What’s a stakeholder analysis, and how can it benefit your projects?

You could have the world’s most innovative project concept, but if it fails to connect with the people it affects, your project might suffer from pre-production limbo or an unsuccessful launch.

Understanding what key stakeholders want and expect ensures great ideas take off. Conducting a stakeholder analysis is essential to successfully get your project off the whiteboard and into the real world.

What’s a stakeholder in project management?

In project management, stakeholders are anyone impacted by a project’s execution or deliverables. This typically includes employees, outside entities like clients and suppliers, and a project’s target audience. Even if these people don’t participate in your work’s day-to-day activities, they feel its effect and have skin in the game.

While every stakeholder matters, key stakeholders have more authority over a project’s deliverables and outcomes. By performing stakeholder research, you can identify all stakeholders and determine a plan for appropriately managing every relationship to generate support and buy-in.

Why is stakeholder management important?

No matter where you are in your career, there are people with the capacity to affect and influence your work. These are your stakeholders, and it’s essential to the project planning process to identify, understand, and prioritize their expectations through research and analysis.

By recognizing stakeholders and their needs, you can nurture your relationships through project stakeholder management and communication plans. Putting effort into winning stakeholders over makes it easier to gain backing and access resources your projects need to move forward and succeed.

What’s a stakeholder analysis?

Stakeholder analysis is the first step in the project planning process and is essential to its success. You’ll start by brainstorming with your team to identify key players with influence and power at the outset of your project.

Stakeholders fall into one of two categories:

• Internal stakeholders exist within your organization, like project team members, upper management, and executives.
• External stakeholders exert influence from outside the organization, like clients, investors, and end users.

Your stakeholder analysis must identify and incorporate both types to properly assess their impact on your project.

Once they’re identified, you’ll conduct research to establish primary stakeholder goals, needs, and requirements that’ll direct the project’s deliverables and execution. You can then pinpoint and plan for conflicting stakeholder needs.

Benefits of conducting a stakeholder analysis

Aside from mitigating stakeholder conflicts, learning to identify stakeholders and their motivations offers the following benefits:

• Project definition and support: Stakeholder analysis is an effective project management tool that helps you clearly define your project and improve output quality. You can incorporate valuable insights into goals and deliverables planning by engaging with your stakeholders. And listening to these players’ interests nurtures a vested interest in your project’s outcome, ensuring ongoing buy-in.
• Access to resources: Support from influential stakeholders can make securing project resources like budget, personnel, and time easier, thanks to the buy-in you’ve cultivated.
• Clarified goals: Implementing an effective communication strategy to engage with key stakeholders helps them understand your project goals. They can better identify how your work benefits them, further encouraging their support.
• Predicted responses: Understanding stakeholder motivations helps you anticipate how they’ll react to project development. These insights can save you time and stress, especially if your team runs into challenges, by directing your requests for additional support toward stakeholders who will likely offer help.

How to perform a stakeholder analysis: 3 steps

The purpose of a stakeholder analysis is to help project managers identify, prioritize, and understand stakeholder interests. From that information, you can assess individual levels of influence and consider how to build relationships that benefit the project and its outcomes.

Here’s a simple three-step guide for conducting this analysis.

1. Identify stakeholders

With the leadership team, brainstorm a list of people invested in the success or failure of your project. These stakeholders might include:

• Investors
• Advisors
• Sponsors
• Project managers
• Team members
• Partners
• Suppliers
• Current and future clients
• End users
  

2. Establish priority

Once you have a list of project stakeholders, assess their influence using the stakeholder analysis tool Mendelow’s Matrix.

Sometimes called the Stakeholder Grid, this tool categorizes stakeholders based on power and interest. The matrix is divided into four quadrants, with the X-axis indicating interest and the Y-axis representing power.

Place each stakeholder into the matrix based on how much power they can exert and their interest in your project. Where you place them defines your stakeholder management strategy:

• High power / high interest = Highest priority: You must manage these stakeholders closely. Fully engage with them by soliciting their insights and ensuring they’re informed and happy with the project’s execution.
• High power / low interest = High priority: Keep these stakeholders satisfied with regular updates and status reports, but don’t bore them with too many details.
• Low power / high interest = Mid priority: Check in regularly with this group to inform them of project progress and ensure they have no issues with its execution. These players can become project cheerleaders, playing a supportive role when you need it.
• Low power / low interest = Low priority: Maintain a relationship and monitor these stakeholders’ project opinions through periodic updates, but don’t expend much energy keeping them engaged.
  

3. Foster project specification understanding

Now that you’ve visualized stakeholder prioritization, start thinking strategically about how to earn their trust and support. You need to connect with them to understand their attitude toward your project. One of the best ways to do this is by asking yourself and your team the following questions for each stakeholder:

• Do they have a financial or emotional interest in the project’s outcome? If so, is it positive or negative?
• What’s the prime motivation for their involvement?
• Which project details are relevant to this stakeholder, and what’s the best way to communicate them?
• What’s this stakeholder’s opinion of project work? Is it based on accurate information?
• Is anyone influencing this stakeholder’s opinion? Are they also stakeholders?
• If the stakeholder isn’t supportive of the project, is there any way to win them over?
• If we can’t secure a stakeholder’s buy-in, what steps can we take to manage their opposition?

Once you’ve brainstormed the answers, perhaps asking stakeholders directly for less sensitive questions, create a communication plan that includes an update cadence and the information each person ought to receive.

Common stakeholder analysis mistakes

Stakeholder analysis isn’t a foolproof process, but avoiding the following pitfalls will increase its efficacy:

• Lacking boundaries: You want to keep your stakeholders happy, but sometimes, they exert pressure on your project, leading to scope creep. Reign them in by communicating project plans, establishing firm boundaries, and implementing a change control process.
• Omitting stakeholders: During the identification process, you might miss a cross-functional stakeholder — it happens. When you recognize your mistake, immediately loop them into the project by briefing them with information appropriate to their priority from the stakeholder grid. During future project planning, you can avoid this situation by brainstorming with your whole team and then double-checking with your manager or project sponsor to ensure you’ve included everyone.
• Waiting too long: Conducting your stakeholder analysis after project kick-off can lead to misunderstandings and stakeholder frustration. Treat this mistake as a learning opportunity, moving forward by including this step in your project management practice.

Stakeholder management made easier with Roadmunk

The key to successful stakeholder management is clarity — and Tempo has the project management tools to offer this transparency. Use Roadmunk by Tempo to create dynamic project roadmaps that outline important milestones and due dates. Then, try Timesheets by Tempo to estimate more accurate task timelines based on employee data.