bore them with excessive communication.

Fig 2-Power/Interest Grid for Stakeholder Prioritization

1. Players: These are the high-power, high-interest individuals with whom you will want to collaborate and keep fully engaged.
2. Subjects: These are the low-power, high-interest stakeholders who can offer great insights and ideas for the project but whom you don’t need to always say yes to.
3. Context-setters: These high-power, low-interest stakeholders (heads of departments, for example) can have a lot of influence over the project but don’t want to be involved in the details. Keep them up to date.
4. Crowd: Finally, the low-power, low-interest stakeholders are called the crowd. These individuals will require some ongoing communication about the project’s progress but probably the least of all stakeholders.

• Create a plan of action for communicating with each type of stakeholders

Once you organize and assess your stakeholders, it is time to start making some decisions on whose buy-in is absolutely necessary for success, whose requirements deserve the most attention, and what level of communication each stakeholder will require.

Gaining key stakeholder buy-in is essential to ensuring that your project is not deprioritized or deprived of resources.

Tips for gaining key stakeholder buy-in include:

• Clearly mapping the work of the project to the goals of the stakeholder.
• Describe how the project aligns with the goals of the stakeholder’s department or team.
• Listening to feedback from the stakeholder and finding ways to incorporate their feedback into the project’s charter where appropriate.

Key takeaway

Stakeholder analysis is a technique that can assist the project team members to understand the variety of stakeholders that have an interest in the project and the individual nuances that can affect project risk.