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Stakeholder Analysis

Stakeholder Analysis

A Stakeholder is any party who may have an interest in an organization’s activity or could be affected by its outcomes. Stakeholders can be any internal or external individuals, groups, departments, business units, or organizations. Examples of stakeholders for an organization are employees, customers, suppliers, competitors, shareholders, financial institutions, government agencies, and the media.

Stakeholder Examples
Examples of stakeholders for an organization

Stakeholder analysis is the process of identifying and analyzing the stakeholders that are likely to affect or be affected by a particular project or other organizational activity. It can be done once in a while or on a regular basis to track the attitudes and behaviors of stakeholders over time. It is often used in project management, in conflict resolution, and in organizational transformation and change management.

Stakeholder analysis is widely used in project management to develop engagement and cooperation between project team and project stakeholders. This will lead to less conflict and more cooperation during the implementation of the project. Stakeholder analysis will help to identify the people who need to be engaged, consulted or informed about the project activities and issues. It will also help to identify other people who could impact or be impacted by the project outcome in a positive or negative way.

Project Stakeholder Examples
Examples of stakeholders for a particular project

The first step of stakeholder analysis is to identify the stakeholders of the project. A project stakeholder is any individual or group who is responsible for any of the project activities or will be affected by the project or its outcome. Start by brainstorming and listing the individuals and groups who may have a stake in the project. Once you have completed the list of stakeholders, you can group them into logical categories such as external stakeholders, process team, etc.

Project Stakeholder Structure
The first step is to identify the stakeholders and group them into logical categories
Power-Interest Characteristics

Next, you need to analyze stakeholders based on their roles and characteristics. Stakeholder analysis involves studying multiple stakeholder characteristics and then analyze their level of involvement. This article focuses on four characteristics of stakeholders which are:

  • The power and influence they hold (determined by their positions).
  • Whether they are aware of the project and its impact.
  • Whether they are interested in the project outcome.
  • Whether they are supportive or resistant to the project or change.
Project Stakeholder Structure
The four characteristics of stakeholders can be summarized in a table

One of the most widely used tools for analyzing stakeholders is the power-interest matrix. It is a four-field matrix that classifies stakeholders into four groups according to the power they hold and whether they are interested in the project or not. There are four groups of stakeholders according to the power-interest matrix, which are: key players, context setters, defenders and crowd.

Power-Interest Matrix
Power-Interest Matrix

Now that you have an idea about the level of involvement each stakeholder has, gaps between the current and the desired involvement levels shall be identified, and actions and communication required to close those gaps shall be implemented. You may use the following involvement planning worksheet to assess where stakeholders are now as well as where they need to be in terms of project involvement.

Involvement Planning Worksheet
Involvement Planning Worksheet

The last step is to create a communication plan to send the right message to the right stakeholder at the right time. The plan should provide information such as the person who is going to communicate with each stakeholder, the key message that needs to be communicated, and the communication method to be used (e.g. informal chat, invite to team meetings, emails, etc.). You may use the following communication action worksheet to plan how to communicate with project stakeholders.

Communication Action Worksheet
Communication Action Worksheet

How to Conduct a Stakeholder Analysis in a Nutshell

  • Invite the project team and key representatives from management.
  • Explain the purpose for conducting the stakeholder analysis.
  • Brainstorm the individuals and groups who may have a stake in the project or change effort.
  • Plot each individual or group on the power-interest matrix. Sort them by the power they have and by their interest in the project or change.
  • Identify the gaps between the current and the desired involvement levels.
  • Create a communication plan to manage ongoing communication with stakeholders.

Example

Consider the below table, then plot the stakeholders on an empty power-interest matrix taking into consideration the four characteristics of stakeholders: power, awareness, interest and support.


A power-interest matrix to represent the ‘power’ and ‘interest’ characteristics

A third dimension to represent the ‘awareness’ characteristic

A fourth dimension to represent the ‘support’ characteristic

There are many tools that can help you to analyze and manage your stakeholders. One of the simplest ways is to use this stakeholder analysis template.

Further Information

Power-Interest Characteristics

Stakeholders often move around the matrix. Some Stakeholders will become more interested as the implementation progresses and they start to see that the changes will affect them. Others may become more powerful through internal promotion or transfer. Because of that, the analysis needs to be carried out regularly throughout the project.


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