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A comprehensive guide to stakeholder analysis

Last updated

23 May 2023

Author

Claire Bonneau

Reviewed by

Sophia Emifoniye

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Every project has a list of influencers and decision-makers. Are your team members aware of their preferences, opinions, and the impact they will have on the overall direction of the path forward?

No matter the size of your company, your stakeholders (AKA any person or organization with an interest in your company) play an essential role in deciding the what, when, how, and why of your upcoming projects. And because of this, you’ll want to understand where they all fall within the project scope to ensure you get the best possible results.

Because of their influence and involvement, clearly understanding your project stakeholders is essential for improving communication. To make this process easier to understand and manage, your team can use stakeholder analysis—a helpful project management tool designed to take the guesswork out of communication between everyone involved in your upcoming projects.

In this article, we cover what you need to know about stakeholder analysis—including its purpose and benefits, how to identify your company’s key stakeholders, and how to conduct a stakeholder analysis and create a detailed stakeholder map.

What is stakeholder analysis?

A stakeholder analysis is a process used to identify the key stakeholders of a project before it begins, offering the opportunity to fine-tune communication channels and set expectations for each person’s involvement. Depending on the size of your company and project, the list of stakeholders can include anyone from C-suite executives and external investors to project managers and team leads.

When done correctly, the result of a stakeholder analysis should answer the following questions:

  • Who is involved in their project?

  • What are each person’s unique interests and preferences?

  • Which people have a higher level of influence or impact on project decisions?

  • What is the best way to communicate information to each key stakeholder?

What is the purpose of stakeholder analysis?

As an incredibly helpful project management tool, stakeholder analysis offers your team multiple benefits, including:

Setting clear expectations of your team

By creating a clear picture of each person’s role, responsibilities, and expertise for your project, stakeholder analysis helps to ensure that everyone who touches your project understands how to best provide their insights.

Unifying your stakeholders to one common goal

The saying, “there are too many cooks in the kitchen,” definitely rings true for project managers. To better manage everyone’s values and opinions, stakeholder analysis can be a helpful tool. By creating a clear communication pathway, your team can reduce communication overlap and clutter, which in turn encourages increased project unification and efficiency. 

Mitigating potential conflicts before they occur

Everyone involved in your project should be aligned on its value. Unfortunately, this is often harder to achieve than you would expect. By conducting a stakeholder analysis early into the project, you can identify possible trouble spots or difficult stakeholders early, giving your team a leg-up for mitigating potential conflicts or points of tension before they can bubble up.

Reducing communication overload

Communication is key to success, but over-communicating can lead to project burnout, irritation, and confusion. By creating a comprehensive stakeholder map as part of your stakeholder analysis, your team can ensure that communication channels are clearly defined, eliminating oversharing and overburdening stakeholders with aspects of the project that they are not involved in.

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How to identify your key stakeholders

Before we jump into the steps of completing a stakeholder analysis, we first need to understand the different types of stakeholders that can be involved in any given project:

Internal stakeholders

Internal stakeholders are people within your company or organization who are involved or invested in the outcome of your upcoming project. In most cases, they have a direct impact on decisions and operations within the project and often have a larger influence over the direction your team takes to complete needed tasks. Examples of internal stakeholders to consider for your stakeholder analysis include:

  • Immediate team members

  • Project managers

  • Website and product designers

  • C-suite executives

  • Board of directors

  • Project investors

External stakeholders

External stakeholders are people involved and working with your company to complete a project, but they’re not within your organization. People in this category are often influenced by the decisions your team and company make, which then, in turn, impacts their work and involvement. 

Examples of external stakeholders to consider when conducting a stakeholder analysis include:

  • Suppliers

  • Government bodies

  • Union representatives 

  • Customers and clients

  • Externally hired agencies

  • Competitor brands

When to conduct a stakeholder analysis

As a management tool designed to provide helpful communication and organizational insights, conducting stakeholder analysis during the early stages of a new project is often the most beneficial option. 

While we know it can be tempting to jump straight into a new and exciting project as soon as possible, choosing to conduct a thorough stakeholder analysis first is one of the best ways to reduce wasted resources and keep your project moving smoothly.

Examples of situations where conducting a stakeholder analysis will be beneficial for your team include:

Before launching a new product or service

As the bread and butter for many companies, offering high-quality products and services that your customers actually want is essential for long-term success and business growth. 

Because of this, many different stakeholders, from C-suite executives to your contractors and suppliers, will need to be kept in the loop (and will likely want to provide their thoughts and opinions) throughout the entire design and launch process.

Throughout day-to-day operations

On a smaller scale, knowing your stakeholders is incredibly helpful for organizing and completing internal projects. 

Offering valuable insights into the best paths of communication between team members, you can use the results of a comprehensive project stakeholder analysis to improve the way your team communicates, cutting back on unnecessary meetings and emails that can burden your team’s day-to-day routines.

Before entering a new market or niche

If your company wants to expand its offerings to a larger market, it’s no surprise that many key stakeholders will want to help ensure this move is successful and profitable. 

As a great opportunity to include customer research and opinion into your plan, conducting a stakeholder analysis during the early stages of this transition will help to reduce tension and stress.

How to complete a stakeholder analysis

Now that we’ve determined the importance and benefits of integrating stakeholder analysis into your project management systems, here’s an easy-to-follow guide to get you started:

Identify project stakeholders

Working alone or with your team, the first step of effective stakeholder analysis is creating an exhaustive list of all possible stakeholders that could be involved in your upcoming project. The goal of this exercise is to be incredibly thorough—don’t try to categorize or evaluate your contributions. 

Later into this process, you’ll spend time evaluating this list (and will likely end up removing people from the list). But, as a great introductory step, this list will be your reference point as the project progresses.

If you’re stuck, here are a few examples of commonly forgotten stakeholders to consider adding to your list:

  • The sales team (including contracted SDRs)

  • Human resources and company culture experts

  • Finance and accounting

  • Front and back-end engineering

  • Supply, demand, and procurement leads

  • External consultants

  • Information technology (IT) specialists

Determine stakeholder impact level and priority

Next, it’s time to prioritize your list of stakeholders based on their level of impact and influence on the project.

Looking at each stakeholder’s role, opinions, and level of responsibility to the project, you can create a prioritization list. To organize your stakeholders helpfully and clearly, we recommend using a four-quadrant grid stakeholder map based on the following situations:

High power, high involvement (top priority)

Stakeholders who fall within this quadrant are the people you’ll likely work with most closely throughout the project. 

As the people with a high level of power and responsibility, these stakeholders will need to be involved throughout the entire project as they make decisions and provide their expertise. Examples of top-priority stakeholders include your immediate team members and project managers.

High power, low involvement

Stakeholders in this category have a high level of influence over the company and its projects but aren’t likely to participate in project-specific meetings and work sessions. 

In most cases, this group refers to C-suite executives and top-level management—as they’re often involved in top-level decisions for the company but are often too busy to be involved in the day-to-day operations of your project. Examples of high power, low involvement stakeholders include C-suite executives, board of directors, and project investors.

Low power, high involvement

Stakeholders in this group can be people like your direct team members and other colleagues across the business. 

As participants who will likely be expected to stay involved in the project and assist throughout the process, people in this group are likely not involved in big decision-making or project strategy meetings. Examples of low power, high involvement stakeholders include project designers, creative leads, and sales team members.

Low power, low involvement (low priority)

Stakeholders who have a low level of power and a low level of involvement with your project are not going to be your priority. While people in this group can still offer advice and help as needed, in most cases, these stakeholders just need to be notified as the project progresses to keep them in the loop. Examples of low priority stakeholders include external consultants, freelance contractors, and external agencies.

Using these buckets as a guide, you’ll have a clearer understanding of the level of involvement of each stakeholder throughout your project. Armed with this knowledge, your team may opt to remove some of the identified stakeholders from your list based on their level of involvement and influence. 

Assess assumptions and risks

With your newly organized and prioritized list of stakeholders, your team now has the opportunity to future-proof your project from conflict and derailment.

No matter the size of your project, your different stakeholders will each bring their unique opinions, values, and concerns forward. Knowing this, taking the time to consider possible pain points for your team before you get started is a great way to reduce frustration and enhance efficiency as you work.

Examples of risks and assumptions to consider during this stage include:

  • Which stakeholders are most likely to push back against project progression? Why?

  • Do we have any stakeholders who may unintentionally delay progress? What can we do to account for these delays?

  • Has your team made any assumptions about your stakeholder’s opinions or values? Can these be corrected before you start?

Define stakeholder participation and create clear communication channels

Finally, the last step of your stakeholder analysis is to use the information you’ve gathered to organize project communication moving forward.

Using your stakeholder map, your team will be able to identify key stakeholders who are likely to be involved in large project decision-making processes, and those who will play a more supportive and less-involved role. Using your map, your team should be able to:

  • Ensure that each stakeholder knows their role and level of responsibility in your upcoming project

  • Set clear communication expectations for each group or stakeholder

  • Create a stakeholder contact list, which will be used by your team throughout the duration of the project

Moving forward, your job is to instruct your team to use the stakeholder map as the holy grail for all project communication. When used correctly, your team will know exactly who to contact or meet with to answer their questions, reducing unnecessarily large meetings and increasing the efficiency and effectiveness of project communication.

Start your next project off right with stakeholder analysis

Stakeholder analysis is an essential early step to project success.

No matter how tempting it may be to brush past it to start your project sooner, taking the time to conduct a thorough stakeholder analysis of your team and business ensures that you start the project on the right foot.

Your stakeholder analysis will change the way you schedule meetings and make large project decisions. It will even impact how your team implements changes as the project progresses and grows.

To give your company the best possible results, organize and process the results of your stakeholder analysis with an insight software like Dovetail. Designed to show patterns and trends, Dovetail can be integrated into your stakeholder analysis to make the categorization and organization of each team member easier to understand and manage.

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