When you are planning a big project in business, you need to identify anyone who will be involved or affected by the project. This may be used to enlist help in different areas and ways. The process of organizing this list is known as a Stakeholder Analysis.
Anyone who will be affected by or have an effect on a project, decision, activity, or outcome is considered to be a stakeholder. This can be users, customers, project teams and managers, anyone sponsoring a project, people within the organization, or external sellers.
What is Stakeholder Analysis?
Stakeholder analysis identifies the individuals, groups, or organizations that have an impact on, or who can impact a project. It allows these people to be grouped according to their influence, participation, and interest so that you can involve them and communicate for the duration of the project.
What is the purpose of a Stakeholder Analysis?
There are a few reasons that you would run a stakeholder analysis in business. For example, the data can be used to enlist the help of key people in the early stages of a project, such as executives and people who have a lot of company influence. These are people who can help guide things to a successful outcome.
Stakeholder analysis helps you to figure out which groups and individuals you want to involve in a project. You can then schedule meetings for planning and objectives, as well as be sure everyone involved has a clear understanding of what you are aiming to achieve and how they can contribute.
Another reason is to address any issues in the early stages of a project. For example, having someone with influence who decides halfway through a project that they want to direct their resources elsewhere. This person may then derail your project. Doing a stakeholder analysis beforehand can help you identify those who are important to the success of your project, listen to any objections they may have, and work out a way to gain their approval.
What types of projects use a Stakeholder Analysis?
You would use a stakeholder analysis before developing a product or design, in engineering projects, procurement, marketing, sales, customer success, accounting, and finance, to name a few. Any project manager should do a stakeholder analysis before beginning the project. It can be the difference between having people who are enthusiastically supporting your project or those who are looking to block the progress of a project.
How to do a Stakeholder Analysis?
The type of stakeholder analysis exercises you will depend on the industry you are in, the company, and the people or teams who are conducting the projects. There are some basics to consider that will fir for most.
Your first and most important step is to determine who your stakeholders are. You can do this by gathering your project team and making a list of potential people who can help with your project, as well as those who may not. The list can be reduced at a later stage, but for now, you want to make sure you aren’t missing any potential stakeholders. Those who should be included on this list are:
- Executive staff members
- People from finance, marketing, sales, and production
- Those from manufacturing, development, and engineering
- Individuals in procurement
- The heads of any business units that will be affected
- People in operations and IT
Your next step is to prioritize and group these individuals into categories that are determined by their interest, influence, and their levels of project participation. A common way to do this is by using 4 categories of power and interest:
Category 1 – high power and high interest – these people will be the most important of your stakeholders. Keeping them satisfied with the progress of your project should be a top priority.
Category 2 – high power and low interest – you want to keep this group satisfied because of their power within the company. However, if they haven’t shown a high interest, over-communicating with them could put them off the project.
Category 3 – low power and high interest – with this group, you want to regularly keep them up to date and be sure they aren’t hitting any issues with the project.
Category 4 – low power and low interest – with this group, you need to give them periodic updates on the project but not too much information overload.
Another way to group stakeholders is:
Category 1 – Players – these will be your high interest, high power people that you need to keep fully engaged.
Category 2 – Subjects – these individuals fall under the low power and high-interest group and are those who can give invaluable insight and ideas.
Category 3 – Context Setters – these will be your high power and low-interest group, such as department heads. They tend to have a lot of influence regarding the success of the project but don’t want to get involved with all of the details.
Category 4 – Crowd – these are low power and low-interest people.
You have your Stakeholders grouped; now, it’s time to decide how to communicate with them and gain a “buy-in” from them. You need to figure out the best way to earn the support of each group. You can do this by asking questions such as:
- What will motivate this stakeholder group?
- Do they have other priorities that we need to align the project with?
- How likely will each have a positive view of your project and what you can do if they don’t?
From here, you can develop your communication plan. Keep in mind that for any company project to be successful, you will need the guidance, participation, and approval from a wide array of people in the organization. Making sure they agree with and understand the objectives of your project is important; otherwise, they can turn into obstacles.
Stakeholder Analysis Templates & Examples
You can download one of our free templates or samples to give you an idea of what a stakeholder analysis looks like and how you can customize this for your project.
Frequently Asked Questions
The first step is identifying who the stakeholders are. Step 2 is to analyze the stakeholders by running a stakeholder analysis. Step 3 is to make a plan regarding how you communicate with them in order to meet your objectives. Step 4 is to act on those plans while dealing with any resistance early on. Step 5 is to review the progress you have made and then re-engage with stakeholders to progress further.
This refers to the level of involvement an individual has and their impact ability to help bring the project to a successful conclusion, either with planning the project or executing activities.
A shareholder is someone who owns part of a company through stock shares. A stakeholder is someone whose interest is in the company’s performance, not linked to appreciation or performance of stocks. Stakeholders have a bigger need to see a company succeed long-term.