As a project manager, you must prioritize working with people and leading them to success. The most common way is to perform stakeholder management activities.
Stakeholder analysis is a critical part of these activities. But if you have never done it, you may find the term rather intimidating, and it may sound stressful. So, what is stakeholder analysis anyway?
Stakeholder analysis is a process of identifying the impact a person or organization has on your project. You then analyze them by looking at their interest, participation, and expectations. As the outcome of stakeholder analysis, you determine how to best manage their engagement.
This article will look at stakeholder analysis in all details. Additionally, you can get my Stakeholder Management Plan template. It will help you make your stakeholder management efficient.
Stakeholder Management Plan and Stakeholder Register Templates
Ad-hoc stakeholder management doesn’t work. You need to plan stakeholder engagement in a strategic way. Otherwise, your project may fail.
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What Is Stakeholder Analysis?
First, you identify possible parties, organizations, and people that can affect your project. Then, you perform stakeholder analysis by looking at their possible reaction and attitude to your project. Finally, you decide how to work and engage with them to help contribute to the success of your project.
Stakeholder analysis is part of project management. It refers to a series of processes where you:
- Identify the people, parties, or organizations that may influence your project. You call them stakeholders.
- Analyze them.
- Capture all relevant information in the stakeholder register.
- Decide how you will engage and work with them to ensure your project is successful.
When analyzing, you will look into their motivation and expectations for your project. You will also think about their possible reactions.
If they enjoy your project, you should get positive results. You may assume the same when you reverse the situation.
Once you have analyzed these stakeholders, you can decide how to engage and work with them. The key is to try to get them to contribute to your project in the best way.
Some stakeholders may negatively affect your project. With these stakeholders, your best plan is to determine how to negate their influence. You can at least try to mitigate the possible damage if you cannot avoid it.
Here’s an insight from the real world! Essentially, a stakeholder equals requirements. They may have requirements for the product you create, your project management approach, and to processes and tools they control.
But in the real world, you cannot address all the needs of all stakeholders. So, stakeholder analysis helps you identify the most important people and organizations. In the long run, you prioritize their requirements above others.
Can Stakeholder Analysis Help With Project Management?
Stakeholder analysis helps a project manager in many ways:
- It aids a project manager in identifying key players in the project
- It helps the project to launch with a suitable set of objectives and goals.
- It helps a project manager to identify potential conflicts and manage them.
Let me explain it in more details:
Stakeholder Analysis Helps You To Identify Key Players
If you perform stakeholder analysis, you can see players that affect your project. You can also see if they will affect your project positively or negatively.
However, in many cases, most of these stakeholders are unimportant. Most of them may not influence your project much.
The Pareto Principle still applies in stakeholder analysis. 20% of the stakeholders are responsible for 80% of the results and problems of your project.
Once you have identified these key players, you can further decide how to work with them.
It Helps You To Get A Good Start
Performing stakeholder analysis allows you to get a good start on your project. If you can launch your project well, you increase the chance of your project being successful.
This is because you see the key players when you perform the stakeholder analysis. These key players have immense ability and influence on the project (read: requirements!).
You can then involve these key players in the early stages of the project planning. You can incorporate their desires and expectations into the project’s objectives and goals.
This should help to enlist their agreement, support, and energy throughout the project. When problems arise, you can be confident that these key players can help you. This is because helping you means completing the project they support in the first place.
Even if they do not help you, chances are they would not be the ones creating problems. This is because their expectations, desires, and wants are aligned with the project. This means creating problems would not help them achieve their objectives.
Helps You To Identify Potential Conflicts Early
You can use stakeholder analysis to identify potential conflicts early.
Conflicts can occur in many ways throughout a project. It could be that your project will negatively affect some parties or people. This means their reaction will be to make it harder for you to complete your project.
Sometimes, stakeholders may have clashing requirements and expectations. They may influence the project to pressure you to do things that suit them.
By performing stakeholder analysis, you can identify such potential conflicts early. Then you can think about how to manage them. You can try to mediate and arbitrate between the stakeholders.
For example, you need to find the middle ground that suits two parties. You can organize a meeting. In the meeting, explain to them expectations of both parties, Then, try to work out a solution that benefits everyone.
How Do You Perform Stakeholder Analysis?
To perform stakeholder analysis:
- Start by building a stakeholder register and selecting an approach.
- Stakeholder register will dictate the analysis you need to perform.
- Fill in the details with descriptive language.
- When performing stakeholder analysis, focus on being empathic.
The cornerstone of all stakeholder analysis is the stakeholder register. A stakeholder register details all the names of the following:
- people, or
that you believe will be able to influence your project.
Once you have completed your stakeholder register, you can perform a stakeholder analysis.
Step 1: Collect information
The first step in stakeholder analysis is to collect the required information. Generally, the details you can use to add to your stakeholder analysis are:
|Name||Full name if possiblePronunciation guide if neededFull name and acronym if it is an organization|
|Department||Department your stakeholder belongs toTheir role in the department|
|Their email and any other contacts you may have.|
|Location||Add in if the stakeholder is in a different city or country|
|Role On Project||Describe in the best way you canProject documentation may detail the role better.|
|Communication Preference||Email is the default|
Check if the stakeholder prefers a face-to-face meeting or phone calls
|Authority||How much authority does this stakeholder have over your project?Organization leaders, investors may have a lot of power.|
|Impact||The larger the impact, the more easily this stakeholder can move your project forwardOrganization leaders, investors, shareholders, and regulators usually have a large impact.Expressed on a scale of 1-10|
|Impact Description||Describe how can the stakeholder impact your project|
|Interest||The more the stakeholders may benefit or lose out from your project, the higher their interest is usually.|
|Involvement||How much time and effort is the stakeholder willing to invest in your project.It can be expressed as ‘full-time,’ ‘weekends,’ ‘4 hours a week’, etc.Note down why the stakeholder has such an involvement level.|
|Expectation||What does the stakeholder want to achieve by working with your project?|
|Engagement Strategy||How do you plan to communicate, engage and interact with this stakeholder?|
Full Name: You should be able to get the stakeholder’s full name from the email signature. Their LinkedIn profile may have information too. If the stakeholder is an organization, their details should be available on a website.
Department: Here, list down the stakeholder’s position. The email signature should have the information. You can also ask directly if necessary. If the stakeholder is an organization, consider adding the full name and acronym.
Location: Under this information, add the location where the stakeholder is based. Again, the email signature should be able to leave clues. This detail may be much more important if the stakeholder is based in a city that runs in a different time zone.
Role On The Project: This detail is different from the department. Here, write down the stakeholder’s role in your project, not the official title. This may not be clear-cut. This means you should make judgments based on your interaction with the stakeholder.
Preferred Method Of Communication: This is about how the stakeholder likes communicating. Do not mistake this with how you like to communicate. Start with email, explore, and see which works best with the stakeholder.
Authority: How ‘powerful’ is this stakeholder dictating your project’s decisions and progress? Note it down here. Authority usually comes from the job title, expert knowledge, and reputation.
Impact: Impact considers the stakeholder’s ability to drive the project ahead positively. Organizational leaders, funding providers, and regulators have a greater impact.
Interest: Involvement is how eager the stakeholder is to work on your project. Typically, the more affected the stakeholder is, the higher the interest level.
Involvement: How much effort is the stakeholder willing to contribute to your project? Often, involvement level may not correlate with their interest, expectations, and impact.
Expectations: This looks at what the stakeholder looks to achieve with your project. A common approach to this detail is to use the acronym WIIFM (What’s in it for me?)
Engagement Strategy: Here, you detail how you intend to get stakeholders to do what you want them to do. If the stakeholder is important, you may need to dedicate more time and effort to them.
Suppose you are keen to explore these details in further detail. In that case, we further explain these details and aspects in another article:
Step 2: Decide How Detailed You Want It To Be
When working on stakeholder analysis, choose between simple, advanced, and full types.
Adjust your stakeholder analysis type with the scale of the project. You also want to tally the stakeholder analysis type with the number of resources you have. The larger the project, the closer you should be to performing a full stakeholder analysis.
Role (on the project)
Step 3: Fill In The Details
Decided on the type of stakeholder analysis you want to perform? Understand the details? You can finally start the work.
First, create a spreadsheet. Key in the names of the stakeholders on the rows and the details on the columns. Then, begin writing based on your thoughts and understanding of the stakeholder.
The key here is to use descriptive rather than prescriptive notes. This means you want to write narratively and in sentences. This helps you to better describe the stakeholder’s sentiments, thoughts, and expectations.
Avoid using general descriptors such as ‘medium,’ ‘high,’ ‘low,’ or similar when possible. This vague way to explore a stakeholder may cause your work to lack depth and not help much in the future.
Step 4: Select The Top 10 And Go Further In
When you are done, you may have a long list of stakeholders. You would have performed some analysis on them too.
However, you may notice that only a small number of these stakeholders matter. Few actually have outsized impact and importance to your project.
This is rather normal. The Pareto Principle (80/20 rule) also applies to stakeholder analysis. 20% of your stakeholders may be responsible for 80% of the success and problems in your project.
This means you should focus on these important stakeholders. Spend time and dive deep into their sentiments for your project.
As a start, pick the top 10 most important stakeholders for your project and relook at your analysis. Think a little further and see if you can add newer things inside.
Insider Tips To Crush Stakeholder Analysis
Some tips to help you perform stakeholder analysis better include:
- Know when to stop.
- Keep the analysis descriptive, not prescriptive.
- Practice more empathy.
- Think from the stakeholder’s position.
- Use the Salience model when choosing the most important stakeholders for further analysis.
Know When To Stop
If you made it as a project manager, chances are you are good at analyzing and understanding things. However, there is such a thing called analysis paralysis. This means you need to be careful about this when performing stakeholder analysis.
You may try too hard to collect information. You may try too hard to understand a stakeholder’s position and sentiments.
You kept thinking, and you did not know when to stop. This may mean you will never be able to truly engage the stakeholder.
You must arrive at a point where you feel ok with the stakeholder and stop analyzing. Get on the ground, work with them instead, and push your project forward.
Keep The Analysis Descriptive, Not Prescriptive
Project managers may forget that the stakeholders are humans, not machines. Each stakeholder has personality, thoughts, and sentiments.
This means you want to be descriptive about them and not just use prescriptive labels such as ‘high,’ ‘low,’ and so on.
One way to achieve this is to write descriptive narratives about the stakeholder. For example, instead of writing ‘high’ in involvement, you can instead write:
“Steve’s career is on the line here, as Mark will take over if mess up his role in this project. He should be very interested in working hard and being involved with this project.”
One key skill you need to have to perform stakeholder analysis well is to have the ability to be emphatic. Empathy means placing yourself at another person’s viewpoint when looking at a situation.
If you can do this, your stakeholder analysis will be much better. This is because you can quite accurately see things from their perspective.
Applying the WIIFM (What’s In It For Me?) is the tip. This forces you to switch hats and think from the stakeholder’s position instead.
Do Not Forget The Salience Model
Choosing your top 10 stakeholders can be confusing as they may be important to you.
However, the 80/20 rule still applies in stakeholder analysis. You should pick out the most important stakeholders and work with them closely.
You can use the Salience Model to pick out these important stakeholders. The Salience Model can help you to see how vocal, visible, and important a stakeholder is. The three major areas you can use to decide on the stakeholder’s importance include:
Legitimacy: How much right does a stakeholder have in making requests on the project?
Power: How much ability does the stakeholder have in driving the project’s outcome? How much influence does the stakeholder have to drive your actions as a project manager?
Urgency: How much immediate attention do they demand from you, and how fast do you need to react to their needs?
Using the salience model, you can create a typology of stakeholders. Then you can look at each objectively and decide on the most important stakeholders.
Stakeholder analysis is a process to help you understand your stakeholders. You then develop strategies to work with them, making your project successful.
You can do this by listing the stakeholders. You then analyze their possible objectives, sentiments, and interest in your project.
When performing stakeholder analysis, apply empathy, and think from multiple positions and angles. You should also know when to stop. Then apply the Salience Model to further refine your stakeholder analysis.