Stakeholder analysis is one of the most important things anyone in the business world can do as they prepare to start any new project. In business, as in life, no one is an island. You may have started your career thinking you’re purely out for yourself. However, as you continue to rise up within your organization and continue taking on more complex projects, you’re likely to find that your work involves greater numbers of people. Some of these people might have significant influence over the work you’re able to do or not do. Others may not have so much influence, but they are obviously impacted by the consequences of your work. All of these people can be considered ‘stakeholders.’ Simply put, they have some sort of stake in the things you do. In this article, we’re going to take a look at what’s called stakeholder analysis, a process that has benefits for any new and complex project you might want to undertake.
STAKEHOLDER MAPPING: WHAT IS IT?
Stakeholder analysis is the first and most important component of stakeholder management. Stakeholder management involves knowing how to engage and communicate with the people who can be supporters or obstacles for the things you do. This is especially important in structures and networks that do not follow simple hierarchies. Managing the expectations, desires, and dissatisfactions of stakeholders is crucial for any new project, and should be started as soon as possible. Why is this important? Stakeholders are part of what shapes your project. Winning their support helps you gather the resources you need. It also helps you anticipate possible roadblocks ahead so your project doesn’t get derailed.
Stakeholder mapping and analysis often begins with a brainstorming session to identify all the different stakeholders involved with a project. You can start by asking yourself: who has the power to influence this project, either by supporting it or obstructing it? Who will be affected by this project? There are many different ways you can categorize the different stakeholders.
INTERNAL VS. EXTERNAL STAKEHOLDERS
A helpful place to begin your stakeholder analysis can be to separate external and internal stakeholders. Internal stakeholders can include team members, other employees, and clients. External stakeholders can include shareholders, regulatory/oversight agencies, contractors, as well as members of the public. Another way to identify external stakeholders is to ask yourself about the different kinds of consequences your project will have (e.g. environmental), as well as what kinds of people will engage with the project. This can include customers, retailers, etc.
But now that you have this big list of stakeholders, what are you supposed to do with it? The next step you’ll want to take is organizing the stakeholders by stakeholder mapping.
Stakeholder mapping and analysis can give you a template for how to engage and communicate with all the different people who have a stake in your project.
The best place to begin stakeholder mapping is by analyzing each stakeholder in terms of their influence over the project, and their interest in it. Influence involves the ability to modify a project’s resources and requirements. Interest refers to people affected by a project’s outcomes, regardless of their ability to change those outcomes. Which stakeholders will have the most influence over the project, either as supporters or obstacles? This list is likely to include the project team as well any sponsors responsible for the project’s resources. Which stakeholders will be most affected? Ask yourself who has a financial, emotional, and health interest in your project. This is likely to include team members as well as members of the public. Once you have analyzed the stakeholders according to their interest and influence, you can place them on your stakeholder map. In the next section, we’ll look at how to create a stakeholder map.
STAKEHOLDER ANALYSIS EXAMPLE
The above image is an example of a stakeholder analysis template. You can use this grid to organize the various stakeholders involved with your project and more efficiently strategize how to engage with them. Notice the x-axis groups stakeholders in ascending order according to their degree of interest in the project. The y-axis groups them according to their degree of influence over the project.
The top left quadrant will contain stakeholders who have a high degree of influence over the project, but not the most interest in its outcomes. You should work to keep these people satisfied—this involves knowing what their goals and motivations are. But you don’t necessarily need to keep them maximally informed. The lower right quadrant, however, involves people with maximum interest but without a great deal of influence over the project. You should work to keep these people informed, even if you don’t have much control. Being informed will help these people be satisfied with a project’s outcomes. The top right quadrant involves people with maximum interest and influence—therefore this group is the most important to keep informed and satisfied. Stakeholders with minimal interest and influence only (the lower left quadrant) only require a minimal amount of communication and attention. Knowing this will help you be more efficient by not over-communicating where it isn’t necessary or helpful.
Business leaders, consulting clients and small business owners are often goal-oriented but can also be myopic. They want to accomplish their goals and want to protect their bottom line. But they don’t realize all the moving parts involved with bringing their goals to fruition. They don’t see all the people who impact and are impacted by whatever projects they undertake. Consultants experienced with stakeholder analysis can use these techniques to help business owners make their projects successful. Consultants can use stakeholder mapping and analysis techniques like the template above to organize their clients’ stakeholders.
For example, imagine you are consulting for a consumer products company and working directly with a product line manager responsible for a new product launch. Your product line manager, his boss, and those that work for him are in the upper right quadrant. You’ll have to manage them very closely. Their jobs and reputations depend on the success of this project. The commercial or sales teams might also be in this quadrant, as would the customers who decide to order the product and the consumers who use it. If we can’t sell the product, the project won’t succeed.
In the lower right, you might have the marketing department. They are an important partner but have less influence on the details of the project. If there are any regulatory hurdles to clear, these would be found here too. In the lower left you’d find the operational or customer service functions of your company. In the upper left you may find the most senior business leaders in the company’s division. They may focus on this new product launch only once a month and are not as interested. But they have a lot of influence and something they say during your review with them can have a huge impact on the project.
The more ambitious your project is, the more people who are going to have a say in its eventual success or failure. Stakeholder analysis anticipates the people who have influence over a project’s outcome. This helps teams develop strategies for making sure their projects are successful. No one who devotes time, energy, money, and passion to something wants it to go off the rails for some reason that could’ve been prevented with a little foresight.