Stakeholder Analysis
Helen Strong
Stakeholder Analysis: Purpose
When considering project management, a marketing plan, or even simply organizing a company function, it is always useful to understand who (which entities) are involved, what their expectations or needs are, and to know which entities consider that they should be included. In this way, one can better manage communication and involvement to minimize conflict and raise satisfaction levels of project participants.
Stakeholder Analysis: Structure and Description
The underlying objective of stakeholder analysis is to be aware of the needs, beliefs, and attitudes of all entities, which affect, or which are affected by carrying out the project. This is to make sure that the process, exchange of information, and outcomes are seen to address the aspirations of the stakeholders.
In the following discussion, we will refer to a project to cover all situations that require a stakeholder analysis. There are many illustrations (models) that can be used to represent different aspects of the stakeholders. Two are provided here.
The first concentrates on the distance between the stakeholder and the project itself. Colors can be used to indicate positive and negative attitudes or influence (Figure 31.1).
The second uses patterns or colors and the size of segments in a pie chart to indicate the power and extent of influence of the various players (Figure 31.2).
The mapping of stakeholders can also include connector lines between them to bring out the relationships and alliances where similar interests exist (Zimmerman and Maennling 2007).
Figure 31.1 Stakeholder representation: onion format
Stakeholder Analysis: Strategic Considerations
The business purpose of conducting this analysis lies in assisting project design, achieving satisfied sponsors and customers, and in optimizing risk management. One is more likely to succeed if stakeholders’ needs are met. They can be influential in smoothening the project pathway and even in obtaining resources. If the project is part of a larger business process, then the ability to meet its objectives and keep stakeholders happy is an important goal for longer term relationships.
In a marketing context, the stakeholder analysis will help determine the correct ingredients for the marketing mix—product design and communication content being tailored to meet the needs and expectations of not only consumers but their surrounding network.
Figure 31.2 Stakeholder mapping
Stakeholder Analysis: Implementation
1. Study the objectives, suggested processes, and resource availabilities of the project.
2. Identify all the people and entities who have an interest (those who affect or are affected by) the project. Your criteria will include whether they have a legitimate or legal right to be involved; whether they control or can assist with provision of resources; where resources include contacts with people of organizations.
Not all projects will have identical stakeholders as this depends on the purpose of the project, and the industry in which it is being conducted. Table 31.1 considers a business environment, not mentioning any classes of consumers.
3. Estimate their involvement or degree of interest in the project. This is a crucial step in understanding the impact that stakeholders can exert on the process. One needs to know their agenda in relation to the outcome.
4. Identify the power that each has to influence the project. What information or expertise do they have that can be used for the benefit or detriment of the project objectives? Who will act in concert to achieve their ends?
5. Construct a power versus interest matrix to position the stakeholders. Part of the assessment will be an evaluation of whether the power that is in the hands of a stakeholder will be used for or against the implementation of the project.
Thompson (n.d.) at Mindtools suggests that the stakeholders are mapped onto a matrix similar to that in Figure 31.3, using different colors to indicate their attitudes, impact, or importance.
Table 31.1 Categories of business related stakeholders
|
Private sector |
Public sector |
Organized society |
|
• Listed companies • Small, medium, and large organizations • Business associations • Professional societies • Business leaders • Financial institutions |
• Central government—ministers and director generals (executive
advisors) • Public servants (bureaucracy) • Members of parliament (elected representatives or legislature) • Judiciary (constitutional, high, and magistrate courts) • Political parties • Local government (municipalities and town councils) • Military • International bodies such as the World Bank and the United Nations • Public healthcare • Public schools |
• Media • Trade unions • National nongovernmental organizations (NGOs) • International NGOs • Pressure groups and advocates • Religious movements • Private institutions for education and health |
Figure 31.3 Stakeholder power: interest matrix
This type of matrix will alert you to how you should allocate your stakeholder attention. It will highlight people who could waste your time, those who could undermine the process, potential advocates, and of course the key players who should be totally involved.
6. Visually represent the stakeholder impact (onion or pie chart or some other representation; see Google images).
Zimmermann and Maennling (2007) suggest that one constructs a stakeholder profile using criteria that are relevant to the success of the project and in assessing the credentials of the stakeholders. In their publication Mainstreaming Participation, they consider criteria related to stakeholders’ management outlook, their operational excellence, and ethical approach in general and in the context of the project at hand.
7. Share the model with the project management team.
8. Identify the stakeholders’ needs or expectations and link them to the expected outcomes of the project. In this part of the exercise, one assesses whether the stakeholders are going to be active or passive entities in the implementation of the project.
Compare projected outcomes against the list of expectations to check whether the significant expectations are going to be met (Table 31.2).
9. Share the analysis with the project management team.
10. Formulate plans to take advantage of positive stakeholders and manage possible negative sentiments and actions.
11. Develop and implement a communication and inclusion plan to maintain engagement and foster support from stakeholders.
12. Ensure this communication includes end-of-project thanks where appropriate, and reports back on outcomes relevant to individual stakeholders.
Table 31.2 Example of checklist matching project objectives against stakeholder interest
|
Project objectives
|
Relevant shareholders
|
|
Objective 1
|
Companies A, B, C, and government department
|
|
Objective 2
|
Suppliers D, E, and customers F and G
|
|
Objective 3
|
And so on
|
Stakeholder Analysis: Conclusions
As project manager, you will find that good communication will be the critical success factor in running the project and in managing the stakeholders. While you will be concerned about the overall outcome project, by giving attention to the stakeholders’ attitudes and influences, you will achieve positive sentiment toward yourself and the project.
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