How do you measure the impact of individual members of the team, investors, customers, or even regulatory agencies on a project's success or failure? Projects often include Stakeholder Analysis to evaluate and prioritize participants and key players based on their influence, attitudes, interest, and potential risk. Use the Stakeholder Analysis framework to identify threats, opportunities, and ultimately create better end products.
Big undertakings often have many stakeholders that either directly or indirectly contribute to the outcome. As these considerations frequently steer projects in different directions, stakeholder analysis is a useful and often indispensable part of project management.
Unlike many number-driven analyses that businesses tend to conduct, stakeholder analysis also takes qualitative components, such as emotions and attitudes, into consideration. Stakeholder responsibilities are determined beyond just the immediate, day-to-day business functions. With a mid to long-term outlook in mind, stakeholder analysis tries to envision the potential impact, positive or negative, that particular stakeholders could have over project outcomes and even beyond.
The stakeholder analysis process first identifies the key stakeholders involved across a project. These are the main participants in the project, the main parties interested in the project, and individuals who might be affected by it, with or without active involvement. These individuals or entities are then classified as internal vs external stakeholders.
After the stakeholders have been identified, connect the dots and place them in the context of your general project blueprint. Which part of the project process will each of them be involved in or affected by? How will they connect or disconnect from one another throughout that process?
Then, evaluate and analyze. This includes how stakeholders play into project specifics and business objectives and expectations.
Lastly, decide the future measures to implement based on the risks, threats and opportunities discovered from your analysis. Perform any analysis on the possible consequences, then measure whether or not to make changes to them. (Slide 3)
Type of stakeholders
Internal stakeholders are members within the organization. They can be C-level executives, leadership team, employees, etc. The right side of this slide lists some common examples for each type of stakeholder. When developing your project, feel free to also replace them with actual names of individuals or organizations.
Connected stakeholders are individuals that hold an economic or contractual relationship to the organization. These could be ongoing business relationships, strategic partners, shareholders, suppliers and distributors, lenders and financiers, or retailers.
As opposed to internal stakeholders, external stakeholders are those who aren't directly involved with the organization, but their preferences and reactions to the organization's business decisions and trajectory can sometimes be very influential. On a macro level, this could be the government, as it has the capability to pass rules and regulations that directly affect the company, advocacy groups to promote or denounce the company, media organizations and how they portray the company, or social communities that are locally or internationally engaged.
Customers could be external stakeholders. For example, maybe the end goal of a project is to lower the cost of a core product. Although the clients are not actively involved in pricing strategies or development, they will be the first in line to be affected. Let's say the price decrease made customers happier and feel more inclined to shell out their money, that would increase your sales and revenues. and the company could reach better profitability in the end. (Slide 5)
The stakeholder matrix helps managers figure out whose needs should be more heavily weighted as decisions are made and project tasks get implemented. With so many stakeholders involved, it's hard to appease everyone, so use this matrix to make decisions that are most beneficial to the most influential stakeholders.
The criteria to be measured are stakeholder influence or power (on the y-axis) and stakeholder interest (on the x-axis). While your company might prioritize other criteria not listed here, these are two of the most common bar for assessments.
When the interest and influence of a stakeholder group are both low, these stakeholders should be considered the least. Simply monitor them until their interest level increases.
If the stakeholder's interest level is low, but their power is high, try to meet their needs and engage them to increase their interest. This might be high net worth investors or a group/individual with the potential to create new partnerships and business opportunities. Even if they aren't participating in your organization, if you deliver bad results to them, they could still have an impact, so manage carefully.
If a stakeholder's interest is high, but their influence is low, show them enough consideration and inform them of any upcoming announcements. You can also make use of their interest through their involvement in low-risk areas. These stakeholders could be great supporters with game-changing feedback later down the line.
If a stakeholder's interest and influence are both high, these are the most important players to your operation and they should definitely be focused on. You need to actively manage, appease, communicate with them regularly, and ask for their advice throughout the decision-making process. (Slide 8)
In addition to stakeholders' power and influence, their general attitudes and sentiments are important to monitor as well. Map out each stakeholder's attitudes with this slide. On the right, common stakeholder players associated with the project are listed with arrow icons to visualize which players are supportive and advocating, which are neutral and indifferent to the subject, and which are critical of your process. This emotional assessment can also present potential risks that certain stakeholders may try to block a project's progress because they don't like its direction or question the results. (Slide 11)
Stakeholder analysis table
Lastly, organize and record your stakeholder landscape and list the key players in a category. In this example, stakeholders are separated by relationship: contractual stakeholders and regulatory stakeholders.
Here, you can track each stakeholder with a brief description of their objective for their involvement, their level of power and influence as well as their level of risk.
As far as risk levels go, stakeholders with higher risk levels are more likely jeopardize a project's success or failure. They could also be more prone to take actions that could hurt your end goals. (Slide 15)