What is Stakeholder Analysis? Definition, Template, Examples
Managing a successful project requires you to create a project plan, properly estimate project costs, gather all the resources needed, and build a case for the project. However, assembling all these project elements cannot by themselves contribute to a successful project. You need to get stakeholder approval and buy-in.
If your project stakeholders are on board with your project, there is zero chance of a successful launch. Before you can form project decisions with the interests of stakeholders at heart, you have to first understand those stakeholder interests. This is where stakeholder analysis comes into play.
In this article, you will learn how to conduct an effective stakeholder analysis.
Let’s get started.
What is Stakeholder Analysis?
Stakeholder analysis is an efficient and strategic tool that gives room for project stakeholders to communicate effectively with each other irrespective of the power hierarchy. Conducting an efficient stakeholder analysis would prepare you for all the likely scenarios to encounter when in close contact with other project stakeholders.
Assessing the interest of project stakeholders is a key component of stakeholder management. Stakeholder analysis is not biased or aimed at picking sides among project stakeholders but is specifically designed to allow effective communication in dealing with conflict resolution.
The best time to implement stakeholder analysis is during the project preparatory phase to enable you to keep a close eye on the attitudes and reactions of project stakeholders to changes likely to occur. Conduct stakeholder analysis regularly to properly watch and monitor project stakeholders and their behaviors over time.
You can conduct stakeholder analysis through several online templates that help in collating important input, gaining resources, building trust as well as effectively planning.
Why Use Stakeholder Analysis
A stakeholder analysis is useful for a myriad of reasons during the project process. There are so many benefits you get from the proper implementation of stakeholder analysis.
1. Gives Your Project Basic Structure
Proper implementation of stakeholder analysis gives your project the much-needed shape and direction at the starting stage. You get a lot of opinions and insights from important project stakeholders that help guide the project process and overall improve the project quality.
2. Builds Understanding of the Project
Regular and effective communication is one of the key factors under the stakeholder analysis and an essential project management skill every project manager should have.
Adhering to a good project communication plan ultimately builds a perfect working understanding relationship among project stakeholders.
3. Helps Keep You a Step Ahead
Stakeholder analysis gives you a better understanding of your project stakeholders and their likely reactions to certain changes that surface during your project process. Knowing how your project stakeholders will react to changes help you plan to turn their reactions into positives for the project.
How to Conduct a Stakeholder Analysis
Stakeholder analysis varies according to the project team implementing them but the key steps are all similar. When conducting a proper stakeholder analysis, you first identify all your stakeholders, then determine each stakeholder's usefulness and influence on the project process.
Lastly, a good understanding among stakeholders should be developed, especially stakeholders on the top of the influence chain.
1. Identify Your Stakeholders
Properly identifying all the stakeholders likely to be involved with the project process is the first step to take in the conduct of a stakeholder analysis. You need to think deep down on all the likely individuals directly or indirectly affected by the project or who have sought leverage or influence over it.
Individuals who take an interest in the success of the project should also be adequately identified as stakeholders. Your initial stakeholder list should be as broad and detailed as possible, capturing everyone, although the list would be streamlined later on.
Your stakeholders can be both individuals or organizations, but it all leads down to people as they are the ones you get to be in direct communication with. For example, your list of potential stakeholders could include:
- Senior executives
- Alliance partners
- Trade associations
- The press
- Your project team
- Potential lenders
- Interest groups
- Potential customers
- Project analysts
- The public
- Potential recruits
- Your family
- Key contributors
- Key advisors
All these individuals all play various roles no matter how minute at one point or the other during the project process. You need to adequately capture them in your stakeholder list.
2. Prioritize Your Stakeholders
Prioritize your stakeholder list based on each stakeholder's unique influence and likely contribution to the project process. The use of the stakeholder power interest grid is an efficient tool in visually prioritizing all stakeholders based on their level of participation.
You can use the stakeholder power interest grid by allocating different positions to certain individuals based on the actions they are likely to take during the project process.
Here are some of the likely groups of participatory stakeholders on the power/interest grid based on the actions they are likely to perform.
1. High Power & Highly Interested Stakeholders
High power & highly interested stakeholders need to be managed close and uptight as they are the key stakeholders involved in a project process. These groups of individuals often sit at the top of the influence table.
You need to make special efforts to satisfy their interest as they are critical and vital stakeholders. They are often at the top end of the command chain and make a series of important decisions that directly affect the project process. Senior executives in your organization fall under this category of stakeholders.
2. High Power & Less Interested Stakeholders
High power & less interested stakeholders are just slightly below the high power & highly interested stakeholders. You need to also regard them as important stakeholders.
Stringent efforts should be made in satisfying these stakeholders. However, they do not get all the information that the top stakeholders get so as not to bore them. Alliance partners, your co-workers, trade associations, key advisors, and key contributors fall under this category of stakeholders.
3. Low Power & Highly Interested Stakeholders
Low power & highly interested stakeholders have little or no direct influence on the project process but contribute readily to the success of the project process. You need to adequately inform them about the project process as they are directly involved in active project participation.
They offer a supportive role to your project process and are well-informed about the details of the project. Suppliers, lenders, analysts, your project team, your family, and interest groups fall under this category of stakeholders.
4. Low Power & Less Interested Stakeholders
Low power & less interested stakeholders need adequate monitoring but there is a huge restriction on the level of information they have access to as regards the project process. The public, prospective customers, future recruits, and the press fall under this category of stakeholders.
3. Understand Your Key Stakeholders
You need to develop an understanding of each stakeholders' level of commitment to the project process. Understanding your key stakeholders is crucial in ensuring cohesion and the smooth running of the project process.
As a project manager, you need to know their thoughts and feelings towards the project process. One way you can achieve this goal is through regular communication and engagement.
Example of a Stakeholder Analysis
Creating a stakeholder analysis for a project often involves rigorous planning and attention to detail. When conducting a full stakeholder analysis, you need to access some borderline questions and provide answers to them before the implementation of the appropriate stakeholder analysis process.
- Who are the stakeholders to be involved in the project process?
- Is there effective communication among project stakeholders?
- What are the necessary changes needed to get the best out of your project team?
- How can you win over the support of your project team?
- How can you turn and win over the support of your critics?
Providing answers to these basic questions helps in the success of the stakeholder analysis. For example, for a customer relationship management-based software project, the stakeholder analysis would include the proper identification of all project stakeholders.
The project stakeholders would include the chief information officer, change manager, project manager, software developers, training manager, testers, and customers. They all play significant roles in the project process.
Then group the project stakeholders based on their influence on the project into different quadrants and draw out influence lines linking each project stakeholder together.
How to Let Stakeholders Stay in the Loop
Keeping your project team informed and motivated during the project phase is one of the ways the project manager ensures efficient and quality project delivery. To aid you in achieving this, here are some of the efficient ways to keep your project stakeholders satisfied while keeping a close eye on them.
1. Send Satisfaction Surveys
Keeping your project stakeholders in the loop involves sending satisfaction surveys and getting adequate responses from them. Let your project stakeholders know what is happening around the project process. Sending satisfaction surveys helps you keep track of your project stakeholders' behaviors to certain changes.
2. Constant Communication
The easiest and most productive way of keeping stakeholders informed is through effective and clear regular communication. Constant communication on the progress of the project gives a sense of belonging to project stakeholders.
3. Be Consistent and Predictable
You can easily win over your project stakeholders by consistently delivering basic information and updates as regards the project process. This act helps create a sense of understanding and trust among the project team.
4. Sending Regular Status Reports
Dishing out regular and periodic project status reports regarding happenings around the project process is an excellent motivation for your project stakeholders.
Sending out regular status reports gives your project stakeholders a sense of direction on where the project is coming from and headed. This essential project management report enables them to appreciate the impact their effort has had on the project.