Stakeholder analysis made simple
Important terms and concepts in stakeholder analysis
Stakeholders can be employees, customers, partners, associations, shareholders or government. This list could go on and on as each project will have different stakeholders and one of the things that needs to be done is stakeholder identification. This involves identifying the individual stakeholders that are important to the project.
The stakeholder analysis can then be carried out. The analysis involves structuring, deciding, analysing, prioritising, assessing and evaluating. This is particularly important if there are a large number of stakeholders with different interests and opportunities for influence, as the analysis will lead to different treatment of the stakeholders. It should be carried out as early as possible in order to prioritise stakeholders by influence and identify methods for dealing with obstacles and resistance. It can also identify stakeholders with positive attitudes who can support the project and make it a success. This provides a good basis for stakeholder communication.
A stakeholder matrix, also known as stakeholder mapping, can be used to visualise stakeholders. Stakeholders are positioned in a diagram according to their interests and influence. But how do you get there?
The process of stakeholder analysis
The first step is to identify the people who have an interest in and influence on a project, and who therefore are the stakeholders. This is the first step in stakeholder management.
As mentioned above, there are internal and external stakeholders. Internal stakeholders are those who are directly involved in the project. They may be team members, managers or even clients who have an interest in a safe workplace or a successful project. External stakeholders are those who are only indirectly involved. These could be customers who are interested in the product and have a certain price expectation, or suppliers who hope to receive regular orders.
To identify them, you cannot only ask who might be affected internally or externally, but also simply look at the long list of those who supply, buy or finance.
Stakeholders may have an interest not only in the success of the project, but also in its failure. They may be indirect stakeholders, such as competitors who want to get their product to market first, possibly by undercutting the price.
A stakeholder analysis is important in order to know in which direction the interests lie.
From identification to analysis
The aim is to capture their influence and attitudes towards the project, and to understand their motivations and goals. This can be done by distributing questionnaires to stakeholders or through interviews. Both can cover the project process, objectives, milestones and possible criticisms. Brainstorming or brainwriting is also a good way to find out what each stakeholder's vision is for the product.
Stakeholders are classified into two categories:
- Influence: Is this high or low?
- Interest: Do they want the project to succeed, fail or are they neutral?
If a stakeholder does not work in the sector or has no knowledge or experience, how high can their interest or influence be? If changes are made or things are planned differently than the stakeholders would like, how would they react? If their ideas have not been taken into account, will this have a negative impact or will it be accepted?
Based on the analysis, the stakeholder matrix is created. There are two axes representing interest and influence, giving a total of 4 quadrants:
2. Low influence and high interest: These stakeholders should not be lost sight of, as they can often be crucial for small details.
3. High influence and low interest: They should be satisfied because they have a great influence on the project. However, as they are not really interested, it is important to find the right balance in communication so as not to bore them.
4. High influence and interest: They need to be fully involved and well informed as they have both great influence and great interest in the project.
From analysis to stakeholder communication
Once the stakeholders have been properly analysed, the communication with them can be determined. If the right communication is chosen, their influence and interest can be used to bring the project to a successful conclusion. The more important the stakeholder, the more often you should communicate with them. There are several ways of doing this.
1. Low influence and interest: These stakeholders can be kept informed through newsletters that are sent out once a quarter, for example. As they have little influence and interest, it is not necessary to contact them regularly.
2. Low influence and high interest: These can also be informed by a newsletter, but not just once a quarter, but whenever an important milestone is reached. Because of their high level of interest, regular communication is also important.
3. High influence and low interest: Since they have a lot of influence on the project and should be kept informed, you can invite them to meetings or inform them by phone. However, as their interest is low, the frequency is not very high and should be based on their wishes.
4. High influence and interest: As both influence and interest are high, it is important to communicate regularly with these stakeholders. They can be invited to Sprint Review Meetings or feedback rounds. Communication can also take place generally during a Sprint or during a specific phase.
However, the frequency and choice of communication tools will also depend on stakeholder preferences. For example, stakeholders in the same quadrant may be contacted at different frequencies.
In addition to the communication tools already mentioned, presentations and the project website can also be used to inform stakeholders. Events to which stakeholders are invited can also be included.
Common challenges and approaches to solutions
Subjectivisation: It can happen that too much information is interpreted into the analysis. The solution is to get several people to give their opinion on a point. In this way it can be checked whether it is a subjective assessment or whether several team members come to the same conclusion. This should make the analysis more objective.
Personal interests: This point goes hand in hand with the previous one, as one can also be influenced by personal interests. Both sympathy and antipathy can lead to a different assessment of the analysis and should therefore be avoided.
The results of the analysis should not be made public: If this happens, it can have an impact on the project, as stakeholders may try to influence the project in their direction. This can be both negative and positive, because if a competitor learns what is being worked on and in which direction the project is going, this can jeopardise the success of the project. Care should be taken to ensure that the analysis of results is only made available to those involved.
The analysis is a snapshot: projects change frequently, as do the interests of stakeholders. Therefore, the analysis should be carried out at the beginning of the project and reviewed from time to time to see if it is still up to date. This means that the evaluation should be carried out again and again.
Transferability to other projects: Since each project is individual and has different priorities and stakeholders, an analysis should not be transferred directly to another project. Of course, experience and documents can be used, but the classification should always be checked, otherwise the project could face some difficult challenges.