How to Conduct a Stakeholder Analysis

Have you been having a hard time balancing your time and managing the people you work with within your project? If yes, then you will need effective stakeholder management on your side to address that. In this article, we will provide you with these 5 best and proven steps on how to do a Stakeholder analysis that will guarantee your project’s success.

What are stakeholder?

Project stakeholders are individuals, groups or organizations that have an interest or are impacted by a project, either positively or negatively. These stakeholders can be internal to the project organization (e.g., employees, managers, shareholders) or external (e.g., customers, suppliers, regulators, community groups).

Stakeholders can have different levels of influence, interest, and involvement in the project. For example, some stakeholders may have decision-making authority, while others may only be affected by the project outcomes. It's important for project managers to identify and engage with stakeholders throughout the project life cycle to ensure their needs and expectations are understood and addressed. Effective stakeholder management is critical for project success.

What is Stakeholder Management and why it is important?

Without stakeholders, there would be no projects to manage. The stakeholders are all the interested parties in a project - the people who affect and influence the project, as well as those who will be influenced by it.

An unhappy stakeholder can use their influence to derail your entire project and can also provide negative feedback about your performance. On the other hand, a satisfied stakeholder can be your ally and greatest asset in helping you clear your organizational roadblocks and supporting your project whenever possible.

This is why Stakeholder management is a critical component in your project’s delivery and success. Having good stakeholder management makes or breaks the project as it involves techniques on how to make your teamwork WITH you towards the project’s ultimate goals.

Stakeholder management helps you how to effectively engage and maintain good relationships with the people you work with. And because you will be dealing with different types of people with different types of working attitudes, communicating with each one in the right way plays a vital role in keeping them “on board”.

To help you achieve effective stakeholder management, here are these 5 best and proven steps on how to do a stakeholder analysis.

1. Identifying your stakeholders

Before we go into the tips on how to identify our stakeholders, let’s define first what a stakeholder is. A stakeholder is an individual or a group of people who has a direct and indirect impact on your project. These are the people who have either or both interests and influence in your business.

In a project, you are going to have to deal with different people or teams who will help you bring the project into its success (or not). Hence, it is very important that you know who your stakeholders are and tailor an effective communication plan for each one of them.

Here are the questions that you can use on how to identify your stakeholders.

• Who is involved in the project?
• Who is interested in this project or who is affected by it?
• Which process can be influenced?
• Who will potentially benefit from the project or are they in a position to resist change?

List down all of your answers on a piece of paper. You can also conduct a brainstorming activity with your team to effectively identify your project’s stakeholders. Below are just examples of stakeholders for you to consider in this activity.

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• Owner/Client
• Top Management
• Employees
• Marketing Department
• HR Department
• IT Department
• Customers
• Banks
• Government 

2. Identifying the role of your stakeholders

Now that we have completed the first step on how to do a stakeholder analysis, we will now need to determine our stakeholders’ respective roles in our business. This is important as it would allow us to strategize how our communication approach is going to be based on their roles, power, and influence on the project.

 These are the 3 types of stakeholders' roles.

1. Decision Makers - These are the people who most of the time, control the financials of the project, thus, the final say comes from them. They are usually the project sponsors, banks, owners, or CEOs. In small-scale projects, the decision-makers are Managers, supervisors, and team leads.
2. Experts - These are our subject matter experts. They are the ones who know the processes really well and often the ones who interact most with the customers. Thus, their expertise and suggestions are valuable to the success of the project. 

3. Users - They are most of the time, our customers or the main people who will be using our product or services. Their feedback helps improve and quantify the success of our project or business outcome. 

 These are the 3 Tiers of stakeholders:

How close and how far away are these stakeholders?

How much influence do these stakeholders have on our project?

 3. Asses your stakeholders

After identifying our stakeholders and their roles, we will need to assess and categorize them based on their working attitudes. This will be very helpful if you want to create an effective approach on how to keep them engaged with the team’s goals. Get all these templates here: I want these templates

Here are the steps on how to assess and categorize your stakeholders

1. Identify whether they are internal or external stakeholders

Internal Stakeholders - These are the people within our organization; employees and management.

External Stakeholders - These are the people outside our organization; Government, trade associations and other groups,  etc.

2. Identify their relationships with each other. It is important to connect the dots, who reports to whom, who has a direct influence on whom, and who has interest/influence on which processes.

3. Identify your project stakeholders’ attitudes toward the project. How are they receptive to the project plans, are they positive, negative, or neutral? And once we know these, we can then categorize our stakeholders using the following methods:

• Manage closely
• Keep satisfied
• Keep informed
• Monitor with minimum effort

Assess the Stakeholder Power and Influence on your Project:

 4. Identify your stakeholders’ business goals

This time, we will need to identify what our stakeholders want and what their business goals are. Since we will be working with different roles in the project or maybe in the business, we will need to identify what are the expectations, KPIs, and even interests of each of our stakeholders.

By knowing these, we would know the factors that could possibly affect our stakeholders’ decisions and attitudes toward the business. With that, you can also strategize how you can let them engage by utilizing those factors that are valuable to them.

 5. Create a communication plan for each of your stakeholders

As we have already identified our stakeholders, their roles, their categorization, their attitude, and business goals, we will then be able to create an effective communication plan for each of them.

So for example, based on your assessment, your project manager whom you report, is the decision-maker in your project. He is also an internal stakeholder, who has a direct influence and interest in the project as his KPI requires him to make it successful, Thus, you categorized him under “Keep satisfied” considering that his interest is to make the project successful and its success affects his decisions. With that, your communication plan is to schedule a regular meeting with him providing him with status and updates about the project.   

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Another example is your direct reports, these are the people who actually do the job. They are the ones who interact with customers daily, their work results will greatly impact the customers' feedback which will then measure the project’s KPI and success. With that being said, you are putting them into the “Manage closely” category where you would need to schedule meetings regularly and conduct performance assessments and coaching.

This is the reason why it is very important that we correctly categorize our stakeholders using these stakeholder analysis methods as this would help us make sure to exert our effort on the right people. This technique would help you to be more productive by focusing more on those people whom you need to closely manage with and keeping your energy low on those who only require less supervision from you.

Resources:

Stakeholder Templates: Stakeholder template Bundle

Read on the blog: How to communicate with stakeholders

Download  FREE GUIDE  5 DAY NO HUSTLE STAKEHOLDER COMMUNICATION PLAN

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