stakeholder analysis

Project management is about managing stakeholder requirements, and stakeholder analysis is a key to this process.

You must identify your project stakeholders and analyze them to develop your strategy to engage them so you can complete the project with the least hassle.

Today’s blog post will discuss in detail about analyzing project stakeholders.

Stakeholder Analysis

Definition: A stakeholder analysis collects stakeholders’ information and groups them based on their attributes, such as power, interest, influence, and level of participation in the project, to help develop a stakeholder engagement plan.

You cannot offer the same attention to all stakeholders. The stakeholders’ requirement depends on the stakeholder and their interest in the project. The stakeholder analysis process helps you group the stakeholders based on their requirements so you can fulfill them throughout the project life cycle and earn their support.

Why is Stakeholder Analysis Required?

Stakeholder analysis is required for the following reasons:

To Collect Project Requirements

The existence of the project is to satisfy stakeholder requirements. This process helps you analyze stakeholders and thus collect the stakeholders’ requirements. This helps develop the scope of work and other project management plans.

To Develop Stakeholder Engagement

After analyzing stakeholders, the next step is developing a stakeholder engagement plan. This plan helps you manage your stakeholders and get their buy-in. Stakeholder support is required to complete the project successfully.

Helps Builds Relation

Classifying your stakeholders early and managing them helps build a good relationship. This relationship helps provide support when needed.

The Importance of Stakeholders Analysis

  • Separating Unimportant Stakeholders: A large project can have hundreds or thousands of stakeholders; managing them is no easy task. A stakeholder analysis lets you know who key stakeholders are; Investing resources on low power and low-interest stakeholder is a waste.
  • Group the Stakeholder: Stakeholder analysis helps group stakeholders based on different attributes. The attributes can be high-power, low-power, high-interest, low-interest, etc.

How to Conduct Stakeholders Analysis

A stakeholders analysis requires the following steps:

  1. Identify Stakeholders.
  2. Categorize stakeholders.
  3. Priorities Stakeholders.

#1. Identify Stakeholders

You must identify your stakeholders for analysis. The following are key techniques to identify project stakeholders:

  • Business Case: This document contains the justification for the project.
  • Benefits Management Plan: Every project has benefits to deliver. This document shows the project deliverable can satisfy the beneficiary after the project closes.
  • Agreement: This is a contract between the performing organization and third parties such as suppliers, contractors, or partners.
  • Expert Judgment: Subject matter experts provide expert judgment.
  • Brainstorming: This activity helps generate ideas. All team members are invited to do this and identify stakeholders.
  • Brainwriting: This is similar to brainstorming, but team members are told before the meeting to come up with ideas to be reviewed during the meeting.
  • Survey: Here, you retrieve data or information from non-project team members, especially the larger population. This is common in community projects.

The output to identify the stakeholder process is called the stakeholder register.

Every project has visible and sleeping stakeholders.

Visible stakeholders, such as customers and suppliers, are those whose influence is easily noticed. 

Sleeping stakeholders are quiet and pose the greatest risk because they are often not proactively managed. Examples are the procurement departments and regulators.

Some stakeholders can be risky as they can negatively influence the project outcome. These stakeholders are not always a threat. Sometimes, they provide an opportunity for project success.

#2. Categorize Stakeholders

The following two methods are the most popular models to categorize stakeholders:

  • Power/Interest Grid
  • Salience Model

We will discuss these two models in the stakeholder analysis model section.

#3. Prioritize Stakeholders

After grouping the stakeholders, you will prioritize stakeholders based on their requirements and the influence they hold on to the project or its objective.

High power and influential stakeholders will be at the top, while low power, low influence, and low-interest stakeholders will be at the bottom. They are placed on a watch list for future monitoring.

Example of a Stakeholder Analysis

The following image shows an example of stakeholder analysis:

Example of a Stakeholder Analysis
Stakeholder Analysis Example

Stakeholder Analysis Models

Various models are available to analyze project stakeholders. The following two are the most popular models for analyzing stakeholders.

  1. Salience Model
  2. Power/Interest Grid

Salience Model

A salience model is a Venn diagram consisting of circles representing three attributes: power, legitimacy, and urgency. The intersection shows stakeholders with multiple attributes.

salience model to analyse project stakeholder

The stakeholders are classified into seven groups according to these attributes:

  1. Discretionary
  2. Dormant
  3. Dominant
  4. Dangerous
  5. Core
  6. Demanding 
  7. Dependent

You can divide these groups into three categories: 

  1. Latent stakeholders
  2. Expectant stakeholders
  3. Definitive stakeholders
#1. Latent Stakeholders

These stakeholders have only one attribute. Since they only have power, these stakeholders get little attention.

Dormant, demanding, and discretionary are examples of latent stakeholders. 

Dormant Stakeholders: Dormant stakeholders have high power, low urgency, and low legitimacy. Due to their high power, they can influence your project. Therefore, you will manage these stakeholders closely.

For example, top management does not take part in meetings and has no interest. However, you will still watch them as they can influence your project.

Discretionary Stakeholders: This group has high legitimacy, low urgency, and low power. Despite having lower power and urgency, you will manage them closely because of their legitimacy.

Examples of these stakeholders are NGOs and charitable organizations.

Demanding Stakeholders: These individuals have high urgency, low power, and low legitimacy. They are usually vocal, so you will need to manage them carefully.

For example, if your project is in a public place, the local community has an interest. 

#2. Expectant Stakeholders

This group has two attributes: they have high expectations and are actively involved with the project. 

Dominant, dangerous, and dependent are examples of expectant stakeholders.

Dominant Stakeholders: These have high legitimacy and high power but low urgency.  You will manage them closely. 

For example, local government agencies.

Dangerous Stakeholders: This group has high power, high urgency, and low legitimacy. Sometimes, they can be violent, so you will manage them cautiously. 

For example, a group of local terrorists in a third-world country.

Dependent Stakeholders: These people have high urgency, high legitimacy, and low power. Due to their lack of power, you will not manage them closely. 

For example, in construction work, residents can be an example of dependent stakeholders.

#3. Definitive Stakeholders

This last set has three attributes and requires the most attention from the project manager. 

Core Stakeholders: Sometimes, these stakeholders are known as “definitive.” 

They have high power, high urgency, and high legitimacy. You will manage them closely. 

For example, the top management of your organization. 

Non-Stakeholders: You will not manage these people.

Power Interest Grid

power interest grid to analyze project stakeholder

This is the most popular method of grouping stakeholders.

Here, you categorize stakeholders based on their power and interest in the project or its objective. 

You can divide stakeholders into four groups

  1. High-power – high-interest
  2. High-power – low-interest
  3. Low-power – high-interest
  4. Low-power – low-interest

When Should You Conduct a Stakeholder Analysis?

Stakeholder analysis is an ongoing process. However, for the first time, you will conduct it as soon as you complete the stakeholder identification process. Afterward, you will conduct this process whenever you identify a new stakeholder or see the position of a stakeholder change. For example, a highly powerful stakeholder is no longer powerful.

After completing the stakeholder analysis, update the risk register.

Summary

The stakeholder analysis begins with the identification. Stakeholders’ analysis helps you identify key individuals and groups so you can manage them and get their buy-in.

Your project cannot succeed until your stakeholders are happy, and stakeholder analysis can help you achieve that objective.

Fahad Usmani, PMP

I am Mohammad Fahad Usmani, B.E. PMP, PMI-RMP. I have been blogging on project management topics since 2011. To date, thousands of professionals have passed the PMP exam using my resources.