Stakeholder Analysis

 The stakeholder Analysis is the identification and analysis of the parties who have an interest or influence in a project or an initiative. This analysis allows project managers and teams to learn about the expectations of the stakeholders, how they can communicate with the stakeholders and how they can deal with any of the risks and conflicts that might emerge.

                                                                               

Stakeholder analysis is usually entailed with the:

1. Identifying Stakeholders

2. Analyzing Stakeholders

3. Prioritizing Stakeholders

4. Stakeholder Engagement Strategies Development

The following are the details of each step:

1. Identifying Stakeholders

The initial process is to list and determine every potential stakeholder who is affected or affects the project. Stakeholders may contain the following.

Internal stakeholders: team members, project managers, department heads and executives.

External stakeholders include clients, customers, suppliers, regulators, government bodies and the community.

Primary stakeholders: ones that are directly involved or affected by a project (ex. customers, employees).

Secondary stakeholders they are: those who are affected indirectly by the project (e.g., media, competitors).

The Ordinary Stakeholders:

• Project team members

• Senior management/executives

• Customers/clients

• Vendors and suppliers

• Regulatory bodies/government agencies

• Investors and shareholders

• Community groups

• End-users (if different from customers)

2)Analyzing Stakeholders

With the stakeholders identified, what comes next is to discern the needs, interest, influence and impact the stakeholders may have on the project. It can be analyzed with the help of such tools and methods as:

Stakeholder Mapping/Matrix: A pictorial representation that indentifies the stakeholders of interest to a project into four basic categories according to their power (influence) and interest (concern).

Common matrix categories include:

o High Power, High Interest: Key players (e.g., senior executives, major investors).

o High Power, Low Interest: Keep satisfied (e.g., regulatory bodies, certain senior managers).

o Low Power, High Interest: Keep informed (e.g., project team members, customers).

o Low Power, Low Interest Lowly effort (e.g. general public, distant stakeholders).

• SWOT Analysis: Find out the strengths, weaknesses, opportunities and threats of stakeholders with regard to the project.

Interviews and Surveys: To gather first-hand information, one can ask the stakeholders on their concerns, expectations and the levels to which they are supportive.

3. Prioritizing Stakeholders

Majority of the stakeholders will not be equally important or influential to the project. Setting them as a priority is what can guarantee proper attention and resources are allocated to the most important people. Prioritization will be carried out based on:

Power/Influence: The level of influence of the stakeholder over the success or failure of the project.

Interest/Concern: The amount the stakeholder has an interest and concern in the project or outcomes.

Urgency: The degree of urgency of their needs or concerns about the project.

The Power/Interest grid is a typical tool used in prioritization that groups the stakeholders into the following categories:

High Power, High Interest: These are the most critical stakeholders and the careful handling of the same is necessary. They may influence how successful the project is and they are much interested in the outcome.

High Power Low Interest: These stakeholders are required to be satisfied but not followed up everyday.

Low Power and High Interest: These stakeholders are the parties to be informed and can give potentially good feedback, though not in the field of decisions.

Low Power, Low Interest: These stakeholders do not need much attention but, nonetheless, need to be tracked.

4. Building Stakeholder Engagement strategies

Once priorities among the stakeholders are established after prioritizing, the strategies needed to help to communicate with them are developed. The approach to engagement is dependent on the power and interest of the stakeholder in involving the project. The most popular techniques are:

• Informing: Inform stakeholders on the project with the right and clear information in a concise manner and in a precise and relevant way. This is usually made by the use of reports, newsletters, emails or meetings.

• Consulting: Engagement of stakeholders in decision-making by getting the input, feedback, and other concerns of the stakeholders. It can be achieved by the means of surveys, focus groups, or advisory boards.

• Collaborating: Team up with the parties to the case to help in their needs and their concerns. It is particularly so with key stakeholders who have high influence.

• Negotiating: In case of conflicting interests, negotiation possibilities should be promoted as far as possible in order to achieve the mutually agreeable results.

• Expectation Management: This will involve having clear expectations in place and then communicating to the stakeholders on the progress, risks and other changes in the project schedule.

Stakeholder Engagement Plan Example:

Stakeholder Power Interest Strategy Communication Frequency

CEO High High Collaborate Weekly meetings

Customers Low High Keep informed Monthly updates

Regulators High Low Keep satisfied Quarterly reports

Suppliers Medium Medium Consult Bi-monthly meetings

Employees Medium High Inform Weekly team meetings

Let’s say you’re launching a new software product. Your stakeholder analysis might look like this:

1. Identify Stakeholders:

Internal: marketing team, customer support and product team.

External: The customers (early adopters), prospective customers, financiers, the regulators.

2. Analyze Stakeholders:

Clients: Their interest in features and reliability of a product is high and their influence is moderate as they can provide feedback, and make purchasing decisions.

o Product Team: High interest and power due to direct involvement in development.

o Investors: High power (financial support) but lower interest in daily operations.

o Regulatory Bodies: High power to impose regulations but lower interest in the specifics of the product.

3. Prioritize Stakeholders:

o High Power, High Interest: Product team, investors.

o High Power, Low Interest: Regulatory bodies.

o Low Power, High Interest: Clients, marketing team.

o Low Power, Low Interest: General public.

4. Engagement Strategy:

Investors: Quarterly reports and quarterly meetings.

o Clients: Get their involvement by offering surveys, beta tests and launch webinars.

o Regulatory Bodies: Maintain the rules on breaking the laws by setting up periodic legal consultations and reports.

o Product Team: It has regular collaboration, frequent, and agile meetings, and shared project dashboards.

These are benefits of the Stakeholder Analysis:

• Enhanced Communication: You are able to work on communication and interaction to align to the expectation of the stakeholders.

• Risk Mitigation: Prior engagement with the stakeholders to understand their concerns mitigates the possibility of conflicts or misunderstandings.

• Better Decision-Making Process: Having a better and clear picture of who is influential and who is interested will assist in making decisions that in turn will help a project.

• Prioritizing Resources: The approach ensures better resource allocation to prioritize on high-priority stakeholders to increase the chances of success in the project.

Stakeholder analysis is a dynamic process that ought to be reviewed frequently during the lifetime of a project so as to ascertain that all critical stakeholders are effectively incorporated and consulted.