Stakeholder Analysis

Every project has its stakeholders. These are key individuals that have a vested interest in the successful outcome of the project or have key deliverables that make up a broader program. They can come from various backgrounds, such as marketing, engineering, sales and so forth. Regardless of which area of expertise they currently hold, what is paramount from the standpoint of the project manager is that these are the individuals that ultimately will hold tremendous sway and influence pertaining to the project (or program) as a whole. As such, ensuring effective and well structured communication programs are in place to engage with these stakeholders is of paramount importance to the health and welfare of the project as a whole.

Due to the disparate backgrounds that stakeholders are bound to have, it is important for the program manager to be mindful of the different ways to engage with these individuals. With that being said, how can the project manager organize his/her stakeholders and what criteria should be used to identify and categorize these people in a functionally efficient manner?

The Stakeholder Analysis

Within the confines of the business world, the notion of performing an analysis on your stakeholders basically encompasses the idea of organizing your stakeholders by various criteria. Certain stakeholders may have more influence than others and their disparate backgrounds may require different communication styles and mediums. For example, a stakeholder from the marketing department may not be able to digest technical information in the same way that a stakeholder from the engineering community can. And likewise, a customer analysis or a competitor analysis may seem obvious to a product manager, but not for an engineering manager.

As such, in order to begin organizing your stakeholders in an efficient manner, it is important to begin breaking them apart based on certain criteria. To start with, the influence of the stakeholders should be the first demarcation point. An efficient way to start this organizational process is to break stakeholders down as follows:

Primary Stakeholders – These are individuals that are ultimately affected (in either a positive or negative way) by the outcome of the project or program

Secondary Stakeholders – These are individuals that may be indirectly affected (positively or negatively) by the outcome of the project or program

Key Stakeholders – These individuals can be in either of the above groups and also have the most influence or sway pertaining to the project or program

Once the stakeholders are identified and organized, an effective means to ‘map’ these individuals into a more functional matrix is accomplished by using the following grid:

The ‘X’ axis on the grid will signify the interest the stakeholder has for the project or program while the ‘Y’ axis will denote an individual’s influence. Depending on where the stakeholder falls on the grid (and they may overlap into more than one section), the grid map will signify the communication style to leverage for that stakeholder.

So for example, a ‘key stakeholder’ (say for example, a Sr. Director of Engineering) who has a vested interest in the project’s success will have high attributes in both the influence and interest areas. As such, as indicated by the grid, they should be ‘managed closely’. This would involve a high level of engagement with regular feedback provided to that individual so they are kept abreast of the project’s movement. The exercise of mapping all key stakeholders will give the project manager a good summary of how his/her engagement model should function.

Conclusions

There are several benefits for performing a stakeholder analysis, some of which include:

  • Keeping tabs on stakeholder interest in the project
  • Being more mindful of the influence factors for stakeholders
  • Helping to identify potential risks (in cases where stakeholder interest is waning)
  • Having a well organized engagement model
  • Being able to spot ‘negative’ stakeholders

In the end, knowing who has influence on the project and how much interest they have in the project is of paramount importance to the project as a whole. As such, it is something that the project manager needs to be mindful of during the life-cycle of the project as a whole.